Where, when and how?

first_img Comments are closed. Where, when and how?On 24 Sep 2002 in Personnel Today What needs to be considered when choosing and implementing a flexiblebenefits scheme?Organisations wishing to introduce flexible benefits will usually needsignificant help from an external consultancy at some stage in the process ofdeveloping and implementing a programme. However, there are some key stagesthat all organisations will need to consider. The company needs to think through the business reasons for starting a‘flex’ scheme: what is it trying to achieve? For example, some companies lookto flex to help solve problems in recruitment and retention. Others see it aspart of a culture change shift to encourage greater individuality. Some may bedriven by potential future cost control. Some may even just like the concept inprinciple, but need to find out more about it. Chad Daugherty, head of flexible reward design at Hewitt Bacon and Woodrow,suggests setting up a feasibility study to look into wider business issuesbefore implementing a flex scheme. He says: “You first need to understandat a high level how a flex plan will fit with your business strategy and rewardphilosophy.” Benefits and savings A typical feasibility study undertaken by Hewitt Bacon and Woodrow will lookat the technology available to individuals within the organisation, thecommunication strategy used and the other resources available internally. Costsrelated to the design, setting up and running the administration andcommunicating the plan to staff will be estimated. The costs can then be set against potential benefits. These include ‘harder’benefits such as tax and National Insurance savings, or savings fromcost-effective reward harmonisation using flex following a merger oroutsourcing deal, for instance. In addition to these are benefits such asreduced staff turnover or the ability to more easily attract and recruit thatare harder to quantify. Daugherty finds the harder, known savings are of more influence when theproposal is presented to finance directors. But with greater experience of theimpact of schemes, he is more able to show the financial impact of softerbenefits. For instance, he says that “with our experience we can workthrough examples of the type of savings that a 1 per cent reduction in staffturnover can lead to”. When designing a new flex plan employers often start by examining theexisting benefits package on offer, and working out which benefits are core –perhaps a standard level of life assurance – and which ones are to be ‘flexed’.As seen in the list on page 5, there are a wide range of benefits that can comeunder the flex scheme. Some may be seen as suitable only for particular rolesor levels of seniority – company cars, for instance. Particular benefits are more popular than others. Hewitt Bacon and Woodrowfinds that flexible holiday entitlement is usually very popular with employees.Detailed development of the scheme throws up a range of issues – decidingwhat impact changes will have on existing maternity or sick leave policies,determining how often rules can be changed, and so on. Consultants can advise on additional areas, including accessing externalfunding – for example the Department of Trade and Industry makes fundsavailable for companies implementing work-life balance initiatives – andensuring legal compliance. The company must decide how to operate the ongoing scheme – whether tooutsource the administration or to perform it in-house, and depending on thischoice, what short- and long-term additional resources will be required. Developing key messages for employees at an early stage allows acommunications plan to be developed. This will often fit within the existingcommunications strategy of the company, although additional techniques may berequired. Tell the employers about it Introducing a flexible benefits plan, managed properly, can send out apowerful message to employees that they are valued and the introduction of theplan can also be communicated externally to aid recruitment and position thecompany as innovative and exciting. How long will it take to introduce a new scheme? In Daugherty’s experienceusually upwards of eight months and up to 15 months for more complex plans.This depends on a number of factors, how complex the scheme is, the variationin terms and conditions across the company, the availability of clean data, thesystems and processes that need to be implemented, and the resources availablefrom the organisation including the degree of involvement from seniormanagement. Previous Article Next Article Related posts:No related photos.last_img

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