Debi O’Donovan, editorial director of Employee Benefits: Have we lost the art of innovation for benefits strategies?

UK benefits strategies appear to have hit a quagmire. Several leading benefits professionals, both on employer and consultant side, have told me in recent months that they no longer see the innovation and thought leadership that used to exist in this industry. Several have left their jobs for exactly this reason in an effort to find more challenging work.
Ten years ago, when I started on Employee Benefits magazine, if employers wanted to implement cutting edge benefit strategies they went to consultants who did thorough research into the employer, its workforce, business objectives and so on, then designed a bespoke scheme tailored to that particular company.
The upshot was that a very small group of large employers lead the market in benefits innovation and many others aspired to be like them. These organisations took the risks of trying new ideas and if they won, became employers of choice.
However, this was an expensive process to go through and most employers could not afford to do it. And in reality, the vast majority were not at all interested in getting into that level of sophistication.
So this majority were more than happy when products such as online admin systems (be they for flexible, voluntary or traditional benefits delivery) and contract-based pensions were developed. These could be bought off-the-shelf at affordable prices and implemented with, at most, minor adjustments.
Suddenly complex benefits strategies appeared to have became simple administration processes or merely commodities.
Some would argue, this is exactly right and is as much as HR departments can cope with – they have too much else to worry about, to spend much time on benefits.
But others feel this has led to a levelling of reward strategies among all employers. That we are ending up on a plateau of affordable mediocrity and, oddly, everyone trying to be an ‘employer of choice’.
My own view is, that the commoditisation of benefits has generally been good for employers and employees. It has allowed more employers to offer benefits to more staff. It hasn’t stalled the market, it has on balance, expanded it.
Innovation and thought leadership is important, but 99% of employers simply need good straightforward advice on basic benefits products that are right for their workforces.
But those who are looking for a challenge, I am sure the coming recession will create many opportunities to rethink reward.