HR Magazine: Flexible Benefit Schemes
21 May 2013
In theory, flexible benefits schemes should be a popular choice - wouldn't we all love a bit more flexibility in our lives? Yet it appears flex schemes are failing to catch on many organisations and their employees alike.
Research released last April by HR consultancy Towers Watson reveals that only 27% of companies offered a flex scheme up just So/o since 2007, and that 32% of employers said take-up of such schemes was lower than expected.
A flexible scheme lets employees choose the pay and benefits package that best suits their lifestyle and personal circumstances. They can, for example, opt for more tax efficient benefits or make salary sacrifices to boost their pension. Some confusion has come with the inclusion of additional voluntary benefits, which are generally discounted products and services paid for by the employee. This has led to the terms 'flexible' and 'voluntary' becoming interchangeable.
But it's not just words that might be stalling schemes with employers. Angela Wright, senior lecturer at Westminster Business School, describes the pace of growth of true flexible benefits schemes as modest.
"The costs and the time involved in setting up these schemes in relation to their value is a big factor in this trend," she says. Wright believes many providers had unrealistic expectations about take-up levels because they based their estimates on experiences in the United States. "They overlooked one critical factor, which is that employee healthcare is a must-have in the US, while in the UK it is a nice but not essential benefit," she explains. "Across Europe, the benefits that really engage people are based around flexible working and improving work/life balance, such as buying and selling holiday time."
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