Buyer's guide to voluntary benefits systems

Voluntary benefits are products and services that are sold to employees via the employer. Third-party suppliers usually allow the employer to offer the items at a discounted price. This can be particularly useful when budgets are tight because it is a good way to help employees' money go further.

Many employers offer these products and services through a cohesive, employer-branded scheme that is either set up and administered in-house by a firm's internal reward or benefits department, or outsourced using systems from a specialist voluntary benefits provider. A specialist provider will host the scheme and manage supplier relationships. In these cases, all the employer needs to pay for is the administration.

Paper-based systems

Plans can be paper-based, but most now operate online. Paper-based systems are typically used by employers that have a large number of staff who are not office-based.

Employers can also choose the extent to which they put their schemes online. At the most basic level, employers can simply opt for a website that sets out details of the offers available to staff and how to take them up, or links to the product suppliers. More sophisticated versions enable staff to buy discounted products and services directly online.

The ability to update online voluntary benefits systems in order to refresh a scheme or to accommodate new technology is one of the advantages of using this type of system compared with paper-based plans.

Online systems can also be used to integrate an employer's voluntary benefits scheme with other corporate IT systems, such as the organisation's intranet site.

Corporate identity

When considering what to incorporate into the ideal voluntary benefit system, Corrie Pope, product manager of You at Work, says, for starters, a website branded with an employer's corporate identity will reinforce the affiliation to its brand. "Employers need a range of products and services to meet the diverse needs of a workforce and give staff choice; the scheme needs to be constantly updated with new suppliers and offers to ensure it stays fresh; and it needs to be a product that understands their people, and targets them with relevant information and based on their interests and behaviour."

What are voluntary benefits systems?

These are the technology platforms used to run cohesive voluntary benefits plans. Systems are often run by third-party providers, and paid for by the employer. Systems can be paper-based or online, and allow the plan to be administered and communicated to staff. They can also be set up to process salary sacrifice benefits.

Source: Stephanie Spicer, Employee Benefits Magazine (July 2009). Back