FLEXIBLE BENEFITS
Half of CEOs take an active role in flexible benefits
Chief executives and finance directors are increasingly taking an active interest in flexible benefit schemes as they realise the positive impact that they can have on the financial performance of their businesses. That is the main conclusion to emerge from a survey by HR services firm Hewitt Bacon & Woodrow.
The survey, now in its 11th year looks at the key questions about flexible benefits plan design, communication and administration. With responses from 190 organisations, the survey findings indicate that the number of companies interested in implementing flexible benefits continues to rise. Over half of the survey participants have either already implemented a flexible benefits plan or are considering doing so in the next few years.
High-level engagement
Over 50% of respondents claimed that their CEOs are involved in the decisions relating to the introduction and management of flexible benefits. Nearly half of the respondents reported close involvement of the finance director -- a significant increase on last year's figure of less than 20%.
Phil Murray, who leads Hewitt's UK flex design team, said: "These results point to a greater high-level engagement in the benefits process as company leaders understand the importance of the flexible benefits design to their businesses."
Business case for flex
Hewitt's survey also revealed that the top three reasons used for constructing a business case for flexible benefits implementation were all cost driven:
Phil Murray said: "Over 52% of respondents with full flexible benefits schemes attributed an improvement in employee commitment as a result of flex and 67% thought it improved productivity. This proves how reducing employee turnover and increasing productivity are further key reasons for constructing a business case for flexible benefits .
Communication
Increasing employees' understanding of total reward is becoming a much more important driver for flexible benefits --17% compared with 13% in last year's survey. However, in many cases this is not making as big a difference to levels of understanding as employers would like.
This concern is more prevalent among those who have introduced less sophisticated flexible benefits arrangements (36%) than full flexible benefits plans (18%).
Phil Murray explained: "Communication and education have an important role to play in helping employees understand and value the options available to them under a flexible benefits plan. Communication should be viewed as a direct marketing activity, using sophisticated techniques (such as adjusting the communications material according to different audiences) to drive up active participation, which we know correlates with higher employee engagement."
Pensions into flex
Hewitt's survey also showed that the majority of new flexible benefits implementations are bringing pensions inside the schemes.
Phil Murray said: "We are likely to see much more demand for flexible pension provision -- resulting from several drivers. Employers are facing the pensions simplification measures to be implemented in April 2006, potential hard cost national insurance savings and the move towards defined contribution pension schemes --all of which are more suited to greater flexibility."
Want to know more?
Title: Employer Attitudes to Flexible Benefits, Hewitt Bacon & Woodrow.
Sample size: Nearly 190 organisations participated in the survey, spanning a range of industry sectors and organisation sizes.
Availability: Flex Comes of Age, a pré cis of the five key trends emerging out of this year's survey, is available free of charge at http://was4.hewitt.com/hewitt/worldwide/europe/uk/news_views/reports_pubs/publications/people/flex_survey2004.htm
This 20-page report also includes case studies of:
Email alita_mcguinness@hewitt.com to request your copy of the main report entitled, Employer Attitudes to Flexible Benefits, which includes additional commentary and more in-depth analysis on the feasibility, consultation, and ongoing administration of flexible benefits (price £200 plus VAT).
Hewitt Bacon & Woodrow was formed in June 2002 following the integration of Hewitt Associates and Bacon & Woodrow. It is the UK and Ireland business of Hewitt Associates, a "global outsourcing and consulting firm delivering a complete range of human capital management services". For more details visit www.hewitt.com
Posted 22 November 2004