Paul Brown: Automated processes help optimise flexible benefits

Automated processes help employers get the best value from flexible benefits.

It is commonly accepted that flexible benefits are a fantastic proposition for employees, offering an opportunity to increase holiday entitlement, reduce unwanted levels of life assurance or choose from a wide range of new benefits.

This choice gives employees a greater appreciation of their benefits plans, and the value of them, so the employer gains too. But with HR budgets under significant pressure, employers are looking to gain more from flex than just employee choice and perceived value.

Flex is now being used more and more in mergers and acquisitions to help consolidate multiple sets of employee terms and conditions or to reduce employer costs by introducing future benefit costsharing with employees. Also, many organisations are using the improved business processes facilitated by flexible benefits to increase their return on investment.

Additional administration

Flexible benefits require an additional layer of administration to manage the process of choice. Optimising that administration cuts out what
would previously have been a very manual process.

With an efficient benefits administration platform in place, reporting will be automated, most underwriting processes can be managed systematically and employee events such as new joiner enrolment and change requests can be dealt with electronically by the employee. This empowers employees to take ownership of their benefits, and deepen their understanding even further, while the reduction in manual effort by the HR team can outweigh the additional administration of choice. It could even lead to spare capacity that can be used more strategically for the business.

Automation

Automation can also assist legislative compliance. This can be as simple as calculating the childcare voucher basic earnings assessment or managing an HM Revenue and Customs-compliant life event process, or it can be a more complex process, such as managing P11D production.

Recent legislation has increased the procedural demands of managing a pension scheme. The reduction in the annual and lifetime allowances has caused high-earners to re-evaluate their pension arrangements and perhaps request a change in their benefit level at various times in the year.

Even more complex are the demands of auto-enrolment, which requires employers to communicate with staff and process their records in
prescribed ways.

Research

This year’s flexible benefits research shows that most organisations are, or expect to be, using their HR and payroll systems to carry out workforce categorisation for auto-enrolment. Many will then use their flex system to manage the enrolment process, and initiate any opt-out process or required changes in contribution levels.

This is a very efficient use of benefits technology, taking on what might otherwise be a manual and expensive exercise. Also, it is more intuitive for staff to manage their pension choices alongside their other benefit options.

The flex platform is increasingly being used as the employee portal, aggregating all reward data and providing links to benefits providers, employee
discount arrangements, share plans, recognition systems, and learning and development sites.

This portal approach is convenient for employees, and for the employer it drives traffic through the flex site, helping to realise the efficiencies of its
systemised benefits processes.

Paul Brown is head of flexible benefits consulting for Towers Watson