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Flexible benefits

Flexible benefits advice

Providing a comprehensive rewards package is a key objective for employers as they seek to recruit the best talent around and retain their best individuals. Non-financial benefits are taking on a greater position of importance, so organisations need to keep abreast of the requirements of their staff and adapt their approach accordingly.


According to research carried out by Innecto Reward Consulting, more than 60% of HR managers felt that their current schemes did not motivate their staff.

Need for creativity

“Companies have to be creative – for example, training is becoming more and more of a key benefit,” says Heidi Waddington, former national director of Hays Human Resources.

Historically, benefits programmes were hierarchical: holiday entitlement and pension provision typically increased with seniority and length of service. The logic behind this was one of homogeneous simplicity; these benefits could be easily understood and rolled out by multinational organisations in all their countries. This concept is now being superseded by a benefits model that gives employees a greater say in determining their preferred trade-off between salary, core and more flexible benefits.

Empowering the employee

The result is that the employee can, for example, decide whether or not to sacrifice a part of their salary in return for an increased portion of the flexible benefits. Similarly, they can opt for a greater slice of the salary pie and reduce their other benefits. By far the greatest advantage for the employee is that, irrespective of length of service, he or she can tailor their preferences to suit.

For example, a graduate might prefer to have a reduced level of benefits in return for a greater salary (perhaps to clear their student debt) while another employee might prefer more annual leave to suit their family circumstances. In both scenarios, the total level of reward remains the same.

Total rewards: the benefits

Some of the advantages of adopting a total rewards package include:

• Employee preferences are taken into account

• Choice of extrinsic (salary, leave) and intrinsic benefits (work environment)

• Positive link between reward and commitment

• Positive impact on attrition rates

• Potential financial savings for employee and employer

Feedback and communication

The key to making an organisation more attractive to employees is to have an in-depth understanding of the workforce and demographics. “People are only too willing to tell you about bonus schemes and what they feel is working or not,” asserts Deborah Rees of Innecto Reward Consulting.

To this end, employers have a range of tools at their disposal, from corporate websites and intranets through to a whole range of in-house literature and external advertising.

The key to making it all work is ensuring that the message is clearly delivered. “I cannot emphasise enough the need to communicate your rewards package,” stresses Mark Burch, former Head of Reward and Performance at the Crown Prosecution Service (CPS).

Get in touch with your local HR recruiting expert to discuss the impact of your benefits packages on recruitment and retention.