Flex isn’t dead, but it has been forced to evolve significantly.
The annual chore of selecting from a generic, chocolate box menu of mostly irrelevant or inconsequential choices, designed to save an organisation money and tick a project completion box for the HR function, does nothing to engage employees to perform highly nor differentiate employers from the competition.
Ask any employee: Total rewards? When my real pay has fallen by 12% since 2008? Joke. Also, finance directors are increasingly coming to question the return on the costs of flex.
But flex isn’t dead. Instead it is successfully re-emerging in a new, smarter format. Aon Hewitt’ latest Employee Benefits and Trends Survey 2014 confirms what the leading firms are doing with it and suggests that other employers need to follow suit. Just 29% of participants in our survey were planning changes, yet the new pension freedoms announced in the 2014 Budget alone point to the major improvements required.
New flex is built on a solid foundation of a decent base pay, and employer concern and responsibility for what happens to their aging employees, reflecting a genuine mutuality of shared interest.
It is data-driven and evidence-based, reflecting a detailed understanding of employee demographics, needs, health and attitudes.
Currently, fewer than a third of employers do anything in response to their employee engagement survey findings. Yet there are major opportunities in flex plans to address identified motivational issues, from allowing over-worked employees to buy more holiday to improving employee health and wellbeing with bikes-for-work schemes. These improvements in health and engagement are measured by the smart firms, showing a real return on the cost of the programme.
New flex is also attractive and well-communicated, phasing and segmenting the choices to suit different employee segments and needs.
According to our survey, current flex is least likely to have met their employers’ objective of ‘improving understanding of total rewards’, yet this was often the main reason it was introduced. Two-thirds of employers see communications as one of their top challenges. We are seeing a range of creative responses in the smart firms, ranging from the use of social media platforms to the return of face-to-face surgeries.
New flex is data-driven, better structured and focused and far more attractive and engaging: this is the only future for flex.
Duncan Brown is principal at Aon Hewitt