Management Advice Blog - Introducing Flexible Benefits

Published: 16 April 2014

Flexible benefits schemes are structured systems that allow employees to choose the benefits that suit their particular circumstances from a selection provided by their employer. Organisations have introduced such systems as part of a wider move to more flexible working and in recognition that employees have differing wishes and needs at different stages of their life.

Many employees do not fully recognise the total worth of the benefits their employer provides and the move to a flexible benefits scheme is one way to highlight the totality of the remuneration package. This may have benefits to the employer through increased employee retention and reduced recruitment costs.

Some of the reported advantages of introducing flexible benefits include:

  •        giving staff a sense of control
  •        enabling dual career couples to choose complementary benefits and avoid duplication
  •        employers are seen as recognising the diverse needs and different life-stages of their employees
  •       the provision of benefits becomes less contentious
  •       employees appreciate the true worth of the benefits package
  •       improving staff retention and helping to attracting new talent.

This checklist explains the key steps in defining a strategy and in implementing a flexible benefits scheme. In addition, you are advised to seek advice on the tax implications for both the organisation and the individual.

A flexible benefits scheme (also known as cafeteria benefits) is a structured arrangement of cash and benefits that offers choices to employees which enable them to meet their personal needs. Schemes typically include a core package of pay, holiday and pension, with additional flexible options to a value designated by the scheme. The more comprehensive schemes may also include voluntary benefits, which are purchased and paid for by employees. Flexible benefits are usually funded by the organisation, and therefore any organisation wishing to introduce them will need to think carefully about the financial viability of introducing them.

Action checklist

1. Define the strategy

Before starting to develop your strategy for flexible benefits it is important to question whether your organisation needs such an approach. Planning and implementing a full flexible benefits scheme requires the input of time and money, so it is important to be clear on your reasons for going down this route, especially in times of uncertainty or austerity.

Consider the following:

  •       What is the market offering for the industry you work in?
  •       Make sure that you fully understand the context of your existing reward strategy. Does a flexible benefits scheme provide a good fit?
  •       What is the motivational and financial value of your existing reward package?
  •       What do you hope to gain by implementing a flexible scheme?
  •       Have you asked your employees what they like and dislike about your existing approach?
  •       Could you use a focus group or staff survey to investigate this area?

You might determine that simple changes to your existing package of benefits will meet your objectives. For example, would allowing employees to buy and sell holidays, make additional payments into their pension scheme, and use salary sacrifice to buy childcare vouchers provide a simpler route to improving staff perceptions of your benefits package? Would the provision of an annual total rewards statement raise staff awareness of the value of existing benefits to them?

If you decide that a flexible scheme provides a good strategic fit, make sure you allow plenty of time to research, plan, implement and communicate with employees.

2. Decide on the form of benefits package

There are a number of key issues you need to address. You need to determine:

  •        whether you will design the scheme in-house or use a consultant
  •        your policy for providing core benefits
  •        your mix of core and flexible benefits
  •        how you plan to administer the scheme
  •        how employees will select or purchase benefits
  •        the benefits that are on the menu
  •        the enrolment process
  •        the enrolment period for existing employees and for new recruits
  •        how you will promote the scheme to employees
  •        how you will evaluate the success of the scheme.

3. Designing and administering the scheme

You can either design and administer the scheme in-house or outsource the process to a specialist company. You may decide on a hybrid approach whereby you use a consultant to help design the scheme, but administer it in-house using your own staff.

The in-house approach requires the allocation of staff time and budget. Also, as most organisations now adopt web-based administration solutions, you need to consider whether you have the technical ability to develop your own scheme or will be using one of the many existing programmes. Realistically, the latter may only be an option for very small and simple schemes. Many of the computerised systems that are used for administering such schemes include an option that allows employees to model their own choices, which can simplify the process.

You may decide to use a consultant to identify appropriate benefits suppliers. One advantage of this is that they should already have contact with many suppliers and may be better placed to negotiate discounts.

There are a number of consulting organisations that will take on the whole process of design, implementation and administration. Many have their own administration software or work closely with the producers of one of the many administration packages. You may benefit from this ability to negotiate good rates for insurance and pensions and they may also be able to add value through their existing relationships with retailers.

