Employers offer choice in employees’ benefits packages

More than 60% of employers offer some form of choice in the benefits that their employees receive, according to research by Mercer.

The research, which surveyed employers based in 12 European countries, found that respondents’ most important reasons for offering choice were to: remain competitive in the marketplace (58%); improve employee engagement (54%); and retain key talent (54%).

When asked about the challenges of setting up and running a flexible benefits scheme, 39% of respondents cited the complexity of administration and cost.

More than two-thirds (75%) of respondents reported that employee response to the flexible benefits scheme had been largely positive, while 62% said their scheme met their original objectives.

The majority (62%) said that economic challenges have not caused them to change their flexible benefits strategy and 13% said they are accelerating plans to add a greater degree of choice.

Most of the respondents that had implemented a flexible benefits scheme had found that it has either saved money (36%) or been cost neutral (46%). Only 4% said that their overall benefit costs have been significantly higher because of the implementation of flex.

Nearly a third (30%) of multinational respondents that do not currently have a global flexible benefits scheme said they are seriously considering implementing one. This has risen from 25% in 2009.

The number of multinational respondents that believe their organisation is not yet ready for a global flexible benefits scheme has fallen from 38% in 2009 to 20%. The organisations that have already implemented a flexible benefits scheme said that the main advantages are easier administration and reduced cost, as well as the alignment of benefits and governance.

Kim Honess, UK head of flexible benefits at Mercer, said: “In the past, employers have been concerned about introducing flexible benefits schemes and employee choice programmes because of administrative struggles, concern over ease of use and high cost.

“However, recent developments in technology have negated some of these worries, as internet portals and integrated platforms become more commonplace.

“Among respondents with a comprehensive flex scheme, 88% of employees are now enrolled using an online system. Not only do these technological advancements take the burden off administration, they are also extremely cost-effective.”

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