Contents
Implementing a flexible employee benefits package is a great way to support your employees while also increasing productivity in your organisation. By offering a wider range of benefits and giving individuals ownership over the schemes they engage with, you can develop positive relationships with employees, helping to boost loyalty, engagement and job satisfaction.
In this guide, we’re going to explore the benefits of a flexible benefits scheme, what one should include, and how to successfully implement and manage it.
What is a flexible benefits package?
A flexible benefits scheme is a method of delivering employee benefits that allows individuals to choose which schemes they enrol in. Instead of enrolling all workers in the same set of schemes, this package offers greater ownership over employee perks. Flexible benefits examples include private medical insurance, public transport discounts and additional pension contributions.
How do flexible benefits package Work?
Companies using a flexible perks scheme tends to offer a wider range of benefits than those with a fixed package. However, instead of automatically enrolling employees into each scheme, the employer leaves the decision up to the employees. This usually involves a self-service portal, allowing employees to log in and manage the benefits they wish to receive.
Depending on the terms of the specific flexible benefits available, employees may be able to opt in and out whenever they wish, rather than being tied to a 12-month commitment. This is particularly useful for benefits that operate on a salary sacrifice basis, which may become unaffordable due to unforeseen circumstances.
What to include in a flexible employee benefits package
What you include in your scheme is up to you. However, it’s important to consider the needs and preferences of your employees so you can offer a range of flexible employee benefits that actually add value.
Let’s take a look at some popular flexible benefits examples.
1. Gym memberships or free classes
Free or discounted access to a local gym or fitness classes helps employees to save money and prioritise their wellbeing. As well as promoting physical health, the mood-boosting benefits of exercise can also increase productivity in the workplace, leading to a happier and more efficient workforce.
2. Buying or selling annual leave
Implementing a flexible scheme that allows employees to buy or sell annual leave is a great way to support a healthy better work-life balance. It offers a fair way for employees to take additional time off where needed, or to receive a little extra cash for any days they don’t use. Our guide to annual leave offers more insights into how to create leave processes that support employee engagement.
3. Private medical insurance
Private medical insurance allows employees to take better control over their health and wellbeing without requiring a large financial investment. For businesses, giving employees access to more healthcare options minimises lost productivity from sick days and avoids the need to make arrangements for long-term sick leave.
4. Pension contributions
Most UK businesses are now legally required to automatically enrol their employees in a pension scheme. However, some employees may wish to save more for their future, and offering a quick and easy way for them to pay into a pension through salary deductions can be a great benefit. You may also choose to match or top up their contributions to further encourage employee retention.
5. Transport benefits
Transport benefits make it easier or cheaper for employees to commute to work. These schemes include things like cycle to work, fuel allowances and discounted bus or train travel. Reducing the financial burden that commuting can have on employees is a great way to increase retention, particularly for businesses that aren’t able to implement remote working.
Advantages of flexible benefit schemes for employers
While they’re of course designed to benefit employees, there are many advantages for employers of offering these packages. Let’s explore them in more detail.
1. Gain valuable insights into employee preferences
By paying attention to the benefits that employees are using, as well as the ones they aren’t, managers and HR professionals can learn more about the needs of their staff both inside and outside the workplace. This information can be valuable for shaping future benefits offerings and ensuring that resources are allocated to the most valued and effective flexible benefits schemes.
2. Greater flexibility
One of the great things about a flexible employee benefits package is that it can be as flexible for you as it is for your employees. This means that you can adjust benefits offerings based on budget constraints and business needs, allowing for cost-effective management of employee benefits while still providing attractive options to staff.
3. Employees are more motivated
As we’ve seen in the above examples, these types of schemes are great for motivating employees. When employees feel valued and their personal needs are met through tailored benefits, they’re more likely to be productive and feel committed to their roles. This can lead to significant cost savings by reducing turnover and increasing efficiency.
4. Attracts potential employees to your organisation
Similarly, the inclusion of a flexible employee benefits is a great selling point to include in job adverts. In a competitive job market, offering a comprehensive and customisable benefits package can set your organisation apart, making it more appealing to top talent and improving your chances of securing the best candidates.
Advantages of flexible benefit schemes for employees
These schemes offer even more advantages for workers than traditional benefits schemes and help to support different stages of the employee life cycle.
1. Employees feel more engaged at work
By allowing individuals to choose their own perks, you can improve employee engagement, which is essential to optimise long-term business performance. Employees who feel more engaged in their roles tend to have higher job satisfaction, better morale and a stronger connection to the company, all of which lead to WHAT.
