SMEs still cautious about flexible benefits

May 25 2005 by Brian Amble Print This Article

A growing number of Britain's small firms are following the lead of big employers and offering offer flexible benefits to their staff. But many still don't understand the advantages.

A quarter of SMEs in the UK now offer now offer flexible benefits like home working and childcare vouchers, according to research by accountants KPMG.

Almost one in five -18 per cent – also said that they were planning to introduce them over the next 12 months.

But this still leaves three-quarters who do not operate such schemes, three-quarters of whom say that they have no plans to introduce one.

KPMG's Ian Hopkinson said that the statistics showed an interesting change in attitude towards flexible benefits.

"If the figures continue to rise in this way, we could have a situation where nearly half of middle market companies will be following the lead of larger companies and offering flexible benefit schemes within two to three years.

"This has to be good news for the UK workforce and is a sign that such schemes are more widely recognised as effective recruitment and retention tools."

Hopkinson blamed the diehard attitude of many employers on the myth that flexible working initiatives are costly or impractical for small firms. Some companies also confuse flexible benefits with flexible working hours, he added.

"Small businesses are bound to be more focused on their cost base and many simply perceive any kind of flexible benefit as a cost they cannot afford.

"In fact, what they do not realise is that by introducing flexible benefits such as childcare vouchers, extra holiday days, computer leasing and subsidised staff lunches, they can actually save money overall."

For example an employee who opts for childcare vouchers as a 'flexed' benefit will have the money directly deducted from their salary reducing the amount of National Insurance (NI) they pay. The employer also benefits as they save on the full employer NI payments so both the employee and the employer are saving money.

One employer who has adopted flexible benefits and seen a noticeable difference is SA Brain & Company Limited, the largest Independent Brewer in Wales, based in Cardiff.

HR Manager Debra Wood-Lawson said that since introducing flexible benefits in November 2004, the response from employees has been overwhelmingly positive.

"In an employment market such as ours in South Wales, we are not just competing with other breweries but with all other businesses in the area. We want our employees to feel that they benefit from the flex scheme which allows them to tailor the package to suit their individual needs and we hope that this will ultimately result in them viewing SA Brain as an employer of choice.

"Moving forward we are looking to increase the range of benefits within the scheme by utilising the savings achieved and this should become an increasingly important recruitment and retention tool."

Ian Hopkinson added: "With flexible working hours the clue is in the title. A company can be as flexible as they wish about working arrangements and manage what suits both them and their employees. It doesn't have to cost them anything."