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Posted: 6th February 2020
Afternoon all. Does anyone have any experience or pointers on scrapping all of the above and just giving employees a lump sum to spend on what they like? Kind of like a car allowance but a benefits allowance? Not pension obviously.
If so, did you negotiate deals to achieve economies of scale for the employees or just leave them to it? Trying to work out what level of grief I may be letting myself in for!
My end in mind is to treat our people like adults, let them spend it on what suits their lifestyle rather than us prescribing a ton of stuff which really isn’t wanted.
I’m sure one of the other members will come back to you if they are doing anything in this space but from what we see – the innovation around reward is fairly limited (ie: 91% of companies have a traditional reward framework) – despite reward programmes rarely seen as a positive! (average net promoter score for rewards programmes is minus 15).
The two companies that we know of who are being more progressive in the area you outline are Netflix and Atlassian – they both take an approach that says – we aren’t going to prescribe how you spend your money – we will just pay you well – and you choose how you use it.
The other area where we are seeing more progression is in spot bonuses – where managers give an amount of money at the time they feel it’s been deserved, rather than an annual scheme. This obviously means that employees can choose what they do with it.
Sorry, but we haven’t come across any companies just giving a ‘benefits’ allowance – what normally happens is that it just gets incorporated into the salary (I did something like this when we removed car allowances and health care for managers at the BBC).
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