The number of benefits employers offer through flex is increasing, and childcare vouchers continue to top the table for popularity, says Tynan Barton
Offering a voluntary benefits plan or tax-efficient benefits through salary sacrifice arrangements remain the most popular precursors to introducing a flexible benefits scheme.In providing flex, employers must strike a balance between ensuring they offer sufficient choice without making it overwhelming.
The number of benefits offered through flex has remained constant over the past couple of years, with 11 to 15 being the most common number, offered by 35% of employers this year. In 2010, 37% offered this number, and 39% did so in 2011. More employers appear to recognise the importance of offering choice, with the proportion offering fewer than five flex benefits falling to 6% this year, compared with 10% in 2011 and 12% in 2008.
With speculation that NHS waiting lists for non-urgent treatment could grow beyond 18 weeks, employers appear to recognise that private medical insurance (PMI) can greatly reduce the amount of time an employee is away from the office. However, medical inflation is pushing up insurance premiums, which is reflected in the 51% of employers that have seen the cost of PMI increase over the past 12 months.
The same can be said for dental insurance, as stated by 50% of respondents that offer this perk through flex, because access to NHS dentistry can be challenging. However, only 15% of employers report a cost increase in hospital or health cash plans, through which dental benefits can be accessed.
The proportion of employers offering private medical insurance has fluctuated, rising to 87% this year from 83% in 2011, but down from 90% in 2010. This indicates employers’ recognition that although PMI is a costly perk, it can benefit both employees and organisations. Other benefits that address staff health and wellbeing are also increasing in popularity through flex, with critical illness insurance now offered by 78% of employers and health screening by 77%.
The benefits offered through flex have changed little in the past five years. Childcare vouchers have topped the table since 2008, reinforcing the view that flex can be crucial in supporting employees’ lifestyles. Back in 2002, however, the most common benefit offered through flex was a season ticket loan, a perk offered by 34% of respondents this year.
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