Consultants may also be willing to distribute and analyse employee opinion surveys, handle focus groups, design and implement the scheme and handle the communication process. They will have a wealth of experience from projects with other clients and should be able to save you time in understanding the marketplace and creating solutions to satisfy the diverse requirements of your employees.

It is vital to fully understand the cost implications of going down each of these routes before making a decision.

4. Organise the structure of the scheme

Most schemes stipulate that employees must retain certain core or mandatory benefits. These should take account of tax and employment law requirements, such as the minimum holiday allowance and the provision of staff pensions. Employees may not opt for flexible benefits, e.g. via salary sacrifice, which take them below the National Minimum Wage. You may decide that certain staff benefits also make good business sense, such as private medical insurance. Typically, however, organisations try to keep the core element of a scheme to a minimum to give employees as much choice as possible.

5. Decide on the benefits menu

Most flexible schemes are launched with a variation of the existing benefits package, but you may decide to start from scratch or extend the options to provide a far wider range of benefits for selection. The challenge is to provide a menu of benefits which satisfies the needs of all eligible staff, but which does not confuse by providing too much choice. Some of the most common benefits offered are:

  •       childcare vouchers
  •       critical illness insurance
  •       dental insurance
  •       healthcare cash plans
  •       holidays
  •       pensions
  •       retail vouchers
  •       travel insurance.

Make sure that your menu is of interest to employees at all stages of their career and with varying personal circumstances.

6. Define the enrolment options

You need to determine a process for enrolling on the scheme and for making changes to selections. Online enrolment via an intranet or secure internet connection may be the only feasible option for large schemes, but you need to consider whether all employees have access to the web during their working day. It may be necessary to make computers available to employees who do not have their own work station.

Paper-based enrolment may be the only option when few employees have regular online access in the workplace. The documentation should include a personalised preference form, which typically contains details of their current benefit entitlement, the value of the available flex fund, and the cost of the different options available. Staff and an administrative process must be in place to handle the returned forms.

Whichever approach you adopt, it is common practice to send a confirmation of the selections, possibly for the individual to sign. You may also need to allow a period of time for reconsideration.

Total reward statements may be distributed at a specified time after the selection process has changed. This serves to remind employees of the value of the total package and also keeps the flex scheme in peoples' minds. Online systems often produce an indication of total value during the selection process.

Remember also that people's circumstances may change - for example, they may suffer a bereavement - and this may then have an effect on the benefits they wish to use. It is advisable to set out the terms of when and how employees can change their benefits.

7. Communicate with employees

Organisations that have adopted flexible benefits have found that effective communication is key to successful employee engagement. Develop a communication strategy that:

  •       provides an introduction to the plan for all new employees
  •       drip-feeds information to staff prior to the launch - perhaps via newsletters, for example
  •       includes a high-profile launch event
  •       provides a detailed explanation of how the scheme works and the range of choices available
  •       educates employees about some of the technical tax issues, such as salary sacrifice
  •       encourages staff enrolment and selection of options
  •       follows up on employees who do not enrol
  •       promotes the scheme, once it is up and running, to maintain interest and increase participation
  •       keeps employees informed of changes to the scheme.

The communication methods which may be appropriate include:

  •      road shows and formal presentations
  •      the corporate intranet
  •      newsletters, bulletins and posters
  •      personal letters to employees
  •      emails
  •      one-to-one consultations.

Giving a scheme distinctive branding has helped organisations to increase awareness among employees and promote awareness. The name chosen should reinforce the key message that the scheme is about giving employees more choice and personal control of the package.

8. Monitor take-up and develop the scheme

The most successful schemes are likely to be those where the benefits on offer are regularly reviewed. A measure of success commonly adopted by organisations is take-up rate. At its most basic level, this records the level of engagement from employees with the scheme, but you should attempt to delve deeper and record the take-up rate for each benefit on offer.

