Time flexibility is a future trend for flexible benefits, according to new research by Hewitt Associates.
Its report, Flexible benefits in the UK: a compelling solution, found that in terms of longer-term development, 51% of the participants suggested time flexibility was likely to be integrated with flexible benefits.
Martha How, head of reward consulting at Hewitt Associates, said: “This may mean organisations move beyond simply buying or selling holidays, although the ability to offer real flexibility will be determined by operating constraints.
“Models we have discussed with clients include working a nine-day fortnight, formalising a late-start/late-finish model, or even an annual hours model.”
She explained these kinds of models are unlikely to be built into traditional flex schemes. “It may be organisations need to work in a different paradigm, and start to think about true flexibility in what they can offer employees. The systems which support flexible benefits now may perhaps be extended to cope with this new dimension in the future.”
Flexible benefits is established
The research also found 43% of the 120 respondents either have, or are actively considering, flexible benefits. This is up from 17% in 2003. “Flex is now well established, mature and prevalent in the market place,” said How.
Cost savings are the the number one driver behind flex in 2009. “This is what we have thought for some years but prior years survey results suggested the wider HR agenda such as attraction, retention and engagement were primary,” she added.
Career development in flexible benefits
A new development has been the recognition of learning opportunities and development funds as ‘benefits’. “Although not yet in the ‘top ten’ [benefits offered] they are beginning to appear in our results, which ties in with the findings of research by Employee Benefits magazine earlier this year, where the majority of employers surveyed felt these were a core benefit,” said How.
Salary sacrifice
The biggest increase in benefits offered through flex from 2007-08 to 2009 was in pension contributions provided through salary sacrifice.
This is now offered by 65% of organisations with flex schemes in our survey – an increase from the 2% who offered this (within flex) in 2007-08. How explained: “It is a bit of an odd one as so many people had pensions salary sacrifice standalone and have now brought it into flex, so it is not a growth in pensions salary sacrifice just a growth in framing it within a wider flex offering.”
Wealth management
The research found there had not been the development in wealth management plans that Hewitt Associates predicted in 2007-09. Savings vehicles and financial advice services remain little understood and little used, with less than 10% of organisations taking up these benefits. Some participants were found to have removed financial advice from their flexible benefits plans.
“While this is undoubtedly a big issue, actual take-up is small. There is a need for more robust thinking in the area and for employers to become confident with what is offered to employees in this arena. [Also] crucially, how it is communicated and explained to employees with widely differing personal financial circumstances and financial literacy.”
Childcare vouchers
The most commonly offered benefits within flexible benefits schemes is childcare vouchers, offered by nearly all the respondents. “The significance of childcare vouchers is massive: it’s the number one benefit. We predicted it was threatened by the maternity leave regulations but now it is even more under threat by Gordon Brown [with his plan to remove the tax and national insurance breaks from 2011],” said How.
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