There are many reasons why employers introduce flexible benefits.
1. It reflects the fact that employees have different needs and are empowered to choose the combination of benefits and benefit levels that are most appropriate to their lifestyle, age and personal circumstances.
For example, a married employee with children is more likely to want to cover his family for medical insurance, whereas as an employee who is young and single may prefer to increase his annual leave and take an extended vacation.
2. Increased levels of employee attraction, motivation and retention
As flexible benefits are typically valued more highly than standard benefits many employers find that empowering their employees to make their own benefit decisions has a motivational effect, which means that employees do not need to leave the organisation in order to find the benefits package they want.
3. Valuable tool for employee recruitment which enhances the employer brand
As potential employees tend to value flexible benefits over standard benefits, employers often find that they both receive more applications for vacancies and can reduce the length of their typical recruitment cycle.
4. Improved cost control
Flexible benefits maximizes the employees perception of the value of the employer's reward spend. The flexible benefits process requires the total remuneration costs for each employee to be used as the basis for benefit calculation. This means that your business will have easy access to this key, employee specific data and feedback from our clients has shown that this new control is a significant help in the ongoing budgetary process that all businesses undertake. Some employers choose to use flex to protect themselves against rises in risk premiums.
5. Demonstrates the value of benefits and total remuneration clearly to employees
With a traditional benefits package employees typically do not know how much it costs the Company to provide them with these benefits and consequently they do not appreciate the full value of their employer's spend. Flexible benefits helps employees appreciate the value of the non-cash elements of the benefit package, a significant step to ensuring that your employees take ownership of their benefits.
6. Reinforce Company culture/assist culture change
Many employers seek to implement flexible benefits to either reinforce the culture they hope to promote or to assist in changing the culture to one where self-service and flexibility are paramount. 7. Assist with mergers and acquisitions or internal re-organisation
Following a merger or acquisition, a flexible benefits structure could provide a framework to consolidate different benefit arrangements under one framework.
8. Encourages self-service
Often flexible benefits are introduced as part of a wider HR strategy to shift all employee led transactions (for example the booking of absence) on to a self-service basis.
