Buck Bond Group
Flexible benefits and COVID-19

Flexible benefits and COVID-19

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With a significant number of UK employees working from home, and potentially doing so for some time to come, what changes might we expect to see in the design of flexible benefit programmes and the provision of benefits technology? With reductions in commuting on public transport, will we see a corresponding demand for cycle to work schemes? Should provisions be made for more flexibility around healthcare benefits and how will any predicted changes in the pattern and behaviour of workplace savings manifest? What does ‘flex’ look like in 2021 and beyond?

So much has changed over the last 3 months, both in the world we live in and how we work, but how has the global pandemic impacted flexible benefits to date? Well, on first glance, not much. In fact, it’s been pretty much business as usual.  Over the last few months, schemes renewed, employees selected benefits and others saw monthly new joiners but nothing really changed and, on the whole, it was generally quiet. Some employers introduced COVID-19 qualifying life events but even these failed to ignite wholesale change in benefit selections. Employees either stayed calm, seeing lockdown as a temporary state or had bigger concerns than their benefits. Either way, we didn’t see large numbers opting out of (temporarily) unavailable benefits or attempts at panic-buying those relating to health and financial protection.

More interesting, then, is the question of what is going to happen to flexible benefits in the future? I think there are a few areas that will change as a result of shifting employee priorities, squeezed employer budgets and the new normal we find ourselves in – all created by the pandemic.

Firstly, the shape, operation and popularity of a number of benefits is going to change.

Public transport is now an unattractive prospect for many of us and, at the same time, the government is encouraging us to travel under our own steam – on foot and by bike. Cycle-to-work schemes, a longstanding staple of flex schemes, are already undergoing an upgrade. Spending limits are being increased to capture higher specification bikes for the enthusiasts and electric bikes for the less enthusiastic.

Holiday buy/sell behaviour is (predictably) seeing a reversal in popularity on previous years, as employees, severely limited in holiday options and ambition, choose to sell unused days rather than purchase additional.

For both cycle to work and holiday buy and sell, additional enrolment windows might be needed in the second half of 2020. Employers will note, however, that bike schemes require a cash outlay and holiday sell is a cash cost to the employer – at the very time when many businesses are looking to protect cash reserves.

Another area where benefits may change is around healthcare. For many employees, the pandemic has brought into sharp focus the need to look after the health of themselves and their loved ones. We may well see some greater flexibility in access to these benefits, what is covered or the way they operate.

The second area is wellbeing (physical, mental, financial and social), which has suddenly jumped up the priority list of anyone managing people. Taking care of employee wellbeing has a new resonance for pretty much every employer. It’s no longer a nice-to-have or the mark of an employer going above and beyond – it’s now vital and as important as the traditional benefits an employer provides. The need for financial resilience alongside good physical and mental health has never been of more importance in recent years. In addition to all those furloughed, many people are now working from home (and likely to do so for the foreseeable future). Employers need to deliver effective wellbeing support to a workforce they may not be able to meet face-to-face. An enhancement of flex technology is the natural home for this, allowing employees to shape their wellbeing needs to suit their unique circumstances.

I’ve already mentioned a change in employer budgets but it’s worth highlighting again here.  In times of financial turmoil, businesses will look to preserve cash as much as possible. Even those seemingly untouched by the pandemic will be closely monitoring spend and cash outlay. This creates a conundrum for an HR team, which knows that it needs to introduce engaging and effective wellbeing support but has no budget. Is this the third way in which flex will change? Will fee free technology implementations become the norm and ongoing per capita prices lower to allow and encourage all employers big and small to provide employee access?  To help businesses meet their wellbeing needs, things may well have to change.

Finally, how will the technology itself need to adapt? I’ve already talked about how it will need to deliver wellbeing initiatives – and by this, I mean properly deliver them, rather than simply providing a link. Personalised content, active prompting, clear communication, flexible choices, modelling tools and decision support, amongst other areas, will all be key.

In recent times, a lot of focus (quite rightly) has been on how and where employees access flexible benefits. The use of mobile phones was of course seen as the future – employees selecting their benefits at home or on their commute to and from work, alongside the management of so many other areas of their lives.  Is this still the case? I am writing this on my laptop at home and it would seem rather odd now to turn to my phone to make flex selections. If I’m commuting to work by bicycle, it’s unlikely that I will be selecting my benefits as I do so. It’s anticipated that work patterns will never be the same. Working from home is here to stay, at least to a degree for a large number of people – and flex technology will need to consider how it adapts to that.

So, for flexible benefits it’s less a case of what’s changed over the last 3 months and more about how much it will change moving forwards.  Changing employee priorities in terms of the benefits and support services offered, along with the technology used to engage with them, will dictate where it goes next.