Imre Vadasz Regional HR Director, Asia-Pacific, Middle East and Africa Sony
It is good to start by making sure that you have a very clear understanding of how the current policy works for employees. Then, with traditional benefit schemes, you would typically find that the utilisations of the different benefits are uneven among staff. Employees depending on their age, family situation, health conditions and interests utilise the various benefit options differently. Most employees do not utilise all of the options available to them. However, some staff may over use and even overspend beyond the budget.
It is important to understand how the actual spend looks against the set budget, and then to decide which one you want to use as the basis for defining the new framework. I believe the crucial element is to have clear and transparent communication with employees to clearly spell out the objective of the flexible scheme. This could, for example, be to recognise and satisfy the different situations, needs and preferences of each employee by empowering them to design their own benefit package within the given framework.
On the other hand, you also have to be transparent and highlight that this will also help the company to allocate benefits in an equal and fair way. Likewise, you should clearly demonstrate how the change impacts the individuals based on their past utilisation.
Another small technical point is to consider possible taxation changes to any of the benefits within the flexible scheme. HR should define and communicate the individual budget as a gross amount, therefore any future taxation change will not impact the total cost.