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More than nine out of 10 companies that have introduced flexible benefits say it has helped save money by avoiding giving staff benefits they don't want or need, according to research from benefits consultants Hewitt. But only one out of ten companies has a scheme.
"Some companies are put off by the cost, but this depends how much your company wants to do. You can spend as much or as little as you like on the scheme," says Gillian Edwards, consultant at employee benefits experts Mercer Human Resource Consulting.
"Costs depend on how many benefits you offer, whether you want to run and promote it online, or issue glossy brochures. It also depends whether you do it in-house or farm out to a consultancy. Outsourcing is easier, but costs more. It is more cost-effective for companies to use in-house resources once the scheme is running."
Flexible benefits scheme involve a bubble of activity once a year, typically around the financial year end.
"Administering the scheme in house, you need the flexibility to allocate more resources at this critical time. This is easier for companies with large human resource departments than smaller businesses," says Edwards.
Explaining the flexible benefits is also time consuming if you want to ensure take up. Most companies found less than half of employees actually changed their package after flexible benefits were introduced, according to a survey from Employee Benefits magazine.
Introducing a scheme may also involve changes to staff contracts. "You are giving staff the opportunity to sacrifice salary in return for benefits such as holiday, pension, insurance and so on, which probably means rewriting their contracts. This is not a major operation, but you need to ensure it is legally watertight," says Edwards.
Benefits consultants Partridge Muir & Warren introduced a flexible scheme for its 35 staff in January, offering a choice of pension, holiday, medical and dental cover. Senior manager Julia Turney says flexible benefits schemes are still rare among small companies, which gives those that do get involved a clear competitive edge. Consult with staff before introducing a scheme to make sure your choice of benefits meets the profile of your employees.
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