Outbox – Guest Opinion

Should you offer an enhanced benefit package for your employees or should you move to a cash-only option? The change in demographics, technological advances, growth in flexible working styles and the increase in knowledge workers all mean new employment relationships, such as ‘portfolio careers’ or multiple employers for staff. These, together with a move to payment for deliverables rather than time, have led to suggestions that cash will be the only important benefit. The move to cash simplifies global management, reduces administration and supplier management costs but encourages the commoditisation of employment. From an employee perspective, this ‘all-cash’ approach may well be attractive to some. This is illustrated by the switch to contracting, which was seen in the IT industry in the run up to Y2K. However, for many, this was short-lived and many employers returned to traditional employment models when times became harder. Additionally, many organisations that cannot justify employing expensive specialised skills will welcome the advantages of cash-only ‘portfolio careers’ by not carrying long-term overheads that cannot be 100% utilised. But organisations keen to attract, develop and retain skills will look for ways of differentiating themselves, and those that wish to develop a strong employment brand may not find the cash-only option attractive. A benefits offering that is creatively designed to meet the lifestyle needs of staff and their families is one approach that can help organisations to differentiate themselves in the competitive employment marketplace. The use of bulk buying power, tax breaks and benefits that are only available to larger organisations enable employers to offer benefits of a higher perceived value than the cash equivalent. But flexible benefits schemes must replace the one-size-fits-all approach so that each option is valued by the employee. Additionally, benefits such as nurseries, health programmes and holiday clubs can help to create communities around the workplace, and also develop an affinity between the employer and an employee’s whole family. Using benefits, such as childcare, to reduce the barriers to employment can enable an employer to appeal to a broader cross-section of the appropriate labour pool than perhaps a cash-only organisation could. Employers that offer benefits need to ensure that staff understand the full value of the offering. If their overall package is not seen to hold sufficient perceived value they will still lose out to the commoditised employer and may lose the value of the training and expertise invested. Ultimately, where you decide your organisation will be on the cash/benefits continuum will depend upon the culture, skills and labour pool appropriate to your organisation. Cash-only may appear attractive on the surface, but may prove costly.