Sep 26, 2010


The main business drivers for flexible benefits are to:
§  Add a note heremeet the increasingly varied needs of today's diverse workforce;
§  Add a note hereincrease the perceived value of the package by targeting expenditure into areas selected by employees;
§  Add a note hereaid recruitment and retention (flexible benefits will normally be preferred by employees to fixed benefits of equivalent value);
§  Add a note herereinforce culture change - for example, flexible benefits can reduce status divisions between grades or be used to encourage greater personal responsibility among employees;
§  Add a note hereposition the employer as flexible and forward-looking in its approach to managing people;
§  Add a note heretie in with a range of other people initiatives designed to make HR processes more flexible, for example: performance-related salary increments; broadbanding, job families, flexible working hours;
§  Add a note hereprovide leverage to the employer's purchasing power to benefit employees and thus secure their loyalty;
§  Add a note herehighlight the aggregate value of the package;
§  Add a note hererespond to employee demand;
§  Add a note heretake advantage of tax/NI advantages for certain benefits (see below).
Add a note hereIn the specific situation of a major merger - or for businesses that are, by their nature, acquisitive - flexible benefits can be a relatively inexpensive way of harmonizing terms and conditions.
Add a note hereFlexible benefits can also be used to control costs by providing employees with a fund to spend rather than promising a particular level of benefits (see below). Hence, if the cost of a particular benefit increases, the employee can choose whether to spend the extra on the benefit. Many US employers have used this approach to contain health-care costs.


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