As 2020 looms and we move into a new decade, it might be a good time to ask if employee benefit schemes are still relevant? In the past, a business case for implementing a flexible benefits scheme may have been based on the monetary return on investment through employer NI savings.
This is still relevant by applying salary sacrifice to your pension scheme, however the rules around other benefits has tightened over the last few years. Furthermore, the reason for spending time and effort to design the right flexible benefits scheme has always been about more than making tax savings; benefits provision and freedom of choice is very much part of the employee engagement cocktail.
Engagement is a subjective and personal goal that means different things to different people but one of the key elements is making the employee feel cared for – and, therefore, valued – by the company. Providing a range of benefits that show they care about the individual employee’s varying needs helps to demonstrate this, so it is important to think about what you are trying to address when designing your scheme. A pension shows they care about an employee’s future beyond working at the company. Health benefits demonstrate a concern about keeping them well so benefits like private medical insurance, health screenings, health care cash plans and dental insurance are important. Whilst physical and financial wellbeing benefits like gyms and savings accounts provide products and services that show awareness that there is a life outside of work and lifestyle benefits, like holiday purchase, cater for that vital work/life balance.
Optimising the employee experience
Of course, you could provide these benefits as voluntary and standalone, but pulling them together into a flexible benefit scheme supports that other HR focus on providing the best possible employee experience. Using a benefits platform centralises the experience for employees meaning they don’t have to visit ten different provider websites or complete forms to choose a benefit. It can all be done easily in one place and the fact they can see the impact on their pay can help them make the right decisions; and means that they aren’t at risk of defaulting on direct debits causing financial stress. And if you run some benefits through salary sacrifice this can lead to savings of 12% for lower earners.
There are also benefits that you can offer that employees couldn’t buy for themselves on the high street or wouldn’t be available due to their credit rating. Think about the young employee taking a company car and not having to worry about the insurance and maintenance or the person with unconsolidated debts struggling to pay them off at high interest rates these can be addressed by offering a salary sacrifice car scheme and a loan service benefit.
Furthermore, the best benefits platforms offer clear, up-to-date, accurate and helpful total reward statements. It won’t make your pay or benefits better but it allows you to communicate and emphasise the value you place on them through their pay and benefits.
The employer experience
From an employer experience perspective having a single, easy to use system that provides the correct inputs for payroll needs to be painless. The administration of the system should be a simple and self-service, not complicated and needing to be outsourced. The modern flex platform puts the control of a scheme in the hands of HR who can check employee selections and update them, make text updates, update data and run reports when they wish or even rebrand their site in a matter of seconds.
When it comes to the cost of flexible benefits schemes and platforms, they have previously been the preserve of the largest organisations that are willing to spend a lot of time and money to design and refine their schemes to the nth degree of detail. This meant the solutions on the market were complex, required specific skills to implement and manage and took forever to set up with complex maintenance issues. The change that Zest has brought to the market has been to use modern technologies and a powerful, simple configuration process to reduce the effort required. It means schemes can be set up in a matter of hours and days, rather than weeks and months. Flexible benefits schemes are no longer just for the large corporate but offer significant value and opportunities to the smallest of organisations.
What to expect in the future?
As we move into a new decade, the trend for providing benefits that help employees manage their physical, mental and financial wellbeing will continue to expand as a way to help employees and contribute to their engagement.
Alongside existing providers such as Incorpore with their Gymflex and new Healthiflex products, it will be interesting to see if subscription services such as Peloton make a foray into the corporate market as they incentivise and gamify fitness to keep motivation and commitment higher. The same applies for healthy and convenient food subscriptions like Hello Fresh. Getting the right work/life balance by allowing the purchase of additional holiday is relatively common but tying this in with holiday vouchers from the likes of organisations like Travel Accounts to help spread the cost and allow employees to use their holiday in a way that enriches their lives will increase. Current providers that help with borrowing such as Neyber, Salary Finance and Wagestream who provide loans or advanced salary payments will become the norm whilst Smarterly and others that provide the ability to invest savings will also become more commonplace. Using the power of a modern platform such as Zest’s simple configuration and its pre-set ‘single sign-on’ integration with providers like Neyber make implementing new benefits a doddle.
Technology trends will mirror those in the wider world, with a burgeoning demand for data to help inform HR about the effectiveness of benefits in making an impact on engagement. There will need to be amalgamation of data across systems to drive engagement and this will be led by machine learning and AI technologies. Platform providers will use data learning to analyse take up across the wider market to help recommend what benefits would suit a particular client’s employees. Trends in how benefits are offered will continue to push providers to truly offer anytime selection and employees will fast get used to recommendation engines with likely chatbot user interfaces.
What do you need to do?
You should always be reviewing what you do to improve so take time out to review your benefit strategy; does it fit the makeup of your workforce? Does it need a bit of a refresh? Which of the new benefits would it make sense to integrate in?
Are you using technology that provides a great employee and employer experience at an affordable price? If not, it may be time to check how the market has changed and what a state-of-the-art employee benefits platform could offer you.