Flexible benefits provide employees with the freedom to choose how companies apportion staff rewards and benefits. They have become increasingly popular as organisations become bigger and accommodate employees with different types of needs. This article explains what flexible benefits involve.
Freedom to choose
Flexible benefits schemes in organisations provide employees with the opportunity to select the benefits that they prefer rather than the pre-arranged variety. In these benefits, workers have the freedom to choose employer-paid benefits, employee-paid benefits or cash benefits. They are different from conventional benefits that limit employees to selecting either one of the three options listed above. Flex benefits have become increasingly popular over the last three decades as mergers and acquisitions dominated the global corporate landscape. The integration of internal and external services in merging companies meant that two or more firms would have to find solutions that accommodate all their employees. One group of workers that had a unique set of benefits would join another group that had different sets of benefits. The management would then have to combine the benefits services, and create a system uniquely satisfactory to both sets of staffers.
Employer-paid benefits are primarily perquisites that come as statutory contributions. They include a diverse range of options for staff, such as taxable benefits usually given out as work benefits. Employee-paid benefits Employee-paid benefits primarily take the form of deductions such as salary deductions towards pension contributions. Cash benefits usually come as staff benefits designed to reward employees, and provide them with an incentive to perform well on the job. They include reward vouchers and other fringe benefits that come with particular posts. Flexible benefits consider all this, and give workers the opportunity to pick one or more of these options depending on their preferences. This is in tandem with the liberalisation of financial services in most countries where both the public and private sectors are giving employees more freedom to choose their financial destiny. The integrations of financial services due to technology growth over the last 30 years has lowered the cost of integration and made flexible benefits a popular choice among firms across the global corporate world.