By its very nature, a voluntary benefits scheme that is set up and managed by an employer in-house, rather than by a third-party provider, will be unique to that organisation. When it comes to negotiating deals on products, however, there is no handy all-purpose formula, although employers that have been through the process will be able to offer some useful strategic pointers.
Fashion retailer Arcadia Group has just set up such a scheme. Melanie Hall, reward manager, says that when negotiating deals, employers should be clear about their objectives. "It should not be about cost savings, you've got to be realistic about the increase in in-house time and resources it will take."
Some providers say that Arcadia is bucking a trend as more and more employers are increasingly turning to them to run schemes and to take advantage of the potential increased buying power that their scale offers.
Desired perks
Once employers have established what they want to achieve, the next step is to find out what staff would like to see included in the scheme as it is pointless negotiating discounts on products that nobody wants. But while employers should consult with staff, they must be careful to ensure they don't overpromise what they can offer.
Before including a supplier in a scheme, employers need to establish that the organisation is reputable, financially sound and can deliver on service. Third-party providers may have the edge here, as they will have lots of past experience of dealing with suppliers. Dorian Hannington, head of client implementation at You at Work, says providers have much greater corporate checking facilities. "There is nothing like a testimonial [to find out what a supplier is like. We] can draw on the collective experience of 200 clients [so] our view is not skewed by one very good or one very bad experience."
It is also a good idea to consider including some smaller, particularly local, suppliers in the package. These organisations may not provide discounts for any other employers, so may be prepared to be more generous and creative in the deals they offer.
Even employers that buy their voluntary benefits scheme off-the-peg, or from a third-party provider may like the idea of including a few local benefits in their plan. Some providers are able to incorporate employers' existing local discounts into the schemes they manage. You at Work's Hannington says a number of employers have disparate arrangements they have almost forgotten about. "It's good to get them all into one place within a cohesive benefits message," he says.
Negotiating with third-party providers
Employers that decide to purchase a voluntary benefits plan from a third-party provider should shop around…
However, Dorian Hannington, head of client implementation at You at Work, says employers shouldn't select a package on price alone. "Many [employers] are often not comparing like for like," he says.
Author: Peta Hodge
Publisher: Employee Benefits
Date: 7 April 2008