Implementing a modern employee benefits scheme

Flexible Benefits

Employers offering modern, sophisticated benefit plans are increasingly seen as progressive, employee focussed and gain significant competitive advantage but setting up and then managing this type of plan can be complex, expensive and result in increased administration. 

The proposition we offer our clients is to simplify all aspects of the setting up and running of sophisticated benefits packages, reducing complexity and administration issues at a fixed, known cost. This results in a faster implementation time, quicker payback and frees up the client’s HR professionals allowing them to focus on the more strategic aspects of human resources and provide better service to their employees.

We define Flexible Benefit Plans as formal arrangements where employees are provided with a range of employer funded benefits and/or a separate benefit spending allowance.  Employees then choose to swap core benefits or purchase benefits from a menu of options. Payments in excess of the employees spending allowance are collected via a gross salary adjustment, giving employees and the employer both tax and NI savings. 

We define Voluntary Benefit Plans as offering access to discounts or special terms available to employees and paid for by employees. 

Tax issues

The benefit environment in the UK can be complex and the tax implications of implementing a flexible benefit arrangement need to be carefully considered. However, a flexible benefit plan can deliver significant tax savings to both employers and employees.  Read our overview of the tax issues.

Employee communication

Making sure the change to a new flexible benefit environment is successfully communicated is key to getting the most value from the changes. Let us help you design and deliver an effective communication package that supports the changes and educates your employees, taking full advantage of the opportunity to improve understanding and appreciation. Our services include:

• Design and delivery of group presentations
• One-to-one information and advice sessions
• Provider open days
• Design and production of supporting literature

Designing a flex package

Getting the right benefit package to suit your company needs careful design and planning. Some benefits will remain, new benefits will be introduced and others modified. Choosing the right blend of benefits may involve consultation with your employees. Identifying the right providers and negotiating terms with them is also key to achieving the best outcome for you and your employees.

Design

Once the feasibility work has been completed, the outline shape of the plan should be known.  Designing the plan in detail requires a number of elements to be drawn together as follows:

Design and operation - Agreement of the flex allowance, core benefits and administration procedures including interface with benefit providers and, if applicable, advisers.

Benefit sourcing - Comprehensive review of benefits including the selection of new providers of benefits and negotiation of competitive terms and conditions.

Legal and tax guidance - We address the important areas of employment law and Inland Revenue tax treatment with specific reference to the implications of the plan design. We will also set out areas that will require further clarification and have tax experts on hand to provide professional guidance to your organisation.

Communication Strategy - We can support the design of a structured programme of communication from the initial decision to proceed until the launch date aimed at raising interest and awareness.

Specification - This document defines the plan in detail and sets out which existing benefits will be retained and which additional benefits to be provided.  It also covers the integration of existing staff and terms for new entrants, defining the plan rules, including eligibility and default benefits.

Flexible benefits is a term used to describe a wide range of benefit structures from static arrangements that offer a limited number of options to total compensation structures with fully outsourced administration. The design of a new benefit arrangement should reflect the objectives of the employer and take account of practical issues.

We believe that a consultative approach is the best way of achieving a successful outcome as the arrangement will be tailored to the circumstances of each client.  We maintain a pragmatic attitude to the solutions we provide which takes account of organisational culture and resources.

The completion of the plan design stage will result in an agreed specification and detailed implementation plan.

Impact on the Organisation

The introduction of a new process or system needs careful planning to avoid internal disruption. We take a structured approach to assessing the impact of implementing flexible benefits to your organisation that we describe as the feasibility stage.

The key objective of the feasibility stage is to assess the benefit environment and produce recommendations including an outline plan design, implementation and maintenance strategy. In doing this we focus is very much on education. Our aim is to bring all individuals involved in a decision and implementation up to the same level of understanding of the options, technicalities and practicalities of designing and running a flexible benefit plan. Our goal is to fully understand the overall environment affecting benefits at the client company and to provide our client with a good understanding of the key issues that will determine the effectiveness and success of the plan.

We carry out a number of assessments that make up the feasibility stage. These assessments seek to increase our client’s understanding of the implementation issues through education and address 4 key questions:
- Does it make business sense?
- Does it make financial sense?
- Will it have a positive impact on your employees?
- Do you have the (human and system) resources to implement it?

We offer a full feasibility report that provides answers to these questions at little or no cost.  We do this using a highly developed and structured process, including our online employer research tools. Our objective is to continue to drive down entry barriers wherever they exist and our approach to feasibility work removes one of the main hurdles to clients to understanding whether or not Flexible Benefits is the right thing for them. This service provides organisations with a much stronger understanding of what is often seen as a complex area. It helps organisations make their decisions in a structured way without committing significant amounts of money at an early stage.

Employee Communications

Communication is the most important key to success. No two communication strategies are the same as each client will be different. We offer a range of tailored communication services that include:

Employee presentations - useful for launch work, especially with multiple sites.

Provider open days - an effective way to allow larger groups of employees to find out about new benefits.

Employee training - one-to-one training helping employees learn how to enrol.

Employee surgeries - short individul meetings offering personal guidance and informatiom.

On-line training - a part of our employee support offering, we provide online training tutorials.  Our training solutions are provided at the launch of a new plan and on an ongoing basis for existing employees and new entrants to help employees understand the benefits package and enrolment process.

Employee Support

Our approach to employee support is based on providing relevant support to your employees. In our view, the implementation of a flexible benefit plan is not about installing a software system but about providing your employees with access to modern benefits and empowering them to make choices that reflect their individual needs.  Managing the business process to deliver the choices and process time sensitive data is important but must not be seen as the end of the task.  By providing employee support at the launch and on an ongoing basis, the effectiveness of your plan will be optimised.

We have described some of the options for employee communications at the plan launch and these can be carried internally or with our help, depending on your requirements and internal resources. In addition, we can provide the following ongoing services to your employees:

Employee financial support - we provide a financial "health" service through a partner organisation that specialises in providing financial guidance around relevant issues (debt management, budgeting, tax credits, etc.). Unlike traditional financial advice, this service provides support without focussing on product sales. If appropriate, financial advice can be sought by an employee.

Employee counselling - sometimes viewed as a peripheral issue, there are a range of employee support offering that provide a range of services from help lines through to access to counsellors. Delivering this kind of support as part of your wider employee offering can provide real benefits, backing up your position as a caring employer.  These services can also provide useful anonymous information about the type and frequency of employee issues.

Absence management - Another key area that can be used to support employees and avoid long term health related claims on insurances and possible legal issues is expert and independent absence support. Again, there a number of partners we work with to provide solutions.