Voluntary benefits get quirky

If you read nothing else, read this . . .

• Voluntary benefits schemes are often the ideal home for quirky, unusual perks.

• These can be aligned with employers’ corporate social responsibility profile or family-friendly policies.

• Voluntary benefits are a good place to offer benefits that can help with the general expenses employees encounter every month.

Case study: TNT perks drive green agenda

During TNT’s voluntary benefits launch this year, the transportation and distribution firm put the focus on environmentally friendly offerings.

The scheme supports its corporate aim to reduce carbon emissions by highlighting green products and services, such as environmentally friendly gadgets and alternative energy providers.

David Taylor, reward manager at TNT, says: “We have branded our programme Planet Me. It is all about how, individually, we can make a contribution to our corporate stance on environmental protection.”

The firm’s online scheme has a category called Green and Ethical, which includes alternative energy providers such as Ecotricity and Green Energy UK, environmentally friendly holiday breaks, green car insurance, and fair trade and organic products.

Taylor adds: “Employees who register with Ecotricity also get an energy monitor worth £40 to track energy use at home. If employees join Green Energy UK, there is an energy-efficient kettle as part of the enhancement.

Case study: Fun perks make headlines at ITN

When ITN made some practical additions to its voluntary benefits scheme in 2010, it took the opportunity to add in some fun perks.

On top of new benefits such as dental insurance, health cash plans, gym membership and travel insurance, the broadcaster added a Merlin pass for discounted theme park entry, a dining-out card and a wine club.

ITN introduced the fun perks alongside more practical benefits to cater for its diverse range of employee age groups. Marvoreen Young, compensation and benefits adviser at ITN, says: “A lot of employees think about voluntary benefits as being quite boring. We have got younger staff working in ITN production who may not be interested in insurance. They are more interested in going out and socialising with friends. We wanted to aim the dining-out card at those individuals.”

Environmental perks feature strongly among the quirkier options in voluntary benefits, says Jennifer Paterson

A voluntary benefits scheme gives employers the chance to add something extra to their employment proposition.

These plans are often home to such benefits as carbon offsetting schemes, wine clubs and identity theft protection quirky, unusual benefits that will appeal to specific groups of employees.

Voluntary benefits plans are also a good place for employers to offer perks that demonstrate or support wider corporate objectives, such as corporate social responsibility (CSR) or environmental initiatives or family-friendly benefits, or to add benefits that make their package a bit more interesting.

John Evans, chief executive at Incahoot, says: “Some organisations will offer these benefits just to say they offer them, while others will do it to make the workplace a bit different.”

Where the selection of perks in a voluntary benefits scheme is aligned with an organisation’s CSR profile, these can include sustainable initiatives and family-friendly policies. Mark Eaton, director at Personal Group, says: “One thing that is being offered a lot is the green and ethical bit: discounts on eco-friendly products, and family-friendly gifts for mothers and babies.”

One such benefit is a carbon offsetting scheme that enables staff to calculate the amount of carbon they produce, be it through car journeys, flights or their energy usage at home, and then buy units of carbon that are used to offset their carbon footprint. This can be done, for example, by donating to a tree-planting charity through payroll deduction.

Duncan Smith, senior director of business development at Next Jump, says: “We have partnered with a lot of green and charitable causes and have worked them into the platform. Employers may not have changed anything in their core green policy but, because they have a green channel and green providers, employees’ perception of how green they are as an employer goes up.”

Retail or leisure discounts popular

According to the Employee Benefits/ Alexander Forbes benefits research 2011, published in May, among the most popular voluntary benefits are retail or leisure discounts and vouchers, offered by 33% and 23% of respondents, respectively. Although these perks are by no means new to the market, the ways in which they are provided to staff and the range of offers included have evolved, bringing them more up to date. Andrew Johnson, director general of the UK Gift Voucher Association (UKGVA), says: “A number of providers are offering e-vouchers and SMS vouchers. While the retailers are the same, the ways in which the message and product can be delivered are different.”

