Marketing experts tend to agree that selling is often about the sizzle and not the sausage. Flex is no different, so get staff excited, says Jamin Robertson
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Case Study: Britvic
Chat to a benefits manager for just a few minutes and it is clear introducing a flexible benefits scheme is one heck of a challenge. But with it there can come a sense of pride at being responsible for a package that delivers the perks employees want – provided you create enough of a stir about it so that employees can get excited.
And it is not only current staff you need to inspire, future recruits are a prime target too. Dr Jason Heyes, reader in HR management at the Birmingham Business School, University of Birmingham, notes employers are using flexible options to differentiate the job offer. "Certainly in higher level [jobs] employers are willing to adapt to recruit and retain [top] staff. They’re looking at flexible [options] in terms of the current legislative and political agenda, but also in terms of self interest."
But before benefits managers turn to marketing, it is worth double-checking exactly how gripping the scheme is that you have on offer. The first thing to investigate is its design. Paul Farrell, business development manager for flexible benefits at Aon Consulting, has seen his fair share of schemes both good and bad, and can spot a stinker at fifty paces. "The worst I’ve seen allowed people to buy one extra day’s holiday every 12 months. The design [of a flex scheme] has to be brave and meaningful. That means [including] significant annual leave, of between 20 and 90 days a year. There’s a lot of talk about communication, but if it’s fantastic and [then] people look at the choices and find them limited, that’s a whole lot of noise for something that is essentially rubbish. Put some real flesh on the bones, make it substantial."
His point about holiday trading is well-founded. According to Employee Benefits/Towers Perrin flexible benefits research 2005, it is the most common benefit offered through flex – provided by 84% of respondents. This option was the key attraction for staff during the BBC’s successful flex campaign, and also drove staff demand at Chrysalis. Richard Morgan, senior consultant at Watson Wyatt, says: "You can end up with a very dry flex plan, with the word insurance at the end of every benefit. The ability to buy and sell holidays is one of the most attractive options."
This certainly does not mean that insurance is a no-no. In today’s job market with skilled employees changing jobs regularly, there is a concern people may overlook the basics such as insurance.
"[Employers] don’t know whether you are here for one year, five years or 25 years. [Flex] allows [staff] to make varying annual choices and there must be [opportunities to invest in] pensions as well as building blocks for career and lifestyle [options]," says Farrell.
Employers may decide to keep core benefits outside flex, in order to ensure a minimum level of protection. Chrysalis decided to keep its life assurance policy outside flex after enduring a moral dilemma over the issue and finding its underwriter unwilling to support flexing the benefit.
There is plenty of confusion in the market currently about what flexible benefits means. To some it is individual benefits that are flexible, for others it is voluntary benefits offered through salary sacrifice. Traditionalists state that a true flexible benefits scheme comprises a formal plan run for a set contract period where staff can choose among employer-paid benefits, typically from a set flex allowance provided as part of the remuneration package. Using this latter definition, April’s Employee Benefits/Towers Perrin flexible benefits research 2005 revealed 23% of employers offer a flexible benefits scheme, with 9% in the process of bringing one on-board and 33% considering doing so.
It is important that flex should appeal to all: "Highlight the cash, the sterling advantage to employees. [Many employers opt] for points systems to help workers evaluate flex options, and avoid the filthy mention of money. It’s realistic to talk about it. Tell them about the cash, talk about the deals they can do. This is particularly true in the UK where people flock to car boot sales and go to warehouses in order to save 5p," says Farrell.
This is true for lower wage earners too. Paul Osgood, head of communications at Hewitt Associates, says: "You’ve got to understand the value. Look at retail vouchers. Think about the way you can design them. [Giving] lower paid employees more discounts is like giving them a pay rise. [Use briefings to] help them to see that it might be [equivalent to] a 1% or 2% pay rise."
A key way to drive this home is to use total reward statements (TRS) to help underscore the true value of the flex scheme. This message is made even clearer when employers make use of IT.
Financial group Deutsche Bank uses an online modeller so staff can chart future pension and share scheme entitlements. "There’s much more segmentation of the audience [currently], and it’s often very easy to use data to do it. [Online tools used to demonstrate] personal choices are becoming the norm," says Osgood.
With web-based providers clamouring for market share, using flex technology is certainly not as prohibitive as it used to be. "Over 50% of people have access to the internet at home. It’s [an easy way to] communicate, and the web enables you to segment your communications cheaply. You can sell your flex plan to different parts of the business," adds Watson Wyatt’s Morgan.
Encouraging early staff buy-in to flex is key to its success. Staff seminars will identify their wants and needs. Jim Aitken, marketing director at Chase de Vere Employee Benefits, says: "[There] needs [to be] a long programme of regular communication leading up to the launch of the scheme. You might not offer all [the benefits requested but at least] make sure you’re on the right track."
This view is supported by Adrian Glew, managing director of flex provider Personal Management Solutions: "Don’t do too much too quickly. Some companies say ‘oh my God, our competitor’s got flex!’ [But] they might only need a better understanding of the benefits they have got."
Sexy benefits such as the opportunity to buy or sell holiday, pick up a cheap iPod, or sign on to a wine deal are useful as headline grabbers. "The general population think benefits are for when you die, retire, or your leg drops off. They will buy the boring bits, but they won’t do so unless you have the hooks," says Glew.
