FLEXIBLE BENEFITS
One in five employers offer flex
Flexible benefits are no longer at the margins of mainstream reward practice with one in five employers now offering a flex plan, according to a large-scale survey by Employee Benefits magazine.
A combination of improved administration, lower entry costs and the fact that employer's competitors are increasingly likely to provide flex means that the proportion of schemes doubled in 2002 from just 9% of employers to the current level of 19%.
The 684-employer survey found that 24% of those with flexible benefits had introduced it in 2002. "Schemes were launched across all employer sizes and sectors in 2002, but there was a striking number of launches in smaller organisations," says Employee Benefits.
What is a flex plan?
Employee Benefits defines a flexible benefits schemes as:
"A formal plan whereby staff can trade between employer-paid benefits or between employer-paid benefits and cash. Staff are given a fund or points which they can use to select from a set menu of benefits. These are different to voluntary benefits which are discounted products available through employers but paid for by staff."
What benefits?
The most popular benefit on the flex menu is private medical insurance, offered by 61% of respondents, followed by the opportunity to buy and sell annual leave (58%) and dental insurance (52%).
Use of technology
Last year, eight in ten schemes still used paper-based enrolment and under a quarter said they used their intranets. The latest survey shows that over a quarter (27%) have completely IT-based administration and only 14% are entirely dependent on paper.
Once in place, 54% of respondents administer the scheme in-house. But more than two-fifths of those with flexible benefits (42%) had problems with complexity of administration.
Effectiveness of flex plans
| Do you believe your flexible benefits plan has been effective in any of the following? | |
| Showing employees the value of their benefits | 62% |
| Aiding recruitment | 53% |
| Improving retention | 46% |
| Harmonising benefits | 45% |
| Reinforcing company culture | 43% |
| Improving/maintaining staff motivation | 38% |
| Making you an employer of choice | 37% |
| Removing/reducing status symbols | 31% |
| Reducing/containing cost of reward | 24% |
Sample size: 130 respondents with flexible benefit schemes.
Source: "Flexible benefits supplement", Employee Benefits, April 2003.
Want to know more?
Title: "Flexible benefits supplement", Employee Benefits, April 2003.
Methodology: Respondents completed an online questionnaire in February 2003.
Sample size: The 684 employers which responded to the survey were from organisations of all sizes. Two-thirds of respondents (65%) had more than 100 employees, and 10% had over 10,000.
Business sectors: The financial sector was particularly well represented with 29% of respondents, followed by the service sector (18%).
Availability: You can subscribe online to Employee Benefits at http://sales.centaur.co.uk. To read the report online visit www.employeebenefits.co.uk
Posted 7 May 2003