John Puddephatt: Winning plans for flex

A core set of four to 10 benefits are present in most UK [employers’] flexible benefits plans. There is a long list of other common benefits.

Most employers with successful mature plans that have been in place for five or more years add one to two benefits a year and, at some point, reach a steady state with between 18 and 20 benefits. Some plans have more than 25.

There are two potential issues here: do staff bother to view 25 benefits every year, and do plans become stale after a certain time? Our employer clients with more than 10 years of flex deployment feel these are real concerns. But they can be overcome.

The methods used to avoid staff becoming disengaged and plans becoming stale have been borrowed from business-to-consumer marketing thinking. They include:

• Employee segmentation. Some employers configure flex communications differently for different demographic groups. For example, deals on smart phones, discount dining cards and holiday trading are targeted at the under-30s, while savings, insurance and medical plans are aimed at older groups of employees.

• Part-year offers. Some employers use half-year enrolment opportunities for discounted and high-value offers, and communicate these with high-impact sales methods. This is different from the annual enrolment process, which may be more comprehensive and conservative.

• People like ‘me’ techniques, commonly used in online shopping. Deployed on flex sites, they let staff rate benefits and scheme content and see what people with similar profiles have chosen.

So, the most successful flex plans incorporate 15 or more benefits and deploy targeted communications. More benefits, properly targeted, can mean greater impact.

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John Puddephatt is a principal at Aon Hewitt

Read more from the flexible benefits supplement