Five months ago, Pablo’s company announced that all employees could choose where to work from. They could continue going to the office as usual, work from home, or even choose a hybrid model. Pablo was among the first ones to transition to remote work. He had a long commute, and now, working from home, he could save a lot of time and spend it with family and friends. And he was really happy about it. At first.
Soon, he realized that by working remotely, he missed almost all the benefits he had. Free breakfast and lunch, workout classes in the office, and state-of-the-art tech. Now, he had to pay on his own if he wanted to access the same perks. And that felt like a salary decrease, especially given that his colleagues who chose to work from the office could still enjoy these benefits for free. It wasn’t long before Pablo started to look for a new job, one that would offer him benefits he would be able to use…
Leslie is an HR manager at a 250-employee company. When her boss told her she could get a company-wide training budget, she did her research and decided to buy a subscription to a website that offers online courses. She had to buy a large plan to accommodate all employees, but she was confident that everyone would be able to find something useful.
A year later, Leslie gets an automated email “Thank you for being a loyal customer. Click here to access your dashboard and view your year-in-review.” She was in for a big surprise. When she goes to the dashboard, she sees the dreadful numbers: More than 200 employees haven’t logged into the website in the past six months. And, since the beginning of the subscription, only seven had completed a course.
Employees don’t seem to find the courses useful. Yet, the company has been spending (lots of) money on a subscription for an entire year…
These two different stories have one similar takeaway: Benefits are valuable only as long as employees are using them.
Employees appreciate benefits that make their lives easier. And they’re willing to stay with companies that offer meaningful benefits.
But not every employee wants the same things. And that’s where the flexible benefits plans come in.
Custom benefits give employees a chance to pick the perks that make the most sense to them. Instead of having one option (like in Leslie’s case, one site with training courses), employees have multiple options to choose from (e.g., online courses, tickets to web conferences, access to a library.)
Flexible benefits plans sound great for employees—but what’s in it for employers?
Why offer flexible benefits plans to employees?
Benefits help meet employee needs—beyond salary and job security. Flexible benefits help meet unique employee needs. And this way, you can further boost employee satisfaction and loyalty.
Let’s get a closer look into how flexible benefits plans can be valuable both to employers and employees:
Advantages for employers
- Building an inclusive environment: Employees value diversity, equity, and inclusion at work. And you can show your commitment to DEI not only based on how you organize work but also on what kind of benefits you offer. When you deliver flexible benefits plans, you send a clear message to your people that you respect and try to meet their unique needs. And that leads to greater productivity, boosted employee morale, and low absenteeism.
- Improving recruitment and employee retention: Modern organizations know they have to stand out among job candidates and persuade them to join their teams. A flexible benefits package can be rather tempting for potential employees who are looking for control over the perks they receive. At the same time, a flexible benefits plan helps keep top talent and reduce employee turnover, leading to fewer expenses.
- Controlling finances: It’s no use spending a lot of money on benefits when your employees don’t use them. With flexible benefits plans at bay, employees can pick the plan they want. So you’re not wasting your money on things employees don’t want—and don’t use.
Advantages for employees
- Personalizing benefits and expenses: Flexible benefits plans allow employees to decide for themselves how to meet their needs. For instance, one employee might prefer to have a group health plan to cater to family members, while another one might choose an individual health plan that covers different cases.
- Investing in a better lifestyle: A healthy and happy workforce is a big advantage for any business. While mental, physical, and financial support programs are constantly highlighted in the modern world, providing flexibility in benefits can enhance the employee experience and alleviate stress. As a result, employees feel more satisfied, can follow a healthier lifestyle, and perform better on their day-to-day by picking what they need. For example, some people want to prioritize their mental health, whereas others might prefer benefits related to physical wellness.
Which benefits should you include in your employee’s flexible plans?
Not every benefit can be customizable. Let’s see how you can build a flexible benefits plan that better fits the needs of your employees, their preferences, and their lifestyle.
How your people prefer to work can make a big difference to employee satisfaction and retention rates. Besides that, by offering flexibility to the way your people work, it’s more likely to attract and retain top talent. Some areas where customized benefits can do wonders are:
- Transportation: Offer parking spaces, public transportation tickets, and fuel reimbursement up to a certain amount so that employees can choose what benefit suits them best–depending on how they go to the office and how often.
- Annual leave policy: Allow your people to select how they will make use of their annual leave days. Provide sabbaticals, parental leaves, floating holidays, vacation buying, or personal days off for holidays and sick days.
- Equipment and gear expenses: It’s a great common practice to provide equipment to your remote employees. Instead, you could offer discounts or a certain amount of money so they can use it to buy the equipment they need to create their own designated workspace at home. But in the case of in-office teams, it’s not possible for them to choose what type of desk or chair they’ll be using, for example. Still, you can help them personalize their workspace and facilitate the way they work by allowing them to choose any accessories they need (i.e., laptop cases, noise-canceling headphones, coffee mugs, and more.)
- Work model flexibility: Give room for flexibility regarding when and where your people work. Let people choose if and when they’ll work from the office instead of designating specific office and home days and have them create custom work schedules (e.g., longer lunch breaks, early start of the day, etc.)
- Learning and development: Training is essential to your teams. But not everyone learns and retains knowledge the same way. Offer a variety of training solutions, like online classes, workshops, seminars, mobile training, microlearning, video conferences, mentoring, and gamification for your teams to choose from. Another amazing idea would be to include employees’ friends and families in this learning journey. Health insurance and parental leave policies are family-inclusive, why not training, as well?
