Seán Flynn reports on how employers are looking to improve the effectiveness of their benefits spend and what providers are doing to help them.
“There used to be barriers to flex, cost of set-up being the main one, but, because of technological advances, costs have started to come down so the attractiveness outweighs the disadvantages very heavily.”
Creating efficiencies
How believes advances in technology are also creating significant new efficiencies in the market – especially with regards to benefits outsourcing.
She said providers had been able to deliver the price reductions demanded through improved technology. How added: “Margins have been squeezed but not to the point of being uneconomical.”
Technology has also been important in helping employers engage with employees, as the value of a good benefits package is undermined if staff are not on board.
Duncan Howorth, chief executive of JLT UK Employees Benefits, said: “One of the problems in the past was the way in which benefits information was communicated. There would be a booklet on the pension scheme, a leaflet on this, and something else on that in the middle of the staff handbook.
“Technology can bring all this together. The employer gets more bang for his buck and the employee gets a one-stop shop.” The logical extension of this ‘one-stop shop’ approach is an employer’s benefits portal becoming a money and benefits supermarket.
This idea is being mooted by numerous providers and consultants in the form of ‘corporate wraps’ or ‘corporate platforms’ which are seen as flexible alternatives to traditional pension schemes.
Such wraps give employees access to a range of savings vehicles – usually including products such as pension schemes, ISAs and savings accounts – in addition to providing a comprehensive communications and guidance platform to help them plan for the future.
This corporate wrap approach is seen by many as a way for employees to take charge of their retirement. However, for some, this is not the way forward, at least not right now.
This would certainly appear to be the experience at JLT. “The discussion we have with our clients on this can be quite polarised,” said Howorth. “A very small number say: ‘That’s fine, I’m happy to go along with that’. Most are saying: ‘Hang on, that’s not my job. I don’t want my staff using company time to get rates for this or that and, more importantly, I don’t want it to distract from the benefits package I am funding’.”
Shopping around
Technology is not the only driver of change in a benefits space striving for efficiency. Employers are often looking to reduce costs by shopping around.
Consultants and providers alike acknowledge there is a certain amount of ‘playing both ends against the middle’ but pricing is not the only factor being taken into consideration. Value for money is often more of a concern than simply driving down rates.