Media firm Chrysalis used those hooks after managers asked staff to rank existing benefits and add in those they wanted, with holiday trading spearheading the list. The company kept staff in the loop with a monthly update, held focus groups at satellite locations and added PDF and email information to the mix. Craig Warden, HR director says: "You can never make a big enough deal of it. You’ve got to talk in the language your people understand, and there’s got to be things in there that people want."
And who better to understand the language your staff talk, than themselves. Some employers take staff engagement further by enlisting them as scheme representatives, or "flexperts". Emma Stephens, employee communications manager at soft drink manufacturer Britvic, says her staff were "absolutely fundamental" during the company’s successful launch of its flexible benefits scheme. Hewitt Associates’ Osgood is also a firm believer. "What we try to do is engage people whose work is greater than average [to be involved]. People look up to them and are more interested in looking a bit further [at flex]."
But there are some pitfalls to be aware of. Megan Dare, communications consultant at Towers Perrin, warns: "It’s tricky. You have to be very rigorous, with tax and legal considerations [to make sure] that they know what they’re talking about."
One way to overcome this is to use independent financial advisers (IFAs). They can supply expert backup and regulated financial advice for flexible benefits communications. But some employers steer clear of facilitating financial advice. "They can be useful if they’re fee-based, and reputable. But there is an implicit endorsement. If it’s crap advice the employee will always remember the employer sent them there, and go to them and say ‘Look, I’m pissed off.’," says Aon’s Farrell.
This may be why using IFAs is still relatively rare. "In theory, they are useful. But, in practice, very few employers [use IFAs when setting up flex, because they] can be quite expensive," says Watson Wyatt’s Morgan.
What works better for many organisations where union loyalty is high, is enlisting the support of trade unions. Members may feel reassured about their benefits if they can see their unions advocating flex.
Another great way to generate interest is through provider roadshows. "Get flex providers to come and set up a stall, so people can come and look at the products. It’s free, and employees think it’s great," says Dare.
And why not turn it on by using some consumer-savvy nous on staff? "Companies that have done it well have included a scheme logo and name. Corporate communications make [flex] stand out," adds Dare. Britvic labelled its flex scheme My Choice and sent user-friendly booklets to workers’ homes. And in addition to those flexperts, the company made online information available. It was easy to digest and rewarded with a take-up rate in excess of 90%.
"Communicate effectively. It’s a very boring message but one that’s absolutely true. Make the website fun and sexy, and make it more visual than text driven. A bit of fun and humour also goes a long way to getting the message across," adds Farrell.
But a final warning before you roll out the spin doctors: "Avoid the urge to overspend [on promotion]. Flex is a no brainer, it’s a really good tool. It doesn’t need to be oversold, that just creates suspicion," says Dare.
Get it right and staff will soon come to appreciate the greater choice for themselves. "I went on the British Lions (rugby) tour to Australia for 60 days. What a flex facility. Two of my friends resigned from their jobs to go on that tour. I didn’t go begging, I elected it," explains Farrell.
How to create a stir around flex
Use a range of communication methods: A well-designed brochure, staff seminars, and intranet space are common methods of communication used by employers with successful flex schemes. Material should be image-based rather than text heavy, to set it apart from heavy policy and procedure documents. Seminars, CD-Roms, question and answer sessions, case studies, computer modelling, and telephone helplines all help to sell flex. Communication is key.
Enlist staff: Ask staff what they want to see in the flex scheme, and remove unwanted benefits. Employers with some of the best flexible benefits schemes used good staff rather than providers as flex spokespeople. Flexible benefits schemes won’t take off unless there is something for everyone.
Identify core benefits: Employers should consider offering a mandatory level of core benefits for holiday entitlements and insurance benefits to ensure a minimum level of protection for staff.
Make it clear: Introducing a flexible benefits scheme is a big enough change without baffling staff with a sea of options. Offer enough benefits to appeal but do not overdo it and make communication easy to understand or people will stick to what they know.
Keep it fresh: Make the flex offer truly exciting, by offering real choice. Regular fine-tuning will allow flex to flourish. Consultation with staff leading up to the annual review will ensure flex does not perish.
Use technology: Many consultants emphasise the importance of flex modelling facilities. If staff can plot their benefit entitlements they will see the value. The intranet is an obvious vehicle.
Hold a roadshow: There’s nothing like face-to-face communication, and providers are only too happy to show off the products on offer. Employees able to try before they buy are a lot more likely to sign on.
Case study: Britvic
Soft drinks manufacturer Britvic introduced its flexible benefits package My Choice two years ago with a take-up rate of 93%. Emma Stephens, employee communications manager at the company, says: " We have got 3,200 staff, with 15 depots, seven factories and three head offices. As a manufacturer, over half our workforce don’t have access to computers, so it was a logistical challenge."
As part of the scheme’s introduction, consultants trained Britvic staff as "My Choice Champions".
Ordinary-salaried company staff were trained in the nitty gritty of the scheme and, as trusted workmates, passed that information on to colleagues.
"They were absolutely fundamental. There were roughly 80 champions across the business, and this year we had a revamped question and answer [facility] to go over [childcare] changes," she adds.
By appointing those champions, Britvic ensured workers could turn to an advocate 24 hours a day, with spokespeople working on all production shifts.