Many employers remain cautious about flexible benefits programmes because of the complex administration involved. John Mullen looks into a lower-maintenance approach that allows employees to consider their options - and update their personnel records - using special kiosks
People Management, 16 Apr 1998
Despite the often-heard rhetoric that "the future is flexible", there are several reasons why flexible benefits are not for every employer. There are concerns that the pick-and-mix approach conflicts with organisational culture, or that employees may be reluctant to take up the option. But there is one overwhelming factor accounting for why relatively few companies have installed such schemes: administration.
A recent study by Arthur Andersen found that only 10 per cent of 289 companies it surveyed had adopted flexible benefits schemes. The main reason given by firms that had decided against implementing one was that it was too expensive or difficult to manage - more than 70 per cent said that their biggest fear was "complex and costly administration".
But administrative burden can now be handled by sophisticated software on company intranets and the information can even be outsourced to a third party, simplifying the process even further.
Enter the kiosk
At the forefront of this process is Alcatel Telecom, the French-owned telecommunications equipment manufacturer, where electronic kiosks have been installed in the workplace in which staff can monitor or modify their benefits. The kiosks allow people to access their current benefits package and test out new combinations, each of which is costed by a computer that also supplies information on the tax implications of their selections.
Alcatel hopes that the kiosks can be developed in the long term as one-stop information points, containing management handbooks and also give career development advice. (see case study: "All change at Alcatel")
Unlike some UK firms, US companies tend to place their kiosks in the most accessible areas. Employees can then select their cafeteria benefits while they are sitting in the cafeteria. "You simply need a place that's convenient for employees and allows them a little bit of privacy," says Keith Peterson, public relations director at Ceridian, a US company that has been making software for kiosks for the past two years.
Software meets the need
But kiosks are now only one of several solutions to the problems posed by administering flexible benefits schemes. "Until 12 months ago there were very few software programmes that would solve people's problems with flexibility," says Martha How, senior manager at Coopers & Lybrand. "But the big software providers are beginning to produce flexibility modules."
Ironically, instead of placing an additional burden on personnel departments, the management of flexible benefits could allow companies to target their HR strategies more effectively.
"If you are using an interactive programme to record employee's choices, it can give you a lot of useful information about what people want," says Dominic Holmes, senior consultant at Sedgwick Noble Lowndes. "It allows you to build up a profile of your workforce by examining their likes and dislikes."
Measured response By dramatically reducing the time and money spent on managing human capital, the latest HR software systems are freeing up more time for strategic thinking
