More employers opting to flex benefits

FLEXIBLE BENEFITS

More employers opting to flex benefits

A growing number of employers are becoming convinced of the case for flexible benefits as concerns over the practical barriers to implementation lessen, according to a new report by Incomes Data Services.

IDS reckons that part of the reason for this is the expanding competitive marketplace among suppliers that has led to improved products and services and lower costs. Meanwhile, the advent of lower-cost online flexible benefits solutions is easing worries over the additional administrative headache, so often portrayed until now as a barrier to the implementation of a flexible benefits scheme.

Business case for flex

As IDS points out, flex can offer employers a competitive edge in the labour market, acting as a valuable recruitment and retention tool that enables the employer to "stand out from the crowd". Moreover, by giving individuals a say in the shape of their benefits package, it recognises that workforces consist of individuals with very different priorities and lifestyles.

A flex scheme can also be a cost-effective way for an employer to broaden the range of benefits available. And following a merger or acquisition, flexible benefits offers a route towards harmonisation.

Trends in design and implementation

Among the trends in scheme design identified by IDS are:

• Increasingly organisations are giving employees the option of using a significant amount of salary to "buy" benefits, rather than limiting them to a nominal flex fund.
• The range of items on offer within flexible benefits plans is expanding.
• Manual workers are included in some schemes.
• Corporate intranets and the internet are now central to scheme enrolment and this trend is likely to continue as employee self-service becomes more common.

What's in this report

The 80-page IDS StudyPlus contains the following four sections:

Overview making the business case trends in flex design and implementation.

Analysis Examines the major elements of implementing a flexible benefits scheme: communications strategy deciding on how flex is to operate drawing up the benefits menu selecting enrolment options setting up scheme administration.

Case studies Nine detailed case studies explore why organisations introduce flexible benefits, how they implemented their schemes and what administrative solutions they adopted. They include details of the make-up of the flex fund which employees use to buy benefits, the benefits options available and the choices that employees made. Spread across 35 pages, the case-study companies are as follows: Prudential UK & Europe Cadbury Schweppes The Audit Commission Hitachi Europe Fujitsu Telecommunications Europe Denton Wilde Sapte Cap Gemini Ernst & Young UK Severn Trent Water Vanco.

Directory of suppliers A listing of 15 consultants active in this field, including a number of new entrants offering specialist software. The directory indicates how they would work with a client to approach the different phases of a flex project. It also provides an eight-point checklist of important issues to consider when selecting a flexible benefits consultant.

Want to know more?

Title: "Flexible benefits", IDS StudyPlus 762, Autumn 2003, Incomes Data Services.

Availability: Call IDS customer services in London, tel: 020 7250 3434. For a fuller flavour of this service, take a look at the list of recent IDS Studies together with abstracts which can be found on the IDS web site at www.incomesdata.co.uk/studies/subjectlist.htm

Incomes Data Services is an independent research organisation providing information and analysis on pay, conditions, pensions, employment law and personnel policy and practice in the UK and rest of Europe. For more information about IDS jump to www.incomesdata.co.uk

Posted 21 November 2003