To stay competitive in the war for talent, South African organisations are adopting flexible benefits, allowing employees to choose rewards that enhance engagement and retention.
“Skilled workers recognise their value and are demanding more than a generic remuneration package with set benefits,” says Lindiwe Sebesho, Master Reward Specialist and Executive Committee Member at the South African Reward Association (SARA).
To make flexible benefits work, companies must understand the diverse needs of their employees and develop a tailored offering that best meets those needs.
How do flexible benefits work?
A well-structured flexible benefits scheme offers employees:
- A range of financial, retirement, health, wellness, and work-life benefits to choose from.
- The ability to select a mix of benefits that best suits their personal circumstances.
- The flexibility to adapt their benefits as their life situations change.
- The option to periodically adjust contributions to each benefit.
Ideally, employees should be well-informed and empowered to manage their benefits independently via a digital corporate portal, adjusting their mix or contributions as needed. However, practical constraints exist. Some benefits, such as retirement fund contributions and risk cover, may be legally restricted or have limited flexibility to ensure responsible financial outcomes. Cost considerations also come into play, as certain risk covers are negotiated based on defined risk profiles, making frequent membership changes impractical.
The scope of flexible benefits
Flexible benefits can be financial, material, environmental, or even emotional. Employers should avoid limiting themselves to traditional cost-to-company elements when designing their programmes. For instance:
- A tiered health insurance plan allows employees to tailor medical cover to their specific needs, potentially excluding services they don’t use, such as gym memberships.
- A variety of leave types and flexible working arrangements can attract employees seeking work-life balance, mental health support, or time for childcare.
- In-house wellness programmes, including mental health support and physical therapies, may appeal to those who prefer preventative healthcare.
Since listing every possible benefit isn’t practical, employers must engage with employees to identify the most valued options and continuously innovate to remain competitive.
“Whatever the benefits, the goal should be to create a comprehensive programme that caters to diverse needs, enhances well-being and job satisfaction, and ultimately drives greater workplace engagement and productivity,” says Sebesho.
Know your employees
A successful flexible benefits programme starts with understanding what employees truly want. Key considerations include:
- Demographics: Understand employees’ ages, family structures, and life stages to tailor benefits accordingly.
- Gender: Women may have different needs, such as support for single mothers juggling work and childcare.
- Life stage: Older employees might prioritise retirement contributions, while younger staff may value better medical aid and flexible work arrangements.
- Organisational level: Lower-level employees may prefer higher take-home pay, whereas senior staff may prioritise incentives and rewards.
- Financial viability: Employers must assess budgets and prioritise benefits that offer the most value while ensuring sustainability.
- Industry benchmarking & compliance: Staying competitive requires understanding what benefits are commonly offered in the industry and ensuring compliance with mandatory benefits regulations.
“Ultimately, it is up to each employer to innovate and build a comprehensive, competitive flexible benefits offering that attracts, engages, and retains top talent,” concludes Sebesho.