Health and wellness benefits
Employees in the modern workplace really value it when employers assist them in keeping a healthy lifestyle. And employers can greatly benefit from offering wellness benefits, too. For instance, productivity levels rise while turnover rates and safety incidents decrease.
However, a fixed package of health and wellness benefits doesn’t guarantee that employees’ needs will be met. Consider adding the following flexible benefits to your mix:
- Employee assistance: Personal troubles can hinder productivity at work. Therefore, giving employees some guidance can help them overcome their challenges. For instance, offer confidential counseling programs, self-help groups or coaching, and resources for personal development.
- Customized health insurance: Not everyone has the same needs concerning their health. Personalized health insurance plans are a great way to support your people with their medical necessities. For example, some employees might need a health insurance plan that includes family members, or they might prefer a dental plan instead of hospitalization discounts.
- Life and accident insurance: Similarly to offering a customized health insurance plan, life and accident insurance with customizable options allows your teams to choose their own coverage amounts.
- Wellness initiatives: Offering a plethora of wellness programs to your flexible benefits plans can make a big difference to your employees’ well-being. Some of your people could benefit from nutrition-related programs or meal allowance cards. Others from workout opportunities, and some others from mental wellness incentives. There is a vast pool of choices concerning wellness initiatives, and it’s important that you offer flexibility so that your employees can choose the combination of benefits that’s the best fit for them.
“Getting financial wellness benefits at work is important for 77% of employees,” according to a survey by TalentLMS, Enrich, and Tapcheck. One of these benefits can be offering personalized retirement plans for your teams, as “the majority of employees across generations have chosen retirement planning as the most sought-after benefit.” Your people will feel less stressed about money and about their future, and they’ll be able to focus better on their daily tasks and responsibilities. Let’s see how:
- Flexible retirement plans: IRAs or 401(k) plans are the most traditional retirement plans that employers offer, where employees only pay taxes on their investments when they withdraw from the account. But a 401(k) plan might mean limited invested options. Or a nonqualified deferred compensation plan might be more beneficial to those who don’t have retirement savings as their first priority. Overall, you can offer plans according to the needs of your employees, such as a profit-sharing plan, a defined benefit plan, an employee stock ownership plan, a cash balance plan, and more.
- Health savings account: HSAs, FSAs (health flexible savings accounts), and HRAs (health reimbursement arrangements) are all tax-advantaged plans you could offer your employees for qualified medical expenses. These expenses include doctor appointments, medications, equipment, and dental and vision care for individuals or other dependent family members. Each employee can choose the type of health savings account they prefer, and then use it to cover a variety of medical necessities.
What are some best practices for implementing and administering flexible benefits plans?
Usually, “flexible for employees” means “more work for HR.” Tackling the logistics nightmare can be one of the major challenges of implementing and administering such plans. But there are steps you can take to make your flexible benefits a success–for you and your people.
1. Define your objectives
The first and most crucial step is to define the objectives and values of your organization. What do you want to achieve, and how could flexible benefits plans help that? For example, your goals might vary from boosting employee satisfaction to attracting new hires, and so on. Customizable benefits give room for reaching your goals without neglecting what your workforce needs.
2. Conduct thorough research
The pool of available flexible benefits is huge. This is why it’s essential to narrow down your options to those that matter most to people. You can achieve that by asking your employees through surveys, group discussions, or 1:1 meetings. Then research the most famous types of benefits among employees, and check what your competitors might be providing.
3. Set a budget
Offering benefits can be costly for your organization. Thus, it’s necessary to decide on a specific budget from the very beginning before starting your flexible benefits program. The main questions you should ask during this process are how much you are capable of spending on the plan and how it will affect your bottom line.
4. Implement and evaluate your benefits plan
After completing the previous steps, it’s time to implement the plan, but also make sure to inform your employees about it. And then, train them on how to use benefits for their best interest. You can speed up this process by creating a simple guide that you can send via email or upload to your LMS so that employees can access it at any time.
Last but not least, you should evaluate your flexible benefits plan. You need to make sure it’s successful. To achieve that, send out employee surveys, collect data, review your budget, and analyze how this initiative affects your people and business.
Are flexible benefits a go-to solution for your organization?
Like all strategies, flexible benefits might not be a good fit for your business needs. Let’s examine below when this initiative might not be your best option:
- Few administrative resources and limited time: To deliver flexible benefits, you should ensure compliance with any federal, state, or local laws and regulations. The more flexible benefits you offer, the more time and resources you will need to review, implement, and evaluate them. Flexible benefits plans for small businesses, for example, might not be a viable solution as it could take time and money from other, more important projects. Or, there might not be enough people to manage such initiatives.
- Limited communication channels: Things are usually straightforward when you offer one benefit. But when you give employees multiple options, you should also expect multiple questions. If your HR team has different priorities or if you have limited real-time communication, those questions will likely be left unanswered. And if employees are unsure about how to use a benefit, they won’t probably use it at all.
Offering benefits that matter
All in all, flexible and customizable benefits can motivate, engage, and retain employees way more than ready-made solutions.
Designing, delivering, and tracking flexible custom benefits seems overwhelming. But with careful planning and consideration, you’ll be able to reap the amazing benefits they have to offer.