Standard benefit schemes undervalued by employees

EMPLOYEE BENEFITS

Standard benefit schemes undervalued by employees

Standard benefits schemes still seem largely undervalued by employees and poorly communicated by employers, according to a survey by thomsons online benefits.

As a result, the majority of employers are not "leveraging proper value" from their expenditure on benefits. The research also suggests that the "spread of flexible benefits in the UK is finally living up to the hype".

Michael Whitfield, managing director of thomsons online benefits, said: "This is largely due to the fact that the cost of web-based technology has reduced and its ability to mass produce benefit administration makes flex an affordable option even for SMEs."
thomsons online benefits also found evidence that employers with flexible benefits schemes in place are getting better value for money. "The majority felt that their employees valued flexible benefits more than a standard offering and four out of ten reported that it had assisted their recruitment and improved their employee retention rates," the report says.

Nevertheless, there are signs that even employers with flexible benefits could do more on this point. For example many survey respondents had no formal evaluation processes in place to measure the success of their flex implementation, with the majority relying on measuring their success using general feedback (53.5%).  

Key survey findings

The research is based on survey returns from 430 UK firms. Key findings shedding light on the changing reward management landscape include:

Flexible benefits The number of companies with a flexible benefits scheme in place has doubled over the last year to 10% of respondents. Combined with the number of employers currently in the process of implementing flex (2.6%) and those considering implementing such schemes (12.3%), a total of 24.9% of respondents have, or are actively considering implementing, flex. Web-based software is the most common method of administering such schemes (39.5%). Communicating effectively is the greatest challenge in implementing flexible benefits. Half of those who have rejected flex did so over fears of the administration costs. The three methods respondents were most likely to utilise when selecting the appropriate range of flexible benefits were management decision (46.5%), conducting an employee survey (44.2%) and comparison with competitors (39.5%).

Salary sacrifice Four out of ten respondents are considering introducing a salary sacrifice driven benefit in 2005 to leverage tax and national insurance savings 27% are considering the home computer initiative and 26.8% childcare vouchers.

Benefits The majority of UK employers (60.7%) continue to offer their employees a standard benefits schemes (where employees are provided with a fixed menu of benefits by their employer). But just 2.3% of employers with a standard benefits scheme believe that it is highly valued by employees. Eight out of ten respondents plan to review their benefits during 2005. Paper-based administration systems are still the most common method used by respondents with a standard benefits package (36.4% of respondents), followed by third party administration (20.7%).

 

A final word

Want to know more?

Title: Employee Rewards Watch 2005, thomsons online benefits.

Methodology: Respondents were invited to complete an online questionnaire from January to March 2005.

Sample size: The research is based on survey returns from 430 organisations in the UK.

Availability: You can obtain a free copy of the 44-page report by calling thomsons online benefits tel: 020 7802 5855.

thomsons online benefits was founded in 2000 to "revolutionise the way that benefits are administered and communicated". Further information can be found at www.thomsonsonlinebenefits.com

Posted 10 May 2005