HR Zone Q8: Are cafeteria-style reward schemes ethical? If an employee selects lifestyle options over pensions contributions for example is that right?
Boyle: At the end of the day, the reason for introducing flexible benefits is to enable employees to choose a benefits package which best suits their lifestyle.
However, we feel that employers do have a duty of care towards their employees and as a caring and responsible employer Mills & Reeve has decided that employees must have a core level of benefits. This includes not allowing them the option to opt out of pension and spend the cash on other benefits and introducing a minimum core level of cover for PHI (45%) and life assurance (two times salary).
The system allows Mills & Reeve to set certain parameters, which stipulate that employees are not allowed to spend over a certain amount for example 20% of total salary. It will also prevent them from dropping below the LEL or minimum wage. Reports are generated and reviewed in any event to highlight any anomalies where a possible error may have been made by someone and can therefore be addressed before it is processed through payroll.
HR Zone Q9: Is there any link between flexible benefits and productivity?
Boyle: This depends on the level of value that employees place on a benefits package. For those employees who rate it or particular benefits highly, if the benefits on offer are attractive and they believe that the scheme benefits them – then yes, they are likely to be more motivated and potentially, therefore, more productive. This wasn’t the reason for introducing a scheme at Mills & Reeve.
HR Zone Q10: How can HR make benefits work harder?
Boyle: For a benefits package to be attractive to employees it must be understood in terms of what it is worth, relevant and current. Although unable to meet everyone’s requirements, having a broad range of benefits means that more employees are likely to take them up and therefore get value from them.
In addition, taking advantage of the latest government incentives such as HCI, bikes4works and childcare voucher schemes, for example, may mean extra administration, however, they are benefits that are likely to be of interest to employees. An example of this is the discontinuation of HCI schemes.
Mills & Reeve wanted to enable employees to take advantage of the tax break and managed to introduce the scheme just before it was removed.
In introducing My£Reward, Mills & Reeve has committed to reviewing the benefits available, with employees, on an annual basis through staff opinion surveys. The aim is to remove benefits that are no longer seen to be of value, and as the scheme matures, to introduce new ones. This means that the scheme will stay fresh and employees can take advantage of the latest offers.
An important part of a successful benefits scheme is ensuring there is a communication process to support it, so that staff know what is available and how benefits are accessible. This is especially important if some are voluntary. Benefits are discussed during the induction process but unless information is available throughout the course of employment, you may find that there are some benefits that employees are just not aware of. With a portal dedicated to benefits and reward, we hope that employees will take advantage of what’s on offer.
HR Zone Q11: How do you assess the return on investment?
Boyle: This really depends on what you are expecting to get out of introducing a flexible benefits scheme. Feedback through the staff opinion survey will identify if the scheme has been well received and if the benefits on offer are valued, as will take up.
We already have a positive story where one employee was considering leaving but has decided not to because they are now able to increase their holiday entitlement. One of the key HR strategies is to ‘attract and retain talented people’ therefore a measurement we will review is leaver reasons and whether this changes over time.
