Human Resource

1. “Flex can address needs of both employers and employees”
By:
Anupriya Verma
10 PG (J) 06

2. 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

3. Optional
Benefits
Dental
Insurance
Disability
Vision Care
Insurance
Group-term
Child Care
Life Insurance

4. 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

5. How Flex
Works
Defined-contribution concept
Fixed number of flex credits
Based on their salary, marital status, number of dependents,
career
level, performance and/or tenure
 Use these credits to “buy” their benefits
Core-plus plans: Medical insurance, legally-required benefits,
long-
term disability insurance, and
retirement benefits
Modular plans: Holidays, transport reimbursement, food
vouchers
Dual income families - duplicate medical benefits
Employers control the allocations of the credits; also the price
tag on
the benefits
Provides employers with the mechanism to shift some future

6. 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

7. 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

8. Challenges in
implementing Flex

9. Main
Reasons
•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

10. Companies
Providing Flex
Phillips
ABN AMRO Bank
IBM
Various law firms

11. Conclusion
Flex 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

12. Refere
nces
•Business World Issue Dated 10-16 March 2009
•http://www.referenceforbusiness.com/index.html
•http://www.mercer.com/referencecontent.htm?idContent=13182
•http://www.employeebenefits.co.uk/
•http://www.mercer.com/homepage.htm?siteLanguage=100