Ultimate guide to flexible benefits schemes from Zest
Flexible benefits are vital for employee engagement. They provide flexibility and save your employees money. They allow employees to tailor their needs to the things that matter most. Where possible, it also lets them decide how much they want to contribute to certain benefits.
For many, mental, physical and financial wellbeing support is just as important as the bonuses, discounts and perks that go with flexible benefits.
In fact, according to our research, 83% of employees are demanding more benefits that contribute to their wellbeing. More than half (55%) of 18-34-year-olds regard a good benefits package as the most important thing when searching for a job, with 54% of employees saying they would leave their job if another company offered better benefits package.
How does a flexible benefits scheme work?
Some benefits are deemed ‘core’, meaning all employees are automatically enrolled and do not have to pay a penny. Others are optional, voluntary or flexible. This means you provide the flexible framework, such as group policies, and may subsidise the cost, but ultimately the employee can choose to join, increase or decrease core cover. They can also choose to participate in optional scheme (s) and thereby tailor their package to best suit the needs of either themselves or their loved ones.
Employers can also provide flexible benefits that offer allowances.
With an allowance, you can assign each member of staff a budget to spend on benefits they would like to receive. For example, you might provide an allowance to help employees working from home, their mental or physical health, or their professional development.
Employees can then purchase services relevant to those areas and claim back the costs against their allowance, which HR or your benefits team can approve or decline.
Advantages of providing a flexible benefits scheme
While certain benefits are regarded as a core offering, flexible options mean you can negotiate more competitive deals for your workforce, reducing admin.
Take pensions for example. While your staff will be automatically enrolled should they meet the requirements, employees will have the opportunity to change (flex) how much they want to contribute to fit their needs. Planning for a comfortable retirement is important, and flexible benefits make that possible.
How to choose which flexible benefits to offer
Ultimately, this comes down to the core pillars of areas employers want to address.
You have financial benefits (pensions) and protection (life insurance, critical Illness and income protection). You also have wellbeing benefits (private medical insurance & dental, cash plans etc.) and quite often schemes will also be topped up by physical exercise benefits including gym membership.
Recently environmental and sustainable benefits have become increasingly popular, with some companies looking for offerings that include carbon offsetting. Choosing which to offer can also depend on employee demand. This changes on demographic. For example, if there’s a high number of working parents, they may look for a nursery provider.
Examples of popular flexible benefits
1. Holiday trading
There has been a huge uptake in employees wanting to buy extra annual leave and you can also make tax and national insurance savings too.
2. Pensions
It’s known to all generations and pretty much everybody has one. Flexing your contributions has become increasingly popular as people look to secure a more comfortable retirement.
3. Private medical insurance
PMI is becoming increasingly popular, and plans can be upgraded to include family members with different levels of cover.
How to increase employee uptake of flexible benefits
- Start the conversations.
- Encourage internal promotion.
- Ask managers to lead from the front.
There’s often a big focus on uptake when employers should also be focused on value too. Find out more by reading our Ultimate Guide to Employee Benefits.
Benefit submissions and uptake is also a wonderful way to measure your metrics. It allows you to see what’s popular, creating stories around what works for certain employees, certain demographics.
Find out more information on how Zest can help you implement a flexible benefits scheme.
In partnership with Zest
Zest is the next generation platform that’s reinventing the world of employee benefits.
