EMPLOYEE BENEFITS
Flex is an idea "whose time has now come"
Flexible benefits have taken off much more slowly than some experts had predicted. But all the signs are that, one or two years' hence, a much higher proportion of employers will be using flex, according to a survey by Hay Management Consultants.
Only 6% of Hay’s sample of 113 industrial and service employers currently operate formal flexible benefits schemes. But Hay is confident that the long-awaited pickup in the use of flex is set to gather pace: "Our latest research and our discussions with clients suggest that flex may be an idea whose time has now come".
Pushed by advances in IT and some high-profile success stories, employers are now convinced that flex need not be an administrative headache, says Hay.
Cultural shifts
What's more, Hay points to some far-reaching cultural shifts which are giving flex added momentum:
an intensifying war for talent
a style of management which emphasises staff taking much more personal responsibility
a growth in consumer society, where individuals have become accustomed to a high level of personal choice
the increasing importance of generation X in the labour market "bringing into question the values underlying traditional benefits" such as security, and long service.
A third of employers operate a standard package of benefits with no choice
Reports of the death of the fixed benefit package, however, appear exaggerated: 32% of 174 organisations surveyed by Hay provide employees with a fixed benefit package offering no choice in the levels of benefit and no options to obtain additional benefits.
Two-thirds report "flex lite" schemes — flexibility for a limited number of benefits
As many as 68% of the Hay sample offered employees some choice over which benefits they receive. But among this group, nine in 10 reported that they only offered "limited opportunities to increase/reduce specific items of package".
Company cars, private healthcare and, to some extent, pensions are the main parts of the package where employees are offered choices in relation to the level of provision, according to Hay.
A growing number of companies are now providing personalised benefits statements
One emerging communication tool used by employers to publicise their benefits more effectively is the benefit statement, which provides staff with a single personalised document that outlines the value of the benefits they receive. Hay's latest survey reveals that 14% of organisations now issue annual benefits statements, up from the 12% recorded last year.
Managing benefit provision
| Communicating benefit provision | |
| No benefits statement | 14% |
| Pension scheme only | 59% |
| Annual benefit statement — all benefits | 14% |
| Annual benefit statement — some benefits | 7% |
| Flexible benefits | |
| No choice or option | 32% |
| Cars | 61% |
| Private healthcare | 36% |
| Pension | 21% |
| Holidays | 9% |
| Life assurance | 3% |
| Flexibility available | |
| Limited opportunities to increase/reduce specific items of package | 89% |
| Formal flexible benefits scheme | 6% |
| At management discretion | 4% |
| Different terms available by negotiation on recruitment | 3% |
Source: Hay Management Consultants.
Want to know more?
| Title: | Hay survey of employee benefits 2000 |
| Purpose of the survey: | "Provides a reference manual of benefits practice for use by management in monitoring and developing policies." |
| Survey sample: | 179 participants in a "representative sample both by size and location". 137 participants in the industrial and service sector, 42 in finance. List of participants included. |
| Methodology: | Survey questionnaire sent to employers. |
| Date undertaken: | January 2000, published October 2000. |
| Frequency: | Annual. |
| Format: | 26th annual survey, published in two volumes: one covers industrial and service firms; the other financial sector organisations. Introductory overview summarises main benefit trends and issues. Tabular format with data analysed by main categories of employee — management, higher management, staff and manual. Some variations in benefits examined by job size (using Hay job units) or equivalent salary level. |
| What information is collected? | |
| Huge array of benefits — more than 80 in total — collected for all job levels. Main body of report is divided into 12 sections, includes: | |
| Management of benefits practice, communication and flexible benefits. |
| Entitlement, car model policy, alternatives to company car and use of private car on company business. |
| Defined contribution and defined benefit schemes. |
| Annual entitlement, sabbaticals, maternity and paternity leave, and bereavement. |
| General loans, season tickets, cars and mortgage subsidies. |
| Catering facilities, luncheon vouchers and cash meal allowances. |
| Private health care, dental, optical and health screening. |
| Sickness benefit and permanent health insurance. |
| Executive-type plans, profit sharing and savings-related share option. |
| Gifts and awards, advice and counselling, staff discounts, sports and social facilities, insurance cover and business travel. |
| Removal expenses, house hunting expenses, disturbance allowance and bridging loans. |
| Notice periods, redundancy, hours of work, flexible working |
| How long is the report? | Industrial and service organisations report — 208 pages; financial organisations report — 194 pages. |
| Price: | £950 each report (both reports together £1,400). Participants only. |
| Availability: | Annika Westerberg, project manager Hay Management Consultants 52 Grosvenor Gardens London SW1W 0AU. Tel: 020 7881 7074 |
| Web site: | |