Swapping unread booklets for computer screens can go down well with employees and save your business money, explains Richard Blundell, co-founder of 4th Contact
Software Source, 16 Oct 2002
"The first employee feedback we had about our online benefits system was ‘fabulous’," says Jane Taylor, head of HR at Delphis Consulting. "The employee didn’t realise that he had such a comprehensive benefits package nor its value."
So goes the benefits debate. UK organisations spend millions on employee benefits that most of their staff neither fully understand nor fully appreciate. How many times is the expensive-to-produce benefits booklet pushed under employees’ microwaves at home and left unconsulted?
Yet online employee benefits can be a key tool in attracting, motivating and retaining staff. Imagine how tempting it is for a job candidate to see the full value of their prospective remuneration package during the course of an interview? "Here you are, this is your salary and this is a detailed list of the benefits – and their worth – that you will receive from the company."
The ‘wow’ factor
"Total reward statements have a big ‘wow’ factor", says Paul Watson, chief executive of 4th Contact. "People’s faces light up when they first see the value of their benefits packages. When we speak to individuals about it you can see each thinking: ‘I’d love to be able to be able to see my own salary package detailed like this’."
Traditionally, implementing benefits software has been the domain of large companies with large budgets and the help of a large consultancy. They’ve been popular for years in the US, where competition for the best staff in the technology industry is fierce.
But advances in online technology mean that small to medium-sized UK companies are now using them to manage and communicate benefits more effectively. Adopters include Greene King, Star Internet and Chelsea Village, the owner of the Chelsea Football Club.
Online systems help employees to understand and work with their benefits packages. They have instant access to their own information or they can contact the benefit providers direct. For HR and payroll, putting benefits online can produce big savings in administration costs.
"Online benefits systems give companies the opportunity to achieve visibility and clarity around the benefits that are provided to staff," says Nicola Clegg, HR manager for New Media Spark.
"Employees here now recognise the real value of their benefits and - as they have access to their policies electronically - no longer rely on out-of-date leaflets for information. Our administration processing has dramatically improved; we are using the same system as the independent financial adviser and can manage the benefits on a real-time basis".
Be flexible
Flexible benefits have also made it to the top of many companies’ agendas. This is unsurprising when you consider the recruitment and retention advantages of allowing employees to pick benefits that suit their lifestyles. If they want more pension provision, that’s fine; if they would prefer a higher-value company car, or fewer holidays, so be it.
Members of staff will be much more reluctant to leave if they know exactly what they receive from the company, that they can choose benefits that suit them - and that they won’t be able to match that package elsewhere.
Flexible benefits can also cut costs.
"A number of organisations have started to quantify the effects of high staff turnover (recruitment, training and lost production) on the profit-and-loss account and are realising that reducing turnover through a flexible benefits plan can produce significant savings," according to a research paper produced by PriceWaterhouseCoopers.
4th Contact’s Watson agrees: "Employers are attracted to flex because it can control the costs of current or future benefit provision. It can also help a shift to a defined-contribution pension scheme, reform company car policies and harmonise terms and conditions after a merger or acquisition".
Numerous benefits can be included in a flexible benefits plan. Pensions, company cars, private medical insurance and life assurance are the standard ones. Others becoming more popular include dental insurance, home computers, retail vouchers, swapping holiday entitlement, childcare vouchers or sports facilities.
Where to start
So where do you begin with online benefits?
First, know exactly what you want to achieve and why. If you don’t do this, then the project can quickly lose its way and there will be no way to measure success later.
Second, start small and increase your plans incrementally. If you are new to online or flex systems, introduce a simple online benefits system that allows everyone involved get used to what it can do. Plan to implement your flex scheme several months later.
Third, don’t underestimate the importance of communication – your strategy for this is as important as creating the scheme itself.
All management and employees need to be convinced – there will always be some doubters. In-house surveys are a good way of discovering how employees perceive their existing benefits.
Richard Blundell is co-founder and sales and marketing director of 4th Contact, a provider of employee benefits software
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
