This is the Management Summary of a survey I conducted with B2E Solutions. If you want a copy of the full report in PDF you can email me at GirishMenezes@hotmail.com
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As we all know "flex" is back on the agenda of nearly every company of any size in the UK, a result which is borne out by many recent surveys. Wanting to analyse trends within the ‘largest UK private companies’ as a route to develop some guidelines or trends, we carried out research on a sample of the 250 largest companies in the U.K. We were surprised to find that over 40% of these organisations claim to have a fully implemented flexible benefits package in place.
Another interesting result of the survey was that over 90% of respondents who currently outsource some or part of their administration indicated that they were unhappy with their administrative arrangements and over 75% intend to change their administration arrangements over the next two years. Given this context, it is perhaps no surprise that 59% of our sample reported still using Excel spreadsheets to manage their benefits.
Interestingly 50% of the organisations surveyed would like to bring their administration in-house. A trend reflected in the fact that all of the organisations currently running their administration in-house (using software as opposed to excel sheets) are happy with their current administrative arrangements.
The survey we carried out personally approached the directors and managers with responsibility for HR and/or benefits within the participating companies. The data we have collected from these individuals give some unique insights into the experiences of some of our larger companies that seem to be leading to this result.
One clear conclusion is that simply adopting flex is not the path to better benefits management. The root of the dissatisfaction seems to lie in the administrative arrangements companies have in place to manage their benefits. As we all know, flex potentially increases the amount of administration, so an inadequate administrative system will be even less satisfactory with flex. Merely outsourcing this problem does not appear to help.
We explored the decisions behind choosing an administrative solution, but found this quite standard; reduction of errors, flexibility of the solution and service from the supplier.
Finally, it is interesting to note that organisations with live flexible benefit programmes cite employee retention, NI savings and the capping of rising benefit costs as the three key drivers of flexible benefits in their organisations. This is in contrast to schemes yet to take off who tend to focus on requirements like harmonisation, recruitment and retention.
This indicates, that at least for this sample of blue chip companies, the core requirement in successfully implemented schemes is for a flex benefits system which goes beyond simply being an attractive feature for active and potential employees to having the capability of being a powerful tool for other management objectives (like cost control).
The unavoidable conclusion seems to be that a successful flexible benefit programme requires three key features:
• A well thought out administrative system that reduces errors, is flexible around requirements and may be supported by a responsive supplier(s)
• A robust and flexible piece of technology that can enable this in a cost-effective manner
• A clear business case based around the harder factors dealing with cost savings and control
If our larger companies are the trend setters for the rest of us, perhaps some of these results will help us make decisions to avoid the pitfalls they have already experienced. As we all know, the supply of sophisticated flex software is improving and the cost structure for in-house and ASP offerings has significantly undercut the more traditional outsourcing arrangements. We have the options. Let’s go test!
The research was covered by Employee Benefits magazine here: http://www.employeebenefits.co.uk/item/799/pg_dtl_art_news/297/pg_ftr_art
And by Personnel Today magazine here: http://www.personneltoday.com/Articles/2005/11/22/32689/making-the-most-of-flexible-benefits.html
I'm always happy to link to new research in this area. Let me know if you have conducted anything of this nature.
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