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• Introducing multiple enrolment windows keeps a flexible benefits scheme fresh and engages the interest of employees in key benefits at specific times of the year.
• An emerging trend is towards ‘anytime benefits’, which are offered through flex ona monthly basis by some providers.
• An effective communication strategy will raise awareness of the extra opportunities to choose benefits, drive employee take-up and, ultimately, improve the cost-effectiveness of a flex scheme.
Case study: CSC switches on second opportunity for flex enrolment
The provision of additional enrolment periods in its flexible benefits scheme has played a key role in raising awareness about pensions and increasing employee engagement for CSC, a global provider of technology-enabled solutions and services.
The scheme year of the organisation, which employs about 7,500 people in the UK, runs from January to December. It has its main annual election window in November, when employees can choose from a wide range of benefits, including health and lifestyle perks.
A second opportunity for employees to enrol becomes available in March, with choices taking effect in April, but this focuses only on financial benefits, such as pensions.
Donna Nind, head of compensation and benefits, UK and Ireland, at CSC, says: “During the main annual enrolment period, people have a lot to think about in terms of what they will need, for example holidays, insurance and lifestyle benefits, and they may not give their pension choices as much thought as they could at that time. Having a second window, which effectively isolates pensions and other financial benefits, encourages people to focus on what is a key benefit for their personal financial planning.”
An additional mid-year enrolment window also offers a second chance to buy extra holiday, rather than staff having to make their choice at the main annual election period.
Providing this second opportunity in the middle of the year has made holiday purchase one of CSC’s most popular flexible benefits choices.
Having more than one enrolment window a year can keep flexible benefis fresh and boost employee engagement with the scheme, says Alison Coleman
Flexible benefits schemes may have been slower to take off than the HR and reward industry first predicted, but employers that have implemented flex are finding schemes an effective and popular way of engaging and rewarding staff.
Building on the flexibility and choice on which the concept was based, many employers have become more creative in the way they provide flex, offering an increasingly wide range of benefits and additional opportunities for employees to access these outside the scheme’s main annual enrolment window.
Richard Morgan, director of consultancy services at Vebnet, says: “We are seeing a shift away from the single election window towards a more flexible approach that is more accommodating of life events, such as marriage or the birth of a child. Employers see this as a way of leveraging better value from their flex investment. With a single window, there are 11 months of the year when the scheme is being ignored, and opportunities are being missed.
Multiple enrolment windows enliven reward and benefits schemes by encouraging staff to use them more frequently.”
But there are practicalities to consider, including the administrative demands of operating more than one flex enrolment window a year, and the fact that not all benefits are suitable for multiple enrolment.
Manesh Patel, senior flex consultant at Lorica Consulting, says: “Generally, this is something that is kept to non-insured benefits, the reason being that the providers of some insured benefits are restricted by annual rates, which makes it difficult to offer them flexibly. However, things like childcare vouchers and, in more recent times, cars and computers, offered via salary sacrifice, lend themselves very well to more than one enrolment window within a flex scheme.”
Company pension schemes, offered through salary sacrifice arrangements, have also become easier to offer more flexibly, following confirmation by HM Revenue and Customs (HMRC) that salary sacrifice pension schemes will meet the requirements of auto-enrolment, which begins from next month.
HMRC has now added pension contributions to the list of salary sacrifice schemes that enable an employee to opt out at any time. This list also includes bikes for work, childcare vouchers and workplace parking schemes.
So, what is the right number of enrolment windows to offer employees through flex? Bikes-for-work schemes have a seasonal appeal and are typically launched two or three times a year, while car leasing can be made available virtually all year round. Mobile phones can also be offered more frequently because they are tied to contracts that terminate at various times of the year and are not necessarily aligned with an employer’s annual flex window.
Benefex offers ‘anytime’ benefits as part of its core service, enabling employees to make changes to their benefits offering each month as they see fit, subject to legal and tax obligations.
But there are pros and cons to consider with such approaches to flex, particularly when it comes to communication.
Benefex chief executive Matt Waller says: “Additional choice and flexibility for employees will lead to increased engagement when they look to make additional or more frequent choices at points that are relevant to them and not just the scheme, or they have the option of selecting and joining benefits when they see fit, rather than be driven by the fixed enrolment window.
“On the other hand, multiple enrolment windows can mean that employees are less focused on making choices at one point in the year, so the communications budget either needs to increase or be spread over the year, which may not create as high an impact as required.”
Waller says processing enrolments each month adds complexity, and not all flexible benefits providers have the technology to support it. But, on the whole, multiple enrolment windows evolve flex to its original strategic vision of providing maximum flexibility.
Julia Turney, head of employee benefits management at Jelf Employee Benefits, warns employers not to offer multiple enrolment points for popular benefits if they do not tell their employees what perks are available and when. “Communication strategies have to be effective without bombarding people with too much information,” she says.
For any organisation looking to increase benefits choice and flexibility, communications need to be continuous throughout the year and built into the recruitment process to ensure everyone understands what they can do and when.
Benefex’s Waller adds: “Increasingly, we are seeing those organisations with flex schemes that have been established for five years or more looking at how to increase the flexibility and choice available to employees.
“Where the concept of flex is embedded in this way, care needs to be taken to ensure that employees understand what is different, what it gives them, and when and how to make choices.”
Employers also need to consider the administration costs of offering multiple enrolment windows, which will vary depending on employee headcount, scheme complexity and benefit providers’ service-level agreements.
Read more from the flexible benefits supplement