How to integrate voluntary benefits into a reward strategy

The economic climate may be steadily improving but, with wages still under pressure, it is not hard to see why voluntary benefits are becoming an increasingly popular bolt-on for employers and a valuable perk for employees.


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  • Voluntary benefits are becoming an increasingly valuable bolt-on for employers and popular perk for staff.
  • Constant communication is vital.
  • It is important to understand employees’ needs and priorities and obtain regular feedback.

Back in May, Capita Employee Benefits’ Employee Insight Research argued that although, by and large, employees do feel better off than they did a year ago, making ends meet each month is still a struggle for many.

The majority (81%) admitted they were actively looking for ways to save money, with the ability to buy discounted technology products, subsidised gym membership and retail vouchers all considered of real value. And all these are popular in the voluntary benefits mix.

Generate employee engagement

Employers also like voluntary benefits because they can help to generate employee loyalty and engagement in an increasingly competitive jobs market without needing to throw a lot of cash around.

Mike Morgan, chief executive of provider People Value, says: “For the past few years, employees have simply been grateful for their jobs and fearful about moving. We are now seeing people starting to feel more confident and more prepared to look at other employers to improve their package. So, increasingly, it is about focusing on employee wellbeing through voluntary benefits.”

The challenge for any employer looking to introduce voluntary benefits is to maximise take-up and engagement. Ideally, employers will also want voluntary benefits to help generate staff interest in, and engagement with, their core and flexible benefits.

Iain McMath, chief executive at Sodexo Motivation Solutions, says: “How the scheme is communicated is the key. A lot of employees do not understand the benefits they have, so clear communication is vital, as is getting feedback about what is important to them.

“We see a lot of organisations that just dump benefits on their employees and then wonder why they are not getting the take-up. It’s about dialogue. Rather than piling benefits together, it is about really understanding what drives employee behaviour. Don’t rush into it.”

Voluntary benefits used more often

James Malia, managing director at provider P&MM Employee Benefits, says one of the advantages of voluntary benefits is that employees are likely to use them more often, particular if they are available through an online portal.

“But employees still have to know they’re there,” he says. “Employers can introduce the most amazing package, but if the employer does not communicate it, then it is a complete waste.

“You need as broad a suite of benefits as you can, but it is also about keeping the administration side as simple as possible.”

McMath’s point about understanding what drives employee behaviour is also important here. He cites the example of Sodexo’s new Money Boost benefit. Rather than simply offering retail discounts, the perk is designed to help staff save money from their salary towards a long-term goal while giving them an extra 5% to spend at various locations through a Money Boost Card, says McMath.

Much broader proposition

Voluntary benefits providers are also recognising the value of offering things that complement an employer’s wider benefits package. Perks could be as diverse as educational tools unrelated to work, such as help with learning a language or finding a local tutor, free access to the employee’s credit score, streamed fitness videos or diet advice.

“It is about trying to make it a much broader proposition, one focused on making the individual feel valued,” says Morgan, citing People Value’s Advantage6 product, which includes fuel and lifestyle discounts, recycling tools, wellbeing resources and a set-up ’wizard’ designed to define an employee’s shopping preferences right from the start.

“Too many employers put in a voluntary benefits package, tick the box and then move on,” says Morgan. “But it has to be a journey, and it has to have buy-in at a very senior level. It is not just something you launch, it is a constant process. So it is about getting the message out there, refreshing it and supporting it over the whole lifetime of the contract.”

Case study: North Yorkshire County Council

North Yorkshire County Council

Last December, North Yorkshire County Council relaunched its Everybody Benefits salary sacrifice-based platform, introducing a range of voluntary benefits.

The platform offers lifestyle discounts, childcare vouchers, a bikes-for-work scheme, eco-friendly cars and now includes home technology, such as tablets, laptops and smart TVs.

The benefits, accessed through a bespoke portal, come from a range of providers, including Computershare Voucher Services for the childcare vouchers, Cyclescheme for the bikes-for-work scheme, Tusker for the car scheme and Xexec for the lifestyle benefits.

Most of the benefits are available to all the council’s 19,000 staff, although the car and home technology schemes are restricted to non-teaching staff, says Sarah France-Gorton, principal adviser, resourcing and reward, at the council.

The benefits are also available for other public sector organisations to access via a framework agreement, avoiding the need for procurement exercises and increasing savings.

The council made an effort to generate, and sustain, employee interest pre- and post-launch and to align the new perks within its existing offering.

The existing platform was already popular with staff, but France-Gorton says it was still important to proactively promote the new-look package.

“All the benefits were re-procured, so we aimed to make the transition to the new providers as seamless as possible by communicating to staff through intranet news articles, weekly employee key messages, targeted emails to staff and holding employee benefits fairs where staff could come along, meet the providers and find out more,” she says.

“We already offered a number of discounts for goods and services from local suppliers and retailers; these were given higher prominence on the new platform.”

The result has been increased staff engagement with the benefits and a boost in take-up.

“Since the relaunch, the number of employees enrolled in childcare vouchers and green cars has been maintained,” says France-Gorton. “There are over 600 employees registered for childcare vouchers and 265 currently have a green car. We are now approaching our 500th new car delivery.”

The home technology scheme has generated “an overwhelming response”, says France-Gorton, with 200 orders for computers, laptops and tablets taken during the first order window in May.

“We have continued to see interest in the Everybody Benefits platform and all other salary sacrifice schemes, and staff have fed back that they value the opportunity to have access to the schemes and discounts on the platform,” she adds.

“We recommend consulting with staff at the outset to ensure the schemes will meet their expectations. In addition, regular communications are vital to raise awareness of the benefits, and ensure the scheme is integrated into the organisation.”