However, taking these figures at face value may lead employers to miss key employee concerns and may mean that they do not fully understand the perceived value of benefits with a low take-up, such as childcare vouchers, to those individuals who do opt for them. Consider using focus groups or an employee survey to get a more complete understanding of perceptions.

Managers should avoid:

  •       making schemes too complex
  •       rushing to implement a scheme without adequate strategic thinking and communication
  •       failing to take account of legal requirements and changes to those requirements
  •       considering that this is a one-off process. Successful schemes need refreshing on a regular basis.

This Blog was created by Lindsay Frankland, Professional Academy's student services manager. Lindsay has worked for a number of years not only as a top level manager but also as a management tutor, consultant and directly with the chartered managment institute. If you would like to know more about CMI Management Qualifications with Professional Academy please find all the info here or feel free to contact us for an informal chat about the options available to you.  

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New Intensive Workout Weekend Workshops from Professional Academy

Published: 01 April 2014

At Professional Academy we are always looking for ways to support the needs of Professionals and their continued personal development but we understand that it is sometimes hard to fit all of the elements you need to maintain a healthy lifestyle whilst working on your desired Professional Qualification in Marketing, Management, Digital Marketing or Sales. With this in mind Professional Academy are combining all of the best elements of Professional Qualifications and Personal Training in to one excellent intensive workout weekend workshop package!

Please see the below flyer for more details!

The next stage in Professional Qualification Training from Professional Academy

UPDATE:

As it has passed 12 midday GMT we only feel it is fair to say to everyone who didn't already guess that this was an april fools joke. That being said we did take a few phone calls from interested parties so maybe it is time we convert one of our study centres to a gym & study facility. Watch this space!

For thos interested in Professional Qualifications without the Personal Training you can still sign up for our excellent courses in Marketing, Management, Sales & Digital Marketing and you can download the relevent prospectuses here.

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CIM December Result Commendations for Professional Academy

Published: 31 March 2014

The Chartered Institute of Marketing sent us a very lovely letter to start the week commending the excellent work of our students and tutors on achieving not only the great results (which can be found in the on our Pass Rates Page) but some truely outstanding individual module results achieved across the pathways. 

We would like to thank all of our students for their hard work and dedication in achieving such a high standard of results across the CIM Marketing and CAM Digital Marketing courses.

We would also like to thank our tutors for their continued commitment to helping all of the Professional Academy students achieve such excellent results across all of the Marketing Qualifications submitted in December. 

The commendation letter from the Chartered Institute of Marketing follows:

Congratulations!

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent performance of its students during the December 2013 assessment session. The following statement(s) of commendation have been issued by the Awarding Body:

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent standard of results achieved for assessments submitted in the December 2013 assessments session for the Understanding Customers unit of the CIM Introductory Certificate in Marketing.

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent standard of results achieved for assessments submitted in the December 2013 assessments session for the Marketing Information and Research unit of the CIM Professional Certificate in Marketing.

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent standard of results achieved for assessments submitted in the December 2013 assessments session for the Project Management in Marketing unit of the CIM Professional Diploma in Marketing.

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent standard of results achieved for assessments submitted in the December 2013 assessments session for the Advertising unit of the CAM Diploma in Marketing Communications.

The Awarding Body at The Chartered Institute of Marketing (CIM) has commended Professional Academy for the excellent standard of results achieved for assessments submitted in the December 2013 assessments session for the Digital Marketing Planning unit of the CAM Digital Diplomas. 

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9 Common Management Mistakes

Published: 27 March 2014

Are you guilty of some of these common Management Mistakes? Learn from them. don't be an awful boss!

Management can be a minefield of potential mistakes for new and experienced managers alike. With this in mind Professional Academy decided to look into the most common mistakes and hopefully help aspiring and current managers avoid these very common pitfalls in the future.  

1 - Being afraid to react.

In our time as a professional training academy we have heard tales of managers who will see a mistake being made by a member of their team and instead of reacting there and then they save these mistakes to “discuss at the next performance review”. This may seem like an alternative to micro-management but it can hurt your business. For example if your sales person has a terrible telephone manner they could spend months putting potential customers off from your business when a simple tap on the shoulder and a chat to highlight the issue would nip it in the bud there and then.

