Can flexible benefits help SMEs improve their “employee proposition” in a war for talent?

The recent article on People Management website (08/08/12) stipulated that flexible benefits are becoming a norm. Although a norm in larger organisations smaller businesses have also begun to recognise the merits of so called “flex”.

I remember trying to source a suitable online flex portal and a flex administrator about 4 years ago when I was implementing a new benefits scheme at a successful small business. When speaking to suppliers I was told time after time: our solutions do not fit SMEs. We were a bit ahead of the time on that occasion but a year later we managed to find a provider who recognised SMEs’ need for innovation in benefits provision.

An increasing number of flexible benefits providers now cater to the needs of small and medium size businesses, a testament to a raise in demand for flex amongst SMEs.

And why would SMEs want to lag behind? The beauty of flexible benefits is that they are….flexible. They come in many shapes and sizes depending on the needs of a business, a budget, demography of employees, etc.

At the upper end of the scale is a “full flex” package consisting typically of core benefits, flexible benefits and voluntary benefits. A typical “full flex” scheme would allow employees to “buy” selected flexible benefits up to an agreed value in addition to core benefits, which are preselected by the employer. Private Medical Insurance; dental plans; income protection cover, death in service cover etc. are all a potential core or flexible benefit. An employee would also be able to sacrifice part of their salary for a voluntary, tax efficient benefit (HMRC approved) and achieve a National Insurance and tax saving on the difference in salary pre- and post- exchange. The lower end of a flex scale would typically incorporate either a selection of voluntary benefits or a mix of core and voluntary benefits.

It would be difficult to operate a “flex” effectively without an online flexible benefits portal. Some portals providers are able to tailor functionality to meet very specific client’s needs, e.g. running different offerings for different staff categories. This means there is no need to change your entire benefits strategy to fit in with a hosting platform.

As legislation becomes more burdensome on the employer through introduction of pension auto enrolment commencing this October, some online benefits portal providers spotted an opportunity to integrate online auto enrolment into online benefits portals. Having all benefits and online auto enrolment managed in one platform sounds like a good idea and will undoubtedly further increase the popularity of portals.

Online benefits portals are a great reward, communication, and staff engagement tool. A typical portal generates Total Reward Statements, offers staff discounts and other staff information and services. From the management perspective, online benefit portals make administration of the process easier by gathering all data in one manageable place and encouraging employee self-service, relieving an administrative burden on the employer.

An increasing number of forward thinking SMEs see online portals as an investment in their own employer brand and a way of moving away from paper based benefits and pensions administration.

In a “war for talent” where many smaller businesses find themselves competing for skilled talented people with the larger employers, SMEs need to find ways of making their employee proposition more attractive. Well-structured and relevant benefits schemes, whether voluntary or mixed/ on or off line not only help SMEs improve their “employee proposition” but also help achieve improvements to key HR metrics, increasing business performance .

Although at the first glance benefits look like a minefield, they really are quite straightforward. Core plus voluntary schemes, if organised well, do not take much time and money to run and the benefits gained far outreach the investment. In my practice, following the implementation of a well-tailored benefits scheme, people feel more involved and more “in control” having been given a choice; they learn to appreciate the whole remuneration package, not just a basic salary; and are more likely to be proud to work for a progressive and caring employer. From the HR performance angle, impact achieved by the implementation of a benefit scheme would typically include an improvement in staff retention; staff engagement / job satisfaction; time taken to fill new vacancies and the quality of applicants.

If you are considering implementing staff benefits in your organisation, introducing voluntary or flexible benefits schemes or other reward schemes please do not hesitate to contact Aggy on 07789095897 or for a free, no obligation chat.

Disclaimer: please note that views and opinions expressed in this article do not constitute a business or legal advice. Please consult your business or legal advisor for advice suited to your individual circumstances.

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>