Flexible benefits give choice to employers as well as employees. But how do they work?
With flexible benefits, employees get to tailor their employee benefits package by selecting the benefits that are most beneficial and valuable to them. For their company, this means their employees are getting the very most out of their employee benefits package.
Flexible benefits schemes or flexible benefit plans can come in different shapes and sizes depending on the needs of the company and its employees. These slight variations could affect how flexible benefits work for that company in particular, however most flexible benefits plans follow a similar structure.
So, how do flexible benefits work?
Selecting the best employee benefits
The first stage typically involves the company choosing which employee benefit schemes to include in their flexible benefits plan.
The organisation may survey staff to find out what their needs and wants are and how employee benefits can solve these and provide value before deciding which benefits to include.
They may also consider how the working environment has changed, how it is likely to change in future, employee benefits trends and how new employee benefits coming into the market could benefit their staff.
For example, how will employee health and wellbeing benefits be affected by the coronavirus pandemic?
When working with an employee benefits provider, you could have either an off-the-shelf flexible benefits setup or a more bespoke, tailored setup that allows you to include benefits specific to your company, for example.
You may have employee benefits unique to your company or brand that could be included.
Setting a flexible benefits allowance for employees
Once the flexible benefits scheme has been set up the employer then sets a flexible benefits allowance for employees.
A flexible benefits allowance is like employee benefits currency and gives employees a set value which they can spend on benefits of their choice.
There are a number of ways a company’s flexible benefits allowance can be set up. For more on this, take a look at our guide to setting your flexible benefits allowance.
Employees can then tailor their benefits
Employees can then tailor their employee benefits to suit them using their flexible benefits allowance.
So, for example, for those who live a little closer to the workplace who enjoy cycling, they could allocate some or all of their flexible benefits allowance to the Bike to Work scheme.
Alternatively, those who want to spend a little more time with their family could spend their allowance on extra annual leave through the Holiday Trading scheme.
It’s important for employers and employees to think about enrolment windows when it comes to flexible benefits. Some employee benefits may only be open for enrolment for a few weeks during the year or during a set period.
So, if you’re a company setting up flexible benefits, it’s worth considering how you structure your scheme enrolment windows and how any unallocated flexible benefits allowance can be used by employees.
There are also things like life events to consider. Employees shouldn’t miss out on the chance to benefit from their employee benefits should a life event occur.
Getting the most from flexible benefits
Flexible benefits can give employers a really clear idea of which employee benefits employees value the most.
More specifically, it makes it easier to see which benefits are the most popular with different demographics within the business.
The company can also see whether employees are using all of their flexible benefits allowance and can make adjustments based on this. For example, if employees are typically using their maximum allowance, maybe their allowance could be raised in the next fiscal period.
If employees aren’t using their full allowance, it could be because the range of benefits on offer isn’t appealing to them.
If employees are typically allocating more of their flexible benefits allowance towards health and wellbeing benefits, then introducing more benefits such as these could be effective.
There are a huge number of valuable insights to be gained through the use of flexible benefits. Surveying staff about what benefits they would like to see is one thing but gathering data on their use of benefits gives a whole new insight.
Flexible for you and for your employees
Flexible benefits really are flexible for both employers and employees. This means that while this article shows how flexible benefits work typically, this isn’t necessarily how flexible benefits could work for your business.
There isn’t a right or wrong way to go about setting up your flexible benefits plan, however there is a most effective way.
To find out the most effective way of implementing flexible benefits within your company, get in touch and we’ll take you through how flexible benefits could look at your company. Alternatively, take a look at our flex benefits platform overview.