Employee benefits are normally defined as the extras that companies might choose to give their staff over their normal salary. The concept of flexible benefits became popular in the 1990s when the range of possible benefits to offer staff increased and companies noticed that all benefits did not appeal to everyone in the same way. Employers started to realise that a good pension was important to some, but others might be more motivated by things like health insurance or gym membership. Then there were also a few who really needed the salary more than anything else at that time, and so if given the chance would choose to take the money and no other benefits.
So at that point we learned that people are different and at different stages in their lives they have different priorities which cannot be satisfied by sweeping corporate decisions. So if you are trying to reward your staff by giving them extras on top of their salary, then it is best if you come up with ways of tailoring it to the individuals concerned.
Hence the introduction of flexible and voluntary employee benefits. The general idea is that the company arranges a spread of benefits such as pension, gym membership, health insurance, travel offers, retail vouchers or even charity donations. Then the employee gets a benefits pot as part of their salary package and they can choose if they take it all in income or divide up a proportion of it to get a range of benefits. Now within that there will be rules: these days they will have to put at least a minimum amount into a pension by law and there may be a maximum percentage of their salary you want to allow to be used in benefits. But often a company can often negotiate very good deals for benefits like health insurance because of the number of people it can bring into the deal, and even though these benefits are taxable it can still be well worthwhile for staff to take them through the company.
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