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“It’s not very flexible, is it?”

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Flexible benefit schemes have been used (to varying degrees) by employers for the last 40 years. The first schemes started appearing in the 1980s, with a handful of benefits on offer and with very limited options for the employees – but certainly more than they had ever had previously. Originally influenced by healthcare plans in the US, UK schemes quickly expanded to include a wider range of benefits.

Throughout the nineties, flex was mostly the preserve of the larger employers. The average size of employers adopting or planning to adopt such a plan has shrunk dramatically over the years, but maintaining a set of core benefits (with some limited flexibility – perhaps in life assurance multiples or holiday days), with a set of additional voluntary benefits available at added cost, has remained the preferred approach. This is flex with a lower case ‘f,’ rather than the full ‘here’s a pot of cash, design your own individual benefit programme from scratch’ approach (i.e. Flex with a capital ‘F’).

Now, however, there seems to be something of a change happening. As a generation who have lived their entire lives with technology and all the flexibility that brings – particularly around retail and choice – comes into the workplace, schemes are suddenly being exposed as …not very flexible. Imagine how stuck in the dark ages it must seem to a twenty-something, to be told you have one opportunity a year to select half of your benefits for the twelve months ahead. And even worse, the other half is something you have no say in – your employer has decided on those for you, even if you don’t have any dependents and your focus is on saving for a first home, for example, but the default benefits package is geared towards an older employee with totally different needs and priorities.

Employers will need to change. Introducing so-called ‘anytime’ benefits or multiple selection windows in a year is a start, but should we be going further? An environment where employees are free to choose not just some of the levels but also the exact types and mixes of benefits they have, without employers mandating any core cover (beyond legislative requirements), is already becoming a priority for a number of forward-thinking employers.

Yes, it will create problems such as a moral dilemma in the case of life cover not taken up, and potential productivity concerns if medical insurance is ignored. However, the technology is up to the task of managing such an approach, flagging and mitigating such concerns. Ultimately, in an environment where employee wellbeing has never been a greater priority for many employers, giving genuine freedom of choice will become a necessity for any business vying to become the employer of choice.

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