Skip Navigation

Speak to a consultant on +44 (0)20 3457 0894

If budgets are squeezed how do you get the most from your pay budget? Part 2 of 3





Posted by Sarah Nash on 06 August 2019

If budgets are squeezed how do you get the most from your pay budget? Part 2 of 3

Benefits audit | Benefits intelligence | Flexible Benefits

Following on from the first part of this three-part series, which focused on creative bonus schemes, in part two we look at how flexible benefits can be used effectively to get more from a restricted pay budget.

An increasing number of organisations are offering flexible benefit schemes to their employees as part of their reward strategy. Flexible benefit schemes allow employees to tailor their benefits package in order to meet their personal requirements. Employees have the choice to retain their existing salary and simply vary the levels of benefits within their allowance, or adjust their salary up or down by taking fewer or more benefits respectively, depending on the offer.

Many organisations have always allowed a limited form of flexibility for just one or two benefits, but it is only recently that comprehensive flexible benefit schemes have started to become more common.

Why use flexible benefits?

A flexible benefit scheme can form an integral part of your reward strategy and should work in conjunction with your organisational goals and strategies. It has been found that introducing a flexible benefit scheme will increase the perceived value of the reward package offered to employees, at no additional cost to the organisation.

One of the key advantages of a flexible benefit scheme is the increased perceived value of the reward package offered to employees, but benefits provided by employers are at a known and fixed cost, irrespective of the choices made by employees, allowing employers to cap future costs. 

As these schemes can be tailored to fit large or small organisations, with different populations and backgrounds, by introducing a flexible benefits scheme, employers are seen to be more responsive to the needs of an increasingly diverse, demanding and ageing workforce.

However, flex-ben schemes are not without their limitations. Employers need to ensure they are within compliance with National Minimum Wage regulations, as by operating salary sacrifice schemes may reduce income tax and National Insurance levels.

The administration involved in implementing a flex bens scheme can be cumbersome and complex, and costs associated with the set up and implementation can be significant. There is also consideration needed regarding the communication and accessibility of the benefits, as the value of such schemes diminishes quickly if employees are not aware of it or cannot easily access it. Utilising available technology to host platforms and apps to deliver the benefits package to the user can help resolve this issue and enhance the employee experience.

Creative Flex-Ben Options

Flexible Benefit Reimbursement Model
Within a Flexible Benefit Reimbursement Model, an employee would have a pot of money to spend on benefits that are applicable just to them.  They could use it to fund a Spotify subscription, a cookery course, or anything that would make a difference to them.

Flexible Pay Cycles
Flexibility in terms of pay frequency is being considered by more employers, enabling staff to gain access to their pay as they earn it rather than waiting for a set payday. As the workforce becomes more and more flexible, a rigid monthly pay cycle doesn’t always suit every employee. By personalising the way that employees are paid and offering personalised rewards packages, employers will be taking more responsibility for the happiness and engagement of their workforce and will be offering employees a modern alternative to the traditional pay cycle.

Unlimited Holiday
As the name suggests, unlimited paid holiday allows an employee to take paid annual holiday whenever they wish to do so each year with no limit. Among the big brand names that have adopted a ‘limitless leave’ policy is Netflix, which has been operating this model since 2005, and Virgin, which made the move in 2014, along with organisations like HubSpot, LinkedIn and Glassdoor. The benefits of such policies are increased morale, greater productivity, and being able to provide a more attractive offer to potential employees. However, it is vital to ensure that expectations are managed around expected availability and timelines for approving leave, and also ensure that employees are taking their minimum holiday entitlement.

If you want to find out more about flexible benefits, or other clever ways you can make your pay budget go further, call Innecto on 020 3457 0894 or email

« Back to Insights