Flexible benefits are the number one choice for employers across Europe, according to new research.
A survey of more than 500 firms across 12 countries confirmed 60% offered employees a choice of benefits – and another 26% of firms have plan to do so.
Employers told researchers for human resources firm ECB Mercer that they had to offer the benefits to keep competitive in the market for the best job candidates, to keep key staff and improve employee engagement.
Almost two-thirds of the firms confirmed European economic problems had not led to any strategy change, while 13% are ready to offer a greater choice of benefits.
Many employers (39%) complained the cost of setting up and administering schemes was the main drawback of offering flexible benefits.
Positive employee feedback
Kim Honess, UK head of flexible benefits at Mercer, explained new technology developments have addressed issues that worried employers about flexible programs before.
“Internet portals and integrated platforms have become more commonplace, and among respondents with a comprehensive flex programme, 88% of employees are now enrolling in their schemes using an online system,” said Honess.
“Not only do these technological advancements take the burden of administration, they are also extremely cost-effective.”
The research also revealed employers are satisfied with their choice programs.
Three out of four reported that positive employee feedback, while 62% said the program met objectives.
Flex benefit schemes save money
Most firms believe that implementing a flexible benefits program has either saved money (36%) or been cost neutral (46%).
Honess stated that flexible benefit schemes are most common in the UK, where more companies want to become the employer of choice in their sector.
“80% of UK respondents say that remaining competitive in the marketplace is the key objective of their choice plan,” said Honess. “Choice in benefits is also an effective way to enhance employee satisfaction and commitment to the company by recognising differing needs.
“Employees perceive value in this, and with 55% of UK respondents stating that employee engagement is their main objective, it is easy to see why flexible benefits are progressively seen as the means to boost this.”
Programs are fast becoming the norm
Another survey confirmed most large UK employers offer flexible benefits, and many of those who do not are planning to introduce them soon.
The Aon Hewitt Benefits Administration survey revealed that 62% of employers offer flexible benefits and a further 21% say they plan to start them.
Around 60% of firms outsource administration of flex schemes.
“Offering a flexible benefits plan has very much become the norm across a number of industries,” said Lorna Bradford, client director in flex administration at Aon Hewitt.
“We frequently hear from employers that the tax efficiency, positive impact on employee engagement and ability to cater for diverse needs make flex plans increasingly attractive solutions. With ongoing concerns over cost and incoming challenges, we can only see the popularity of flexible benefits plans continuing to rise.”