Flexible benefits employed ‘to reduce costs’

UK firms are increasingly using a flexible benefits scheme in order to keep their costs down during the recession, it has been revealed.

According to research by Mercer, almost one in four employers have introduced a flexible benefits scheme in their workplace, with 39 per cent stating their costs were now lower.

A further 45 per cent claimed their benefits expenses were unchanged, although 55 per cent of respondents admitted they felt such a scheme would increase their costs.

John Puddephatt, senior consultant at Mercer, said: “When put into practice, flex can be an effective vehicle for managing and reducing company costs. This is done by putting a limit on employer contributions to employees’ benefit packages.”

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He added that employees can choose to reduce their benefits levels or increase their own contributions as costs increase.

Mr Puddephatt concluded that the research suggested that flexible benefits should be prioritised higher as a way of successfully managing costs.

In order to control costs, SimplyWired.co.uk recently revealed the majority of employees it surveyed would rather receive a pay cut than face redundancies.