An Employee Benefits package can be much more than a fixed range of benefits.
A flex strategy, offering the choice of a wide variety of benefits from which staff can select, and the opportunity for them to mix the cash and benefits they receive, can meet the changing needs of the most diverse workforce.
Flexible benefits are usually offered in addition to core benefits. They can include such diverse options as private life assurance, medical and travel insurance, gym membership, the chance to buy and sell holiday, tax-efficient child care vouchers... and much more.
The potential advantages for employers include being able to adapt to a changing labour market, better targeting of benefits, increased employee engagement and enhancing the brand.
The advantages for employees include having a wider choice and the ability to tailor their own total reward package to suit their individual lifestyle.
Salary sacrifice, also known as salary exchange, can also be part and parcel of a flex scheme. Under this arrangement, an employee gives up part of his / her gross salary and in return the employer agrees to provide a benefit. For example, under a pension salary sacrifice scheme, the employee forgoes a proportion of pay and in return the employer makes an equivalent contribution to the pension. This means that the employee saves on income tax, and both employer and employee save on National Insurance contributions (NICs).
The employer then has the opportunity of either using the NIC savings to top up the employee’s pension or to help run the scheme.Third party online platforms, which dovetail with payroll and HR systems, are a popular means of easily integrating flex into an overall benefits scheme.