In today’s dynamic workforce, one-size-fits-all benefits packages are rapidly becoming outdated relics of the past.
Why?
Because many employees find their current benefits fall short of meeting their diverse needs, resulting in frustration and compromise, especially in core areas such as health, wellness, and financial security.
Businessolver’s latest report shows that 85% of employees are still scratching their heads when it comes to understanding their benefits. But, even though they’re confused, employees still want to use them.
Enter flex benefits — the solution to bridging this gap.
Instead of being stuck with a one-size-fits-all plan, they can choose the benefits that actually matter to them.
Whether it’s extra vacation time, help with childcare, or saving for retirement — it’s all on the table.
Ready to kick your benefits program up a notch? Here’s a handy guide on how flex benefits can take your organization to the next level.
What are Flexible Benefits?
Flex benefits, also known as personalized employee benefits, offer a refreshing approach to employee compensation, allowing employees to curate their benefits package based on their unique needs and life situations.
But, even though most employees prefer selecting their own benefits, only a few feel confident enough to do so. Puzzling, isn’t it?
According to PeopleKeep’s 2022 Employee Benefits Survey Report, 65% of employees prefer choosing their own benefits. Yet, only 36% of respondents felt they had a say in them.
Unlike traditional benefits packages that offer the same benefits to everyone, flex benefits give employees the freedom to customize their own benefits plan.
This means they can choose from a menu of benefits that provides the right mix of protection and value for their unique situations. The level of autonomy varies by company, but generally, employees get to have a say in what benefits they want to get.
Common components of a flex benefits package include:
- Health insurance – Workers can opt for different levels of coverage and plan types based on their medical needs and budget. Options like Health Savings Accounts may be included.
- Retirement planning – Employees can select the retirement accounts and savings levels that best fit their financial goals. 401(k)s, pensions, and IRAs can be part of the menu.
- Wellness programs – Workers can choose wellness benefits like gym discounts, smoking cessation plans, or meditation apps. The options encourage healthy lifestyles.
- Time off – Paid vacation, sick days, and leave policies can offer flexibility. Employees may be able to buy or sell days.
- Professional development – Educational assistance, skills training, and career services cater to diverse growth needs.
- Lifestyle benefits – Perks like pet insurance, legal services, or commuter benefits allow customization for different lifestyles.
The mix of options gives employees more control over their benefits spending and the ability to match their compensation package to what matters most to them. This freedom and flexibility is the hallmark of flex benefits plans.
Advantages of Flex Benefits for Employees & Employers
In today’s workplace, it’s important to tailor employee benefits to meet diverse needs.
“One size does not fit all anymore,” says Robert Swatland, senior principal at Korn Ferry. “Younger generations want pet insurance, and older generations are worried about elder care. It’s so competitive in the job market, and [benefits] is a great spot to offer something unique, to set yourself apart from others when wages are tighter,” he asserted.
By giving employees the autonomy to choose the benefits that matter most to them, flex plans give a number of advantages to both employees and employers:
Increased Satisfaction and Morale
Flex benefits play a pivotal role in boosting employee satisfaction and morale within the workplace.
Carla Yudhishthu, Chief People Officer at Mineral, says, “Flexible benefits empower employees to ensure their organization is meeting their professional and personal needs.”
She also added, “Employees want to feel their employer is investing in them, and flexible plans are a great way to do exactly that.”
By offering flexible benefit plans, employers demonstrate a genuine commitment to investing in their employees’ well-being. This kind of support creates a positive and happy work environment that boosts job satisfaction and morale.
Ability to Prioritize Needs
Flexible benefits are a great way to help employees take care of their individual needs and preferences.
They can customize their benefits package to suit their unique circumstances and focus on what’s really important to them.
Whether it’s staying healthy, planning for the future, or balancing work and life, flexible benefits allow employees to allocate their resources the way they want.
This level of control helps employees take ownership of their benefits and feel more satisfied with their compensation.
Attract and Retain Top Talent
Flex benefits are a powerful tool for attracting and retaining top talent by offering a personalized approach to employee compensation.
It’s a great way to show your staff that you care about them and that you’re invested in their wellbeing.
A recent study by MetLife found that 72% of employees said customized benefits make them feel more loyal to their company. This helps build strong employer-employee relationships and reduce turnover rates.
Increased Productivity and Engagement
Did you know that flex benefits can also impact employee productivity and engagement?
A study by Brink News found that 75% of employees with access to varied benefits reported feeling energized at work, compared to only 64% of those without benefits.
By providing access to a diverse range of benefits tailored to individual needs, employees feel supported and motivated to perform at their best.
This positive feeling can lead to increased job satisfaction, better morale, and higher productivity and engagement levels among employees.
Administrative Challenges in Flex Benefits (and How to Overcome Them)
Flex benefits have their perks for both employees and employers, but some challenges also come with it. Here are a few things you should also consider:
Time and Administrative Resources
Setting up flex benefits can be a lot of work, from creating the program to handling sign-ups and keeping everything running smoothly.
For starters, each benefit must comply with the current federal, state, and local laws and regulations.
Flexible benefits plans are a bit more complicated because they intersect with employee salary and are funded by pre-tax contributions.
This means they’re regulated by the Department of Labor and the IRS under the Employee Retirement Income Security Act of 1974.
If you offer a lot of flexible benefits, it can take up a lot of time and resources to make sure everything stays compliant with the various laws regarding benefits and taxes.
But with some careful planning and the right tools in place, you can make things way easier on yourself and your team, and minimize the administrative burden associated with flex benefits.
Effective Communication
Clear and consistent communication is crucial for the success of flex benefits programs, ensuring that employees understand their options and make the best decisions for themselves.
Since employees can usually change their benefits and contributions, your HR team must have a good line of communication with your employees.
