Sharing benefits
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Transcript of Sharing benefits
By:Anupriya Verma10 PG (J) 06
Sharing Benefits“Flex can address needs of both employers and employees”
FLEXIBLE BENEFITS / CAFETERIA PLANS
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
Dental Insurance
Vision Care
Group-term Life InsuranceChild Care
Disability Insurance
Optional Benefits
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
How Flex Works
Defined-contribution conceptFixed number of flex creditsBased on their salary, marital status, number of dependents, career level, performance and/or tenure Use these credits to “buy” their benefitsCore-plus plans: Medical insurance, legally-required benefits, long- term disability insurance, and retirement benefitsModular plans: Holidays, transport reimbursement, food vouchersDual income families - duplicate medical benefitsEmployers control the allocations of the credits; also the price tag on the benefitsProvides employers with the mechanism to shift some future cost increases to employees (cost-sharing basis)Empowering aspect sets it apart
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
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
Challenges in implementing Flex
•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
Main Reasons
Companies Providing Flex
Phillips
ABN AMRO Bank
IBM
Various law firms
ConclusionFlex 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
References
•Business World Issue Dated 10-16 March 2009
•http://www.referenceforbusiness.com/index.html
•http://www.mercer.com/referencecontent.htm?idContent=1318200
•http://www.employeebenefits.co.uk/
•http://www.mercer.com/homepage.htm?siteLanguage=100
THANK YOU