Product in focus: Voluntary benefits (2 July 2007)

Although voluntary benefits schemes can be set up and administered within an organisation's human resources department or benefits team, plans are more commonly administered using systems from a specialist voluntary benefits scheme provider.

Although schemes can be paper-based, many employers now run their voluntary benefits plan online. Paper-based schemes are predominantly used by employers that have a high number of staff who are not office based.

One of the benefits of using an online system is that it can be constantly updated and refreshed, while paper-based options can become quickly out-dated.

Employers can also choose the extent to which they wish to place their voluntary benefits schemes online. While some will opt for a basic website that tells employees how to take up a discount or provides links to product suppliers, others will go for a more sophisticated model that enables staff to purchase discounted products online. Going one step further, staff can also receive cashback on online purchases.

Voluntary benefit systems can also be used to produce regular reports to give employers feedback on the success of a scheme's launch and to monitor trends in employee spend so that they can see the value of the scheme for their workforce. But management information capabilities will vary between systems. Some, for example, have been criticised for not telling employers how much employees have spent through the scheme.

Employers can also integrate an online voluntary benefits scheme with existing systems, such as an organisation's intranet site using links and banner adverts.

Dorian Hannington, head of client implementation of You at Work adds that the development of technology around voluntary benefits is now enabling employers with some systems to target the communication of particular options contained in their schemes to specific groups of their workforce.

Product file: Voluntary benefits

What are voluntary benefits systems?
Third-party providers paid for by employers typically administer voluntary benefits schemes, manage supplier relationships and negotiate preferential deals for employees using online administration systems. These can be used to produce management information reports to enable employers to track the success of their scheme, for example, around staff spend.