Depending on who you ask, flexible benefits were born in the UK anything up to 17 years ago. At last it’s ready to come of age, but the question for many businesses is how to treat this “angst ridden teenager” element of reward strategy to get the best from it.
For years, flex has struggled, like many teenagers, to be taken seriously. Now, one of the greatest challenges for modern business is the battle for talent, and it is time to treat flex as a serious grown-up. The key to flexible benefits’ coming of age is its transition from the status of “nice to have” to “must have”.
The challenge is that many businesses see flex as merely a hygiene factor, a necessary requirement to compete in the battle for talent. However, in the rush to “do flex” some have lost sight of the fact that flex isn't a strategy in its own right - merely a delivery mechanism. They have lost sight of how to treat flexible benefits to get the most out of its undoubted talents.
HR is rightly gravitating towards a more strategic function within many businesses and this is causing some to reassess whether, having implemented flex, it is really working for them and delivering against the business' corporate objectives. By taking a more strategic view of flex, we can see how best to optimise this “infant terrible”.
So what are the factors to consider?
1. Significant benefit changes in the marketplace
Salary sacrifice, the “green agenda” and the impact of age discrimination legislation are just some of the changes that affect the benefits marketplace. In light of these, it is worth undertaking a full benefits review to consider different pricing models or revisions to the options offered. So much has changed in the past few years that the cost of this exercise can be more than offset by the gains available.
2. Flex “fatigue”
For many employees, flexible benefits have been around for so long, that they have forgotten they exist. Employers need to look at new methods to keep their flexible benefits schemes fresh and relevant by engaging employees in new ways, for example by refreshing the employer benefits “brand” and reviewing the communications used to keep employees engaged.
This could include the use of podcasts, SMS and, for the more adventurous, deploying enterprise social networks which not only engage but also have the potential to improve productivity.
3. The constant war on costs
Return on investment isn't just about saving employer national insurance contributions, there is also a need to calculate the savings from lower staff turnover and the increased productivity of more engaged employees.
Research conducted by Burke showed that for a leading high street bank, flexible benefits could be directly attributed to saving the organisation £2,500 per 100 employees through lower staff turnover. It also found that improved employee engagement, derived from flexible benefits, provided the organisation with an extra £18 for every £1,000 that the firm currently earns as revenue from its customers.
4. Corporate information overload
New research by You at Work shows that integrated communications are the key to driving take-up in benefit options. We surveyed 2,000 employees to investigate the “communications gap” between company benefits programmes and perceptions amongst employees. Our survey revealed that most employees cite time pressure as the number one reason for not visiting their company benefits web site and that an integrated communications strategy combining work email and mailings to the employee’s home are the most effective.
This research highlighted some interesting points in the battle to get the message across to employees. The importance of using mixed media is clear, not only to repeat and reinforce the message but also to appeal to the preferences of all the segments in the workforce.
In addition, the research confirms that communicating to people at home has a real impact. Benefits are a personal thing, so talking to people in the right context (for example at home, with the right information to hand and without any work distractions) can give employee benefits programme a real boost.
Companies need to return to thinking about strategic basics whilst also investing in the best of new technology. If they do this, we could see flex mature into adulthood and be given a whole new lease of life.
Dorian Hannington is Head of Client Implementation at You at Work.