How do you motivate employees and align their behaviour with the needs of the business? As you’d expect, there is no easy answer – but total rewards tailored to your employee’s needs is one solution.

As part of this broader total rewards solution, a flex scheme, communicated effectively and supported by your organisation, can help your employees understand the value of the benefits the Company provides.  This, in turn, can help employees to be more engaged in – and by extension, more committed to – an organisation.
 
Flex lets employees take responsibility for the shape of their own reward package.  At the same time, it helps the business manage its spend on reward, staff turnover and processes.

When is flex a good idea?
Once one firm in a given industry sector introduces flex, their peers often follow. But it is important to have clear objectives about why you are introducing a scheme, and not just follow the crowd.

Key objectives might be to:

• Promote cultural change.
• Increase employee engagement.
• Improve staff recruitment and retention.
• Harmonise benefits and simplify administration.
• Manage benefit costs.
• Take advantage of tax and National Insurance efficiencies.

Analyse your current position
A key part of a successful flex process is establishing an accurate picture of current benefit arrangements, communication methods and, critically, employee attitudes/needs.  Involving employees at an early stage not only helps to determine the scheme design, but it is also the first step in explaining what flex is and why the organisation is introducing a scheme.  All this analysis will help to discover whether the introduction of flex will meet your objectives and, for example, it may also help to identify economies of scale by consolidating all members of a specific benefit under one provider.

Design the scheme 
Having established the objectives and the current situation, the scheme can be designed to address the issues the business faces. The right flex design will help to meet employees’ needs while controlling costs and addressing legislative and budgeting constraints. To develop the right design it is important to draw on the analysis of the business and of its employees.  

Putting it all in place
Once the scheme design has been finalised, the next challenge is to ensure it is understood and appreciated.  This can be broken down into three main areas:
1. Obtaining buy-in from your leadership group
2. Ensuring employees understand the mechanics of how flex operates
3. Then explaining why the final scheme design has been chosen. 
If the employees have already been engaged in the design through surveys or focus groups, this can be some of your most powerful communication. Employees will usually support what they help to build.

Communication tips:
The communication process at this point should help employees understand why flex was introduced, how flex works, and how best to take advantage of their flex scheme.

Any communication should be delivered in a way that is best suited to the organisation. If employees are comfortable with web-based communication, focus the campaign on the web. This is how most schemes are communicated now.  However, if during the analysis process you found that your audience prefers print; you can use magazines, newsletters, posters, and other print-based media to get your message across, in conjunction with any web based software necessary to record their choices.

The measure of success
Once the dust has settled it is time to ask the question – have we achieved what we set out to? 

The way you measure success will depend on the project’s objectives. You may want to check the National Insurance savings from salary sacrifice, or the reduction in staff turnover in the period since flex was introduced, or conduct follow-up focus groups with employees.

A successful implementation depends on the interplay of three key elements: the leadership’s support, the scheme design and the supporting communications. Done the right way, a well thought-out and communicated flex scheme can help to motivate employees and help them to understand the value of their reward package.

CASE STUDY: A firm wanted a flex scheme where all staff could benefit but we identified that junior staff did not have many benefits to trade except holiday.  In the business there was a concern that most new business initiatives tended to favour senior staff and did not always meet the needs of more junior employees.

The firm introduced a flex scheme which allowed employees to sell back non core medical insurance cover and holiday to release cash for other benefits. The scheme design was adapted to restrict senior employees from selling more than three days holiday and to allow junior employees to buy and sell up to five days.  This mitigated the cost impact to the firm of senior staff selling back unused holiday, while maximising the potential for junior employees to release additional cash.
As a result of demographic analysis and staff satisfaction surveys, the firm chose to offer travel insurance, dental insurance and gym membership as new benefits. The firm used its group buying power to negotiate attractive terms for these benefits, and the take up of each was above target.