Experiences available through voluntary schemes are also moving into unusual areas. For instance, staff can opt to go zorbing getting into a big plastic ball and being pushed down a hill or placed on water or they can choose behind-the-scenes tours of stately homes, or tour the 2012 Olympics site.

A development in employee discounts has seen employers offering access to groupbuying programmes, such as Groupon and Living Social. For example, voluntary benefits provider Next Jump’s partnership with Living Social enables employers to offer staff savings of up to 50% on products such as cinema tickets or family trips to the zoo, with the offers changing each week. “A year ago it would have been highly unusual, but it is now becoming mainstream for employees to participate in these group-buying programmes,” says Next Jump’s Smith.

Employers can also offer staff exclusive deals on day-to-day and household bills, including broadband, mobile phones, home insurance and energy costs. Market research conducted by Incahoot this year found that 64% of employees want discounts on household bills included in their benefits schemes.

“Costs, energy prices, petrol, oil and taxes have all gone up, and food bills are doubling,” says Incahoot’s Evans. “Employers cannot afford to give big pay rises, and everyone is feeling the pinch. If an organisation can offer significant savings on big-ticket household bills and items, it would be a good thing.

Save money in difficult times

“These are benefits that every voluntary scheme should have because they are meaningful and real, not just helping employees with the odd bit of travel or gym membership. They genuinely help employees save money in difficult times.”

Alastair Denton, managing director at Edenred, adds: “Voluntary benefits are about giving staff access to deals that allow their spending to go further. Looking at what people spend their disposable income on, a voluntary benefits scheme has to deliver in all those areas.”

Other perks that employers are adding to voluntary benefits schemes include access to financial products and services such as individual savings accounts (Isas), driving lessons, mobile phones, car care schemes and cinema tickets.

David Pearson, director at Filmology, says: “Employees can access cinema tickets free of charge if the employer is paying for it, or they can access anything up to 40% off the face value through their benefits schemes.”

Meanwhile, Busy Bees Benefits’ car care scheme enables staff to make a one-off annual payment to cover all car-related concerns, such as tyre service, MOT and breakdown cover. Jo Dalby, finance director at Busy Bees, says: “It is newly launched and is popular because it saves a lot of money.”

Appeal to the whole family

Perks such as cinema tickets and discounts on leisure and retail are intended to give staff something to share with their families. Pearson says: “Benefits tend to be focused on the individual, but the cinema is a couple’s or family activity. As an employer, it is nice to be able to offer something that appeals to the whole family of a particular employee.”

In this age of austerity, being able to offer staff something meaningful should be at the top of an employer’s benefits agenda. Dalby says: “At the moment, employers are not able to give pay increases, so this is a way to give staff value, but not in the traditional manner. Something like a car care scheme can save employees substantial amounts of money. Retail discounts at Asda or Sainsbury’s are normal running costs. Employees do not have to spend money to save it.”

Voluntary benefits schemes are therefore well placed to include perks that cover the general expenses employees encounter every month, such as shopping, travel, household bills and financial products. Edenred’s Denton adds: “Organisations are recognising that the way to get employees engaged in benefits is by offering them access to discounted or cash-back products they would spend their disposable income on.”

Most popular voluntary benefits

The most popular voluntary benefits offered by employers are:

  • Retail or leisure discounts
  • Gym membership
  • Retail or leisure vouchers
  • Health/hospital cash plans
  • Health/hospital cash plans for partners and dependants
  • Dental insurance
  • Childcare vouchers
  • Private medical insurance for partners and dependants
  • Give-as-you-earn or payroll giving

Source: Employee Benefits/Alexander Forbes benefits research 2011

Unusual voluntary benefits

  • Carbon offsetting
  • Student grants or repayment of student loans
  • Mobile phones
  • Identity theft protection
  • Computers
  • Will writing
  • Car care schemes
  • Concert, event and cinema tickets
  • Group-buying programmes
  • Discounts on household bills
  • Wine clubs

Read more on voluntary benefits schemes