At a time when many employers are cutting the cost of their benefits programmes, the voluntary approach makes sense.
One of the ironies of the current recession is that staff morale and productivity are likely to have slumped just at the time when employers need them to be at their peak.
Voluntary benefits – which provide staff with access to discounted products and services while keeping costs down for the employer – are one way for companies to address this issue, and are proving popular in the current climate.
“We have seen a marked increase in organisations wanting to find out more about voluntary benefits in the past few months,” says Mark Carman, marketing and sales director at benefits provider Motivano, adding that this year alone enquiries from new clients have increased by more than 30%.
One example of a company that has taken this approach is managed food service provider Aramark, which is rolling out a voluntary benefits programme through benefits specialist Personal Group. It claims this could save staff up to £1,000 a year through shopping vouchers, discounted days out and holidays, as well as offering financial advice.
“The feedback so far has been extremely positive in response to the wide variety of benefit options on offer,” says Ros Bowen, HR business partner at Aramark.
Most organisations these days turn to a third-party provider to manage such schemes, says Glenn Elliott, managing director at Asperity Employee Benefits, which has just reported its busiest ever quarter, setting up 30 new accounts. Many schemes are run online, allowing employers to brand the site.
“Employers need to make sure they appoint a provider that has a broad range of everyday discounts on shopping and high-street names,” he says.
“A good supplier will provide a website with secure registration and login, a telephone helpdesk that is open when your employees need it at weekends, a constantly refreshed offer set, and full online and offline employee communications.”
But companies will only get the maximum benefit out of such schemes if they communicate the benefits effectively to employees, says Richard Davies, head of employee benefits at P&MM.
“We’ve had experience of taking over voluntary benefits programmes to find that hardly any internal marketing had been implemented,” he says. “In such cases, we usually set about relaunching the whole programme using eye-catching brochures, posters, leaflets and videos.”
Martin Cooper, sales and marketing manager for Love2reward, says: “Use every available medium at your disposal to remind staff about the benefits available to them.” Love2reward launched its Everyday Benefits package in June as a direct response to the recession. “Build it into your induction process, use it as a recruitment tool, and feature it on the corporate intranet,” Cooper says.
Another way of promoting schemes is through reward statements – something used by Kwik-Fit Insurance in its range of flexible and voluntary benefits.
“We issue a total rewards statement each year, showing how much the flexible and voluntary benefits have added for staff,” says Elizabeth McVeigh, senior HR co-ordinator. “These are things that people really hold dear in the organisation.”
Companies should also have a means of measuring success against the criteria that prompted them to set up the scheme in the first place. “It isn’t necessarily about uptake,” says Aramark’s Bowen.
“It’s about the value that team members place on being offered the programme. We hope it is recognised that we are making a difference to everyday life, and we’re confident this will play an important role in recruitment and retention moving forward.”
TUI Travel has seen a 36% take-up among employees in the first three months since teaming up with Asperity to offer discounts on holidays. Asda and Sainsbury’s, which offer similar schemes, have had similar results.
“As well as looking at retention rates, we will also measure employee engagement through an annual all-employee survey, which has specific questions on reward and recognition,” says Dione Mathiaser, TUI Travel’s UK and Ireland rewards manager.
Case study: Kwik-Fit Insurance
Cutting-edge technology can make a big difference to running a voluntary benefits package that has traditionally been lacking the technical requirements.
Kwik-Fit Insurance, for example, found that its original benefits website was increasingly unable to cope as the company added more products, and it was only when the company started a tender process that it realised just how much the market had moved on.
“It was a learning curve for us to see that there’s technology and expertise there that could take this away from us,” says Elizabeth McVeigh, senior HR co-ordinator at Kwik-Fit Insurance, which eventually signed up with Motivano.
The advent of web-based systems means such challenges are now less of an issue, and a decent provider should be able to oversee implementation, says Glenn Elliott, managing director at Asperity Employee Benefits.
There are, though, other associated requirements. “One technical challenge we’ve had to overcome was the capacity of the payroll system used to manage the salary sacrifice benefits,” says Ros Bowen, HR business partner for business dining at Aramark. “It has been completely rebuilt, which delayed employees from using the benefits.”