This document discusses how flexible benefits ("flex") can address the needs of both employers and employees. Flex offers a menu of optional benefits that employees can choose from to customize their benefits packages. This allows employees to select benefits that best fit their individual needs while providing potential cost savings for employers and employees. Flex can be an effective talent retention strategy by helping businesses meet the diverse needs of their staff.

1. “Flex can address needs of both employers and employees”
By:
Anupriya Verma
10 PG (J) 06

2. Introduced by MNCs
Options provided by companies around taxable allowances
 Menu of optional benefits
Best fits individual’s needs
Customize their benefit packages
Potential of cost saving to both employers and employees
Compliant with Section 125 of the Internal Revenue Code

3. Optional
Benefits
Dental
Insurance
Disability
Vision Care
Insurance
Group-term
Child Care
Life Insurance

4. Most popular
flexible benefits
Lifestyle Benefits:
•Holidays
•Mobile phones
• Education
• Child care
• Transport
reimbursement
• Food vouchers
Medical Benefits:
•GP
•Maternal
•Dental
•Optical
Personal Insurance:
•Health screening
•Spa
•Fitness

5. How Flex
Works
Defined-contribution concept
Fixed number of flex credits
Based on their salary, marital status, number of dependents,
career
level, performance and/or tenure
 Use these credits to “buy” their benefits
Core-plus plans: Medical insurance, legally-required benefits,
long-
term disability insurance, and
retirement benefits
Modular plans: Holidays, transport reimbursement, food
vouchers
Dual income families - duplicate medical benefits
Employers control the allocations of the credits; also the price
tag on
the benefits
Provides employers with the mechanism to shift some future

6. Flex as a talent
retention strategy
Cost-effective ways to maximize the value
of benefits programs
 Valuable tool to satisfy employee needs
and ultimately assist in retaining talent
Helping the businesses to meet the needs
of a diverse staff
Attract and retain talent – driving force in
implementing Flex

7. Advantages of Flex
Benefit Schemes
Employees choose benefits to meet their needs, so value these more highly
Employers have a known fixed cost regardless of the benefits chosen
Employees appreciate the true value of their benefits and don't receive
unwanted
benefits
Employees have a sense of participation and control
Dual career couples avoid duplication of benefits
Employers are seen as responsive and caring
The benefits package aids recruitment and retention
Employers are better placed to demand flexible working practices

8. Challenges in
implementing Flex

9. Main
Reasons
•Costs (80%) and administration (79%) - two
main obstacles
•Uncertainty over where to find a qualified vendor
•Lack of market data (27%)
• More complicated to administer
•Record and maintain each employee's benefit
package
•Must maintain adequate communication
•Offer the opportunity to re-visit their benefit choices

10. Companies
Providing Flex
Phillips
ABN AMRO Bank
IBM
Various law firms

11. Conclusion
Flex is neither known or widely practised yet
Only 51 per cent of the respondents were aware of Flex
High attrition rates at BPOs, the administrative complexities outweigh
advantages of Flex
Encashable monthly awards and vacation leaves treated as manna
Forty-nine per cent of the respondents were willing to implement Flex
within a year
Companies can break-even in a year if Flex is deployed on a co-share
basis
Indian labour market has not yet matured enough, No one wants to be
first

12. Refere
nces
•Business World Issue Dated 10-16 March 2009
•http://www.referenceforbusiness.com/index.html
•http://www.mercer.com/referencecontent.htm?idContent=13182
•http://www.employeebenefits.co.uk/
•http://www.mercer.com/homepage.htm?siteLanguage=100