Relaunching existing tax-efficient benefits schemes to staff is not only cheaper than bringing in new benefits, it is much less hassle, says Nick Golding
Case study: Nestle
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Although, on the face of it, you are giving people something they already have, with careful marketing and effective repackaging, take-up rates can receive a great boost second time around.
One of the main issues with such schemes at the initial launch is that they tend to be viewed sceptically by many employees. So it is important that employers get their staff on side at a relaunch in order to lift take up.
Pat Higgins, managing director at mobile phone provider Sourcecom, explains: “Initially, there is scepticism, a sort of ‘hold on, there must be a catch here’, type of situation. [But], it really only takes one employee to say to another over the coffee machine, ‘I have taken childcare vouchers and I’m saving money’ [to help win over staff].”
This barrier of employee scepticism and confusion can be frustrating and difficult to break down for employers keen to see their benefits being utilised.
Neil Millan, head of employee relations and reward at Nestle UK, says: “It is difficult to believe a something-for-nothing deal sometimes. One of our ideas was a salary sacrifice [arrangement] on canteen food. It’s a win-win situation but people need to [understand] it.”
So at any relaunch, it is vital that employers capitalise on the success that the scheme has had in previous years. Whether they have recorded a take-up rate of 5% on a cycle-to-work scheme or 40% on childcare vouchers, employers need to recruit employees who are currently taking part to help boost take up second time around.
If employers can encourage those staff who have previously enjoyed using tax-efficient benefits to offer themselves as a case study to other members of staff, this could be the key to boosting take up second time around.
Michelle Cracknell, business development director at Origen, says: “If it is possible to get [staff] to give a synopsis of how they have used the product in the past 12 months, it will work as a great communicator to the rest.”
What is more, organisations must be able to assess where mistakes have been made at the initial launch, and seek to rectify these errors before relaunching the scheme.
This could initially involve looking at the workforce demographic and identifying which groups of employees have taken up the salary sacrifice benefits and which have not.
For companies with a diverse and geographically-spread workforce, the results may uncover that office-based staff, for example, are more prone to taking on benefits than groups such as factory staff, an issue which can be addressed, says Cracknell, by clever use of communal spaces for marketing purposes. “Factories have certain attributes that offices may not, such as a staff room where posters can be an effective communicator.”
If the opposite is true, however, and office-based staff are reluctant to take up tax-efficient perks, employers need not be afraid to utilise the latest forms of technology to communicate a re-launch, for, in general, these staff have computer access.
As well as online calculators, which enable employees to work out what they can save, online chat rooms are beginning to become more popular among employers, along with podcasts. These allow staff to download the latest benefits news which has been uploaded by their employer on to the intranet and to take the information away on an iPod.
Other organisations have gone a step further and covered their backs by surveying staff and asking them how they would like to receive information about benefits. This means communications can be targeted at specific employee groups, as Nestle; already does. “We have asked people what they like when it comes to communication. Some like email, while others prefer newsletters [so] we tend to mix and match,” explains Millan.
Some organisations, however, fall into the trap of believing that once a tax-efficient benefit has been explained to staff at the initial launch there is no need to educate them again a year later if the perk is relaunched. “The problem here is that these schemes are not simple, for instance, it is not straightforward to work out how much money an individual saves by using childcare vouchers. So employers need to explain it again second time round too,” says Cracknell.
Employers also need to remain clued-up on the benefit they are planning to relaunch. In some instances, products such as mobile phones change and develop over the course of a year so it is almost like providing a new product 12 months down the line.
“Some benefits are not particularly sexy, but mobiles are. They make huge advances and, in some cases, employers need to make it clear to staff that after a year the product has greatly developed,” says Higgins.
One way employers can get this message across is to organise a visit from the scheme’s provider to the workplace to explain the product to employees. Paul Bullett, B2B development manager at retailer Halfords, explains: “We love getting involved in roadshows. It is the best way to get employees engaged in cycling and to get them talking about the product.”
The evolution of perks does not stop at bikes and phones either, because the government tends to change its mind on which benefits should be available and how much staff can actually save when taking them up.
In the case of childcare vouchers, the government increased the amount individuals can save this year. Employers relaunching their scheme will need to let staff know this, because it could be the difference between making it worthwhile for them or not.
Case study - Nestle
Nestle offers tax-efficient benefits such as a cycle-to-work scheme and car parking.
Neil Millan, head of employee relations and reward, believes that using case studies to demonstrate how a scheme operates can boost employee take up at a relaunch.
“[During presentations], we have recently [used] real-life examples of employees who have participated in our tax-efficient benefits in the past. It can be a highly effective method of getting more staff involved.” He adds that there also needs to be an effective education campaign around how schemes work when benefits are relaunched, if employers want take up to be high.
“There are always people that don’t know what is available. You need to communicate the benefits to all employees in different ways, whether it be in words or pictures or figures,” explains Millan.