What is a Flexible Benefits scheme?
A Flexible benefits Scheme is a plan that recognises that individual employees have individual needs. It can also help with recruitment and staff retention.
What does a Flexible Benefits Scheme provide?
A Flexible Scheme provides the members with the opportunity to choose the benefits which best suit their specific needs. It does this by allowing forward thinking employers to offer their workforce a menu of reward options to match their personal circumstances. This can include a combination of flexible benefits, salary sacrifice and voluntary benefits that can be offered as a total reward package, specific to each individual employee.
Hartley Wadsworth & Partners can provide advice and help you understand the complexities of installing a flexible benefits scheme. There are many types of schemes, which can be offered. For example some schemes can be as simple as offering a menu of 6 options. This can be arranged at a set cost, to allow members flexibility whilst reducing administrative consequences.
Alternatively a full Flexible Benefits scheme offers total Reward Benefits Statements, which can be designed with your company branding and contain very helpful information to both employer and employee. For the employer, this provides a system dealing all aspects of employee benefits; it can be tailored to include holidays, pension details, life cover, absence management and various other helpful HR tools. From an employee prospective, he or she can access their personal information at any time using a password.
Is a Flexible Benefits package right for you?
Flexible benefit packages offer your employees an individual choice, but they can also offer advantages to your organisation. Employee rewards and benefits schemes can be a large demand on your annual budget. Cost can range between 1% and 25% of your annual payroll. You need to ensure that you are offering the right benefits and rewards package to your employees, whilst ensuring you are getting the most comprehensive benefits and levels of cover available.
Why choose a Flexible Benefits Scheme?
In today’s competitive marketplace, employers want to attract, retain and motivate a quality workforce. Employees are looking for a salary package that not only rewards them financially; it also compliments and enhances their home/work life balance.
How does a Flexible Benefits Scheme work?
The employer should consider firstly, their objectives, whether a combination of Salary Sacrifice and Voluntary Benefits can be included in a total rewards benefit package. The employer would then decide how much each employee should have to spend. The employees would then choose the most suitable benefits for their needs.
Installing a flexible arrangement is not an overnight thing.
Full implementation of a full flexible scheme can take 12 months to complete the various stages. In addition to employee surveys to get feedback on what they would like to see as part of the Flex scheme there are many other issues to be considered
How will you operate a flexible benefits scheme?
Who will have responsibility for each aspect of the scheme, including the set up process?
Will you allow the members to buy and sell holidays?
The current holiday year and benefits renewal dates may need to be re-aligned with the start of the scheme
Costs of Flexible Benefits
The cost of setting up a scheme will depend on the complexity of the scheme you decide to set up. For example the simplified scheme can cost a small percentage of salary. The larger schemes, which tend to be more complex will cost more.
For the total benefits rewards type schemes there are the following considerations to be taken into account. First there are the internal costs to consider. These would include the various phases such as, the research phase, lobbying phase, decision phase followed up by the selection and finally the review phase, all of which will take time and money.
There would be external costs, which can differ significantly, depending on the type of scheme and options you decide upon. The costs are likely to include the following.
- Feasibility Study costs.
- The Design and development consultancy costs.
- Set up costs.
- Ongoing administration costs.