Flexible benefits have been in the British workplace for more than a decade and the concept is widely understood: Rather than an employer stipulating precisely how a worker will be rewarded, employees have a degree of choice as to which benefits they receive.
Flexible benefits have long been in the domain of HR, typically being used to attract and retain staff. But new research from consultancy Hewitt Associates shows that chief executives and financial directors are becoming increasingly interested in the bottom-line advantages that flexible benefits schemes can offer.
The report, Flex Comes of Age, shows that more than 50 per cent of CEOs now take an active role in creating and implementing flexible benefits. And 50 per cent of the respondents claim their financial director is now involved in flex, compared with less than 20 per cent last year.
One of the major drivers for implementing flex has been to reduce the overall cost of employing individuals. Give an employee a benefit and you can reduce the amount of cash you pay them by a comparable amount. Reduce this figure and you reduce the amount of National Insurance you need to pay for that individual.
Some benefits are non-taxable - childcare, pensions, mobile phones and in-house sports facilities, for example. According to Phil Murray, leader of Hewitt Associates UK Flex Design Team, companies are now starting to quantify the softer benefits flex brings.
"We surveyed 190 organisations and found respondents attributed a reduction of 0.75 per cent in employee turnover to flex," says Murray, "This amounts to 36,000 per 1,000 employees."
Elsewhere in the report, 52 per cent of respondents credited improvements in employee commitment to their full flexible benefits scheme, while 67 per cent reported that flex schemes improved productivity.
However, for a flex plan to bring these kinds of improvements, says Murray, three ingredients must be in place.
First, the plan should take a 'total reward perspective'. This means telling employees the total monetary value of their package. Everything from pension contributions to bicycle schemes should be given a cash figure, so employees can see what they are getting.
At global asset management company Schroders, total reward statements are being introduced prior to implementing a full flex programme. The statements will offer greater clarity for each employee as to the value of their reward packa