Or, if you have an easy-to-access platform for your employees to use, ensure they know about it.
Keep track of what benefits your employees choose so you can comply with the associated payroll deduction laws and regulations.
More importantly, don’t forget to tell your team if you change any of the benefits you offer.
Cost Considerations
Although flex benefits can be a great perk, setting it up can come with a significant financial investment.
From software and technology costs to additional administrative expenses, you must weigh the costs against the benefits they might get in return.
Before you switch to a flexible benefits plan, it’s important to have a chat with your employees about what they need and want from their benefits package if you already offer traditional benefits. This will help ensure that the new plan meets their needs and is well-received.
Which Flexible Benefit Plans Should You Use in Your Company?
Flexible benefit plans allow employees to choose from a menu of options to customize their benefits package. Here are some flexible benefit plans from different companies you can take inspiration from.
Supporting Employees Through Life Stages
Effective employee benefits can be a huge help throughout various stages of life.
Liberty Mutual Insurance understands this and offers a range of benefits to choose from as per changing needs.
Their benefit options are designed to cater to specific life events, such as paying off student loans, starting a family, taking care of physical and mental health, and dealing with legal issues.
What We Think: This flex benefits plan works for you if you want to provide a support structure through life stages, allowing employees to pick and choose different benefits as their lives change over time.
By offering flexibility based on employees’ evolving needs, you can ensure your benefits package remains relevant and supportive throughout their journey.
Allocate Flex Benefits Funds
Pleo, a Danish start-up, is known for providing its employees with a comprehensive benefits package.
But what sets Pleo apart from other companies is their Flex Benefits budget.
Every employee gets to choose how to use this budget, whether it’s to learn new skills, donate to charity, invest in their home office set-up, or even hire a nanny for date night.
What We Think: Consider setting a Flex Benefits budget that empowers employees to allocate funds towards whatever matters to them most.
This approach allows individuals to prioritize their needs and preferences, promoting a sense of autonomy and satisfaction in their benefits selection process.
Benefits for Overall Well-Being
Leading organizations like PWC and BNP Paribas have their employees’ backs regarding their well-being.
PWC’s My+ Program is spot-on with its customized benefits that cover everything from physical and mental health to financial security, social connections, spiritual fulfillment, and emotional well-being.
BNP Paribas’ award-winning flexible benefits plan also includes all sorts of benefits beyond the basics of salary, bonus, and pension schemes.
They offer employees a choice of different benefits, from dental insurance to health screening, to improve their overall quality of life.
What We Think: Tailor your benefits offerings to address various aspects of employees’ lives, including physical and mental health, financial stability, social connections, spiritual fulfillment, and emotional well-being.
This way, you can provide personalized benefits that promote overall wellness, making your workplace more supportive and inclusive.
It shows your employees that you care about their well-being and value them as part of the team.
Implementing Flex Benefits in the Workplace
Implementing a flex benefits system requires careful planning and execution to ensure a smooth transition from traditional benefits packages. Here are some key steps for organizations to take:
Analyze Current Benefits and Employee Needs
It’s a good idea to ask your employees about the benefits they value the most. You can do this by conducting surveys or focus groups.
This allows you to structure your flex plans around their needs and desires.
Now, when conducting these surveys, it’s important to ask specific questions about the benefits you currently offer, as well as any potential benefits you may be considering.
You should also encourage open-ended responses so that employees can provide more detailed feedback.
Moreover, consider which benefits are underutilized or unnecessary as well. This can help you to streamline your benefits package and allocate resources more effectively.
Set Flex Benefit Parameters
When you’re offering benefits to employees, it’s important to think about a few things.
What kinds of benefits will you offer? How will you charge for them? Will your employees get money to use towards benefits or credits to allocate?
How often can they change their benefits? What choices will they have?
By defining these parameters, you can create a flexible benefits program that meets your employees’ needs while being cost-effective for your organization.
Develop Educational Resources
Employees need to fully understand their flex benefits options before making selections. So, it’s important to create clear communication materials explaining the new program and how it differs from their previous package. Make sure they’re available to everyone.
You can also hold some info sessions where people can ask questions and get help from advisors. That way, they can make smart choices that work for them.
Encourage Mindful Choices
When there are lots of options, it can be tough for employees to pick the best one for them. Help them choose options that work for their situation, not just the ones with the most benefits.
For example, you could provide them with online resources or access to a benefits counselor who can walk them through the available options and help them weigh the pros and cons of each.
But it’s also important to set reasonable limits on how frequently employees can make changes to their benefits selections.
Flexibility matters, but if their needs change too much, it can be disruptive and confusing for both employees and HR staff.
Track Usage and Costs
Keep an eye on what your employees are choosing, how much it’s costing, and what they’re saying about it.
This way, you can see what’s popular and make changes if something’s not working out.
Be clear about what everything costs and be open to feedback, so if there are any problems, you can catch them early and fix them. Remember to keep refining as you go.
Maintain Two-Way Communication
To keep your employees excited and well-informed about the employee benefits program, it’s important to give them regular updates and remind them of the open enrollment periods.
Ask for their opinions and suggestions to make the program even better. With flexible benefits, it’s a team effort between you and your employees to make it work.
Here’s a Great, Easy Way to Offer a Better Perks Package to Your Employees
Are you an employer looking to provide your employees with the best possible perks?
Abenity’s Employee Benefits and Perks Report is a proven playbook for success.
Whether you’re launching a new flex benefits program or want to get more value from your current offerings, we have data-backed recommendations that allow you to align benefits with employee needs and preferences.
This can help you improve recruitment, satisfaction, productivity, and retention.
Don’t leave the design of your benefits package to guesswork. Download our Perks Report now to access actionable insights for your strategy!
