Flexible benefits programmes continue to rise in popularity despite legislative and communication challenges, according to Aon Benefits & Trends Survey 2019

LONDON (25 July, 2019) – New research from Aon, a leading global professional services firm providing a broad range of risk, retirement and health solutions (NYSE: AON), shows that flexible benefits programmes continue to be popular within organisations, despite communication challenges and a potential impact from 2018’s OpRA regulations.

Aon’s Benefits and Trends Survey 2019 highlights that 45% of employers say they already have an online benefits or flex portal, with a further 20% saying they plan to introduce one within the next three years. This compares with last year’s 37% and 26%, respectively.

The Optional Remuneration Arrangement (OpRA) came into effect in April 2018 as part of the Finance Act 2017. It impacts both employers and employees, creating tax charges on a number of benefits, including group life assurance and group income protection. Employers were advised to understand the individual complexities impacting their business and people. These complexities meant many expected OpRA to negatively impact employer’s offering flexible benefit schemes.

The Aon survey also shows employers’ top three benefits strategy objectives. Given multiple choices, 89% of respondents say engagement is an objective, 80% say retention, and 70% say recruitment.

Of those with a flex scheme, 71% of employers say communicating with employees is the biggest challenge, while the next is dealing with benefit design changes (36%). Only 8% of employers feel their benefits strategy has been very successful, while 54% say it has been somewhat successful.

This year’s Benefits & Trends Survey also shows that the way organisations measure engagement has changed little since last year, with benefit selections and portal clicks being the most common measurement metrics (79% and 57% respectively).

Clare Sheridan, principal consultant at Aon, says:

“Flexible benefit schemes remain popular even though 2018’s legislation changes created complexities for employers. Flex’s popularity could be because the technology and ongoing management has become more accessible as costs have reduced, making it feasible for more companies to implement, particularly mid-sized firms employing 200-1000 people.

“However, employers are largely not able to understand if employees are truly engaging with the benefits offered. The results show that the main measures of success from an employee engagement perspective continue to be around employees actively selecting benefits or how many clicks are recorded on the portal. This is not understanding if you’ve won hearts and minds through behaviour change, or by receiving positive comments, or if you have made an emotional impact. Without this type of feedback, is it possible to tell how well the flex programme is working? Can an organisation really understand how benefits are impacting employees and ultimately business goals?"

Clare Sheridan continued:

“A big driver in this is communication. It remains employers’ biggest challenge, yet 70% of companies spend less than £5k on communication to aid understanding and to drive behaviour change.” 

Aon’s Benefits and Trends Survey, now in its ninth year, is formed from the responses of over 200 employers of all sizes, who work across a broad range of sectors, with 74% of them working internationally.

More information can be found in the Benefits and Trends Survey 2019.

Kay Phelps