The number of firms offering flexible benefits schemes – where staff can choose from a menu of benefits from gym membership to extra holiday – has doubled over the past four years.
A study by the Industrial Society found that more than a quarter of employers (27%) are now offering flexible benefits in an attempt to retain staff. The most frequently offered flexible benefits were company cars, additional holiday and healthcare. Other inducements included share plans or options, childcare vouchers and discounted or free life assurance. ‘
Christine Garner, the Industrial Society’s head of organisational development, said the uptake of flexible benefits was increasing rapidly.
She urged more firms to consider introducing them but said the response from staff could be cautious, even cynical, at first.
To break down the ‘apathy barrier’, Garner said that communication at the start of any flexible benefits scheme needed to be very clear to show staff exactly what it could mean. She said: ‘We recommend a sustained, targeted campaign that uses a mixture of methods such as staff meetings, posters, e-mail and intranet sites. We also recommend that organisations monitor the numbers taking up each benefit.’ More than half the companies that responded to the survey operate a flexible benefits scheme. In most of the companies (77%), all staff are eligible for the scheme. About one in five (19%), however, said that only middle managers were covered, while 5% said flexible benefits applied only to the top 10%.
Asked whether there were any drawbacks associated with the schemes, more than half the companies (55%) said administration was costly, and 38% said employees would rather have their basic pay increased.
But Garner said that by introducing a scheme an organisation shows it is thinking about the needs of its employees. This helps it to recruit and retain the best staff in a tight labour market.
She said such companies allow employees to choose benefits suitable for their needs. ‘Parents may want to take extra holidays to be with their children. Older people may want extra medical benefits or life assurance and younger staff may want extra money rather than extra holiday. For employers they are a way of increasing employees’ satisfaction and also of attracting the best recruits.’
Helen Rowe writes for Personnel Today magazine