July 26, 2019
Number of flexible benefits programmes continues to rise
New research from Aon, claims that flexible benefits programmes continue to be popular within organisations, despite communication challenges and a potential impact from 2018’s optional repayment arrangement (OpRA) regulations. Aon’s Benefits and Trends Survey 2019 claims that 45 percent of employers say they already have an online benefits or flex portal, with a further 20 percent saying they plan to introduce one within the next three years. This compares with last year’s 37 percent and 26 percent, respectively.
The Optional Remuneration Arrangement (OpRA) came into effect in April 2018 as part of the Finance Act 2017. It impacts both employers and employees, creating tax charges on a number of benefits, including group life assurance and group income protection. Employers were advised to understand the individual complexities impacting their business and people. These complexities meant many expected OpRA to negatively impact employer’s offering flexible benefits schemes.
The Aon survey also claims employers’ top three benefits strategy objectives. Given multiple choices, 89 percent of respondents say engagement is an objective, 80 percent say retention, and 70 percent say recruitment. Of those with a flex scheme, 71 percent of employers say communicating with employees is the biggest challenge, while the next is dealing with benefit design changes. Only 8 percent of employers feel their benefits strategy has been very successful, while 54 percent say it has been somewhat successful. This year’s Benefits & Trends Survey also claims that the way organisations measure engagement has changed little since last year, with benefit selections and portal clicks being the most common measurement metrics.
Clare Sheridan, principal consultant at Aon, says: “Flexible benefit schemes remain popular even though 2018’s legislation changes created complexities for employers. Flex’s popularity could be because the technology and ongoing management has become more accessible as costs have reduced, making it feasible for more companies to implement, particularly mid-sized firms employing 200-1000 people.
“Employers are largely not able to understand if employees are truly engaging with the benefits offered.”
“However, employers are largely not able to understand if employees are truly engaging with the benefits offered. The results show that the main measures of success from an employee engagement perspective continue to be around employees actively selecting benefits or how many clicks are recorded on the portal. This is not understanding if you’ve won hearts and minds through behaviour change, or by receiving positive comments, or if you have made an emotional impact. Without this type of feedback, is it possible to tell how well the flex programme is working? Can an organisation really understand how benefits are impacting employees and ultimately business goals?
“A big driver in this is communication. It remains employers’ biggest challenge, yet 70 percent of companies spend less than £5k on communication to aid understanding and to drive behaviour change.”