Why flexibility is key to the success of hybrid employee benefits

While deciding what the employee ‘perks’ package of the future will look like is still a work in progress, engaging staff and colleagues in the process is vital
Woman in yoga pose against concrete wall

Covid has shaken up our world, changing what we value and how and where we work. Both have had a knock-on effect on employee benefits, and many organisations are having to rethink their strategy with a greater focus on flexibility and staff wellbeing. 

The lack of clarity beyond these broad trends reflects the fact that many employers are either still in the experimentation and planning phase, or just beginning to introduce their hybrid-working models. Considerable numbers are expecting to go for a full rollout in September or the fourth quarter, even if some employees have already returned to the office at least part-time. 

But because “benefits don’t live in a void by themselves”, says Craig Williams, director of employee benefits at benefits consultancy Broadstone Financial Solutions, working out how best to use them to support company strategies “isn’t necessarily at the top of the priority list” just yet.

Robert Hicks, group HR director at employee engagement platform provider Reward Gateway, agrees that the situation is an evolving one. “While core requirements like pensions and health insurance won’t change, most HR leaders are finding their way in terms of longer-term considerations,” he says. 

This means that while many companies are likely to make short-term tweaks to their incentive packages in the near future, it’s unclear as yet what more permanent and broader shifts will be required in the longer term. To help define strategy though, Hicks recommends understanding just what employers are trying to achieve as an initial jumping-off point. 

Getting hygge with it

“Benefits need to do many things: match your employer proposition, relate to different employee life stages, enable people to be the best version of themselves at work, and cater to both short-term needs, such as holidays, and long-term ones, such as pensions,” Hicks says. “But they also need to recognise and reward the right behaviour to ensure it is aligned with your mission and values, so if you’re introducing hybrid working, having hybrid recognition and benefits is important.”

To illustrate the point, he indicates that as an office-first rather than remote-first employer, in which “all employees are hybrid as a default” if their role permits it, Reward Gateway has decided to retain soft benefits such as its onsite café and events. The aim is to encourage staff to see the office as a place to interact with colleagues in both a formal and informal way by creating a feeling of ‘hygge’ – the Danish concept of cosy contentment.

The more you engage with and talk to people, the more you’ll understand what’s important to them in terms of employee benefits… which helps support your retention strategy too

A similar stance was taken by media giant Bloomberg at the end of last year. It implemented a pandemic-specific policy of reimbursing employee travel costs to ensure access to safe commuting options when coming into the office, although the perk is unlikely to be included in the firm’s longer-term incentive plan, which is yet to be finalised.

Another key consideration in getting benefits propositions right, believes Roop Bhumbra, head of talent development at recruitment consultancy Hays UK and Ireland, is to ensure “engagement and consultation” with both colleagues and staff at all stages to gain useful input and feedback.

“Things will evolve over time but the more you engage with and talk to people, the more you’ll understand what’s important to them in terms of benefits and what’s working or not, which helps support your retention strategy too,” she says.

While this isn’t to say that workers should necessarily be given every benefit they desire, such an approach is likely to help in tweaking what is available to ensure it works more effectively. Clear communication is also likely to help in scrapping proposed changes if trials prove not to deliver.

A focus on flexibility

Given that a key challenge for employers moving to hybrid working en masse is that many are entering uncharted waters, one of the big themes coming to the fore is the need for flexibility. 

“The biggest trend we’ve seen is a focus on providing employees with flexibility of choice,” explains Broadstone’s Williams. “If you have myriad employees working in myriad different scenarios, a one-size-fits-all approach to benefits won’t fit – it never really did, but it’s now the case more than ever.”

Caroline Collyer, head of people at marketing technology supplier Bright, which had its “office-first” hybrid-working policy signed off at the start of August, agrees. She believes that the biggest single benefit offered by a hybrid approach is the introduction of flexible working for everyone whose job allows it. 

But beyond that, it is about adapting and personalising “the layer above basic benefits”. For example, Collyer points to the inappropriateness of providing subsidised or free membership of a gym close to the office if a significant proportion of staff are working remotely or in a hybrid way. To address this scenario, the company is now offering each employee a £15-a-month contribution towards some kind of wellness activity, ranging from online exercise classes to going to a spa.

“It’s about thinking how you can provide benefits that are flexible enough for each individual to take up and making them as adaptable as possible,” Collyer says.

Adapting to the future

Reward Gateway’s Hicks’ tack, meanwhile, is to offer a flexible palette of benefits that employees can choose from and adjust to their needs as their circumstances change. “The future of benefits is changing,” he says. “The future will be flexible, with benefits automation playing an important role in enabling offerings to be added or subtracted to create the best employee experience.”

But this scenario implies that online benefits portals will also need to become more flexible too, adds Williams, providing not just access to core and voluntary benefits but also non-cash ones too, such as employee recognition  and study and training packages.

Another potential approach, he says, is to introduce flexible benefits accounts, in which employees are given a set annual amount to spend on a range of defined options. Although take-up of this model has been low to date, Williams is already seeing increased interest and expects it to grow in popularity.

Less certain, however, is whether employers will be prepared to take flexibility a step further and change the entire make-up of their benefits structure. The idea here would be to enable staff to take a percentage of core benefits, such as pensions, so they could spend it as they see fit.

As for other important trends, the most significant relates to the burgeoning corporate focus on employee health and wellbeing. To this end, some 28% of employers are now considering whether to offer additional wellbeing days on top of existing annual leave, according to Hays’ research, with private healthcare packages likely to become a more widespread feature too.

Online fitness classes, sleep disorder services, eye-care plans and wearable technology to promote healthier lifestyles are likewise on the list of perks that are growing in popularity, says Williams, as is emergency care for both children and elderly relatives, particularly for office-based and hybrid workers.

But ultimately, as Hicks points out: “It’s hard to judge what the future will be when a lot of people are still just thinking about returning to the office, which means we don’t necessarily know what they’ll want. We need to create hybrid solutions that are as adaptable as employee needs, but we’re just finding our way to the starting line of a very long race.”