2. Healthier, more active lifestyles
Benefits such as a cycle to work scheme or private health insurance help to create a happier, healthier workforce. These benefits provide additional support to maintain mental and physical health, reduce stress, and improve overall quality of life both at work and at home.
3. Employees get to customise their benefits
Customised benefits allow employees to choose which schemes to enrol in. This means that they don’t have to make additional contributions for benefits that they don’t need or want, and they can save money on things they were going to invest in anyway, such as a gym membership.
4. Tax advantages
Salary sacrifice schemes, such as those used for pension contributions, make it easier for employees to save money without increasing their taxable income. This can lead to significant tax savings, allowing employees to make the most of their earnings to meet their personal and financial goals.
How to implement a flexible benefits package successfully
Successfully implementing these packages takes careful planning. Just offering a huge range of benefits isn’t cost effective and can be complex to manage, so it’s important to use a strategic approach for the best results.
1. Assess the need and define your objectives
First of all, you need to assess whether there’s a need for flexible employee benefits and, if so, how you can use them to meet your short- and long-term business goals. For example, you might decide against it if your workforce is small, or if your current benefits already meet employee needs effectively. However, if employee satisfaction, retention or engagement are areas that you need to improve, these benefits can support these objectives and enhance your overall value proposition.
2. Choose which benefits to include
Next, you need to decide what to include in your flexible benefits scheme. Great ways to start include exploring the examples we’ve looked at above, researching what others in the industry are offering, and asking your employees what benefits they’d like to have. Remember to choose benefits that align with the needs and objectives you identified for your business. This ensures that your benefits package remains relevant and valuable to your workforce.
3. Communicate with employees and stakeholders
Effective communication is crucial for the success of a flexible benefits package. Make sure to clearly explain the new benefits, how they work, and the advantages for employees and stakeholders alike. Engaging them early in the process can also help to address any initial concerns and gather feedback to make sure the choices you make are in the best interests of all parties involved.
4. Implement appropriate learning resources for employees
To maximise the uptake and effectiveness of your benefits scheme, provide learning resources that help employees understand their options. As well as showing them how to use any benefits software that you introduce, it’s important to educate employees on how to select and use their benefits to get the most value out of them. E-learning has lots of benefits for educating the entire workforce quickly and effectively, while offering Q&A sessions allow you to more actively support individuals and educ
5. Launch your flexible benefits package
Once you’ve planned and prepared, it’s time to launch your package. You can ensure a smooth rollout by offering support through HR and management teams and providing clear instructions on how to enrol and use the new benefits. Closely observe the implementation process and be ready to address any issues that arise, ensuring a successful and positive transition for all employees.
Maintaining your flexible benefits scheme
The process doesn’t end once your package is in place. Ongoing monitoring and maintenance is essential to ensure that it continues to meet the needs of your employees, and that any benefits you offer are still financially viable for the organisation.
Provide consistent support
Immediately after the implementation of a new scheme, or during the onboarding process for a new hire, the different types of benefits and the process of enrolling or claiming will be fresh in your employees’ minds. However, some types of flexible benefits might only be used on rare occasions, such as medical insurance claims, so it’s important to offer ongoing support to make sure employees are always able to access the benefits they’re entitled to.
Listen to employee feedback
Whether implementing a brand-new benefits package or reworking your current offering, make sure to regularly ask your employees for feedback. From the user-friendliness of your employee self-service portal to the types of benefits available, there are many important insights that can help you to optimise the scheme. As well as ensuring that the perks offer value to employees, this feedback can help you to maximise your return on investment and boost important HR metrics like engagement, satisfaction and retention.
Add to the list of benefits you offer
It’s important to use a strategic approach to ensure that your benefits continue to work for your organisation and its employees. Like any other business strategy, monitor the outcomes and adapt your offering to ensure the best results and remain competitive as an employer in your industry. A growing workforce, increased budget, new business goals or shifting job perk expectations are just some of the reasons why you might need to add to your flexible benefits package.
Manage flexible employee benefits with easy-to-use HR software
Whether you’ve already set up a flexible benefits scheme or are looking to implement one for the first time, having the right tools can save you time and money. From tracking which schemes are used frequently so you can optimise your budget to giving all employees easy self-service access to their benefits, HR software is an effective way to manage your flexible benefits package.
To find out more about how PeopleHR can support your employees and boost performance for your business, check out our free demo.