 

2 - Fighting fires and not planning for the future.

Micro Management at it's worse

Spending all day fixating on the day to day issues of your business can cause your business to stagnate. Though we said in the last point that you shouldn’t be afraid to fix problems on the spot, you also should not be afraid to take a step back from the business, sit down and strategise for the future. There is no shame in even the most open doored manager closing his door to plan or even working off site for the afternoon to look at where your business or even your team should be focusing, changing and developing in to the future.

 

3 - Failing to Listen to your team.

When it comes to planning and creating strategy it is important to acknowledge the thoughts and ideas of the team, some of the best ideas in the world have come from the workforce. Your team are the ones who deal directly with customers on a daily basis so they are constantly gathering feedback and some may even be implementing ways to make day to day life easier and the business stronger without even realising it. Embrace these ideas, they may be able to be rolled out across the whole business and could help propel your business in to the future.

 

4 - Not Respecting your team.

It may be a cliché but true respect really is earned and cannot be demanded. It starts in the simplest place by knowing and respecting your team. If you talk to someone like a child they will act like a child so knowing which approach works best for each team member is essential works best with. Some will need to be given a sharp kick up the backside once in a while, some will need confidence boosting, some may want to be left alone to get on and some may need to be reminded of their job role every so often, but all employees are different and must be treated as such. This individual approach will earn you respect as a manager and will help your team, help you to move the business forward.

 

5 - Not delegating.

The most common mistakes for managers are usually focused around delegation; either a manager is delegating too much or not enough. A manager who fails to delegate will become overloaded and fail to move the business forward. A manager who over delegates with no explanation as to why could lose the respect of their team. The key rules to live by as a manager when it comes to delegating are:

  •            Only ask someone to do something you would be happy to do yourself if you had the time
  •            Only delegate a task to someone who is happy to take on the task
  •            Only delegate to someone is capable of completing it to a level you would be happy with yourself. 

 

Have you ever failed to explain what your company goal is? Do all your team know what they are working towards?6 - Misunderstanding Motivation.

Managers sometimes forget that motivation isn’t just about cash incentives. Each team member can be motivated by different things from training to responsibility, internal promotion to the standard monetary incentive. Knowing what motivates your team members will help you get the best out of them and there is no blanket solution but knowing the right carrot to hang off the end of the stick will really drive results for your business.

 

7 - Failing to explain or even set goals.

A team, business or individual without a goal can become aimless, unmotivated and their performance will be difficult if not impossible to track. A team should not only be aware of their own goals personally and as a collective but also the businesses goals and philosophy. An understanding of how individual goals form  part of the company’s goals will help to consolidate a team towards a common goal. If everyone is working together the goal will become easier to achieve and more celebrated across the team when it has been achieved or surpassed.

 

You need a bit of humour in the work place. We can't all be evil Mr. Burns8 - Taking it all way too seriously.

Just because you are a manager does not mean you have to lock your sense of humour away. There is nothing wrong with letting your hair down once in a while, sharing a joke and maybe a drink with your team every now and then. It is important for your team to know you are a human being and not just a robotic, humourless boss.

 

9 - Not understanding what it means to be a manager.

Managers, new and old, often get this wrong which is why the previous 8 mistakes occur. Managers are often thrown in at the deep end when they start their first management role with no training and really no sense of what being a manager actually means.  Victor Lipman wrote 10 reasons why companies should invest in management training for Forbes in 2012: 

“…This is akin to someone who’s never driven before being given keys to a car and told: “Drive.”  (Many many years ago, this is how I first learned to manage.  I blundered my way through it. Trial and error.  It wasn’t pretty.)”

This is where CMI Management & Leadership Qualifications come in handy. As the title suggests they not only look at management but the leadership qualities a manager needs to be successful from your very First Managerial Role to the day you are working as a Company Director. The CMI have developed a qualification to suit each level and help you drive your business forward.

If you would like some more information feel free to download a copy of Professional Academy’s Management Qualification Prospectus or contact Professional Academy for an informal skills assessment. 

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