How Workplace Design Can Improve Employee Wellbeing

www.employeebenefits.co.uk February 2014 I £6.95

ALIGNING REWARD WITH BUSINESS STRATEGY SITTING PRETTY How workplace design can improve employee wellbeing

On schedule for re-franchising East Coast Mainline keeps reward on track

Being family-friendly can be child’s play Voluntary beneﬁ ts that help working parents

Message received and understood Removing jargon from pension communication

EBC_0214 1 16/01/2014 15:11 noweVouchers available to order online

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EB_0214 2 13/01/2014 15:36 @ www.employeebeneﬁ ts.co.uk CONTENTS

IN THIS ISSUE LEADER

Briefi ng 5 News digest 8 Workplaces are changing; Compliance 10 Events 13 Interactive 14 so should our strategies The big question 17 Up close and personal 18 Mark Goodlake of Tullow Oil The place where we work every day has a big impact on how we feel Cover story 22 about work, how we relate to our colleagues and, ultimately, how The design and structure of a workplace productive we are. can have a signifi cant effect on employee Over the years, I have worked mostly in offi ces and have had only a couple of public-facing health and wellbeing roles across a counter. I have never worked in a manufacturing or construction environment. So Benefi ts tax 29 my experience of workplaces is narrowly confi ned to the poky, dusty offi ce, the open-plan offi ce, How to save on tax and national insurance the corporate soulless offi ce, having my own offi ce and, on odd occasions, the home offi ce. I have never managed to work in one of those offi ces with slides, pods, pool tables or artifi cial turf. Voluntary benefi ts 32 I expect most people reading this will also have had a varied, but largely offi ce-based career Family-friendly benefi ts will pay off experience. So what is it that makes one offi ce so much more conducive to productivity, Pensions 37 engagement and wellbeing than another? We set our associate editor, Clare Bettelley, the task of Keep communications free of jargon fi nding out in our cover story, Creature comforts (page 22). You will not fi nd any examples of sick Group risk 40 building syndrome in the great case studies she found. The value of a relevant life policy It is not just offi ces that are changing. Demographics and the “I have never Employer profi le 42 economy are also changing our colleagues, the employees we serve worked in an East Coast Mainline speeds ahead with reward and the clients, consultants and suppliers we interact with. They work different patterns, juggle different jobs, may be older than our offi ce with Buyer’s guides 49 colleagues of 10 years ago, and there may be more women in the I Bikes-for-work schemes slides, pods, I Flexible benefi ts technology line-up (hopefully in more senior roles). pool tables or And these changes will continue. artifi cial turf” Contact directory 53 As benefi ts professionals, we should be trying to match our Key service providers medium- and longer-term benefi ts strategies with these shifts, too. Confessions 54 Which is why I want to promote the idea of you attending Employee Benefi ts Connect on 27 February in London. We will spend the day looking forward and doing some inspirational thinking across the entire benefi ts area, with the help of some fantastic speakers and sponsors. The day will be topped off with the great Professor Richard Scase delving into ‘The future of the workplace’. If you are a benefi ts, reward or HR manager, you can attend for free, for all or part of the day, but you will need to book the sessions you want to attend to ensure a seat: http://www. employeebenefi tsconnect.co.uk/en/conference/programme.aspx Hope to see many of you there. Debi O’Donovan, Editor Follow on Twitter @DebiODonovan

Editor Debi O’Donovan [email protected] Deputy editor Debbie Lovewell-Tuck Social media [email protected] Associate editor Clare Bettelley clare.bettelley@centaur. co.uk Features editor Tynan Barton [email protected] Senior reporter Jennifer Paterson [email protected] Reporter Robert Crawford robert.crawford@centaur. co.uk Art editor Deborah George, [email protected] Sub editor Bob Wells Follow us on Twitter.com for Contributor Danby Bloch Business development managers Jessica Garland jessica.garland@ breaking news: centaur.co.uk Lisa-Jane Parker [email protected] Event director Juliette Losardo twitter.com/employeebenefi t In London on 27 February bit.ly/zHPM9j [email protected] Account manager Richard York [email protected] Event manager Lyndsey Urquhart Director, Centaur Business Publishing Phil Hayne phil. [email protected] Offi ce manager/PA to director Alice Gerard-Pearse alice.gerard- [email protected] Head of audience marketing Steph Boukhari steph.boukhari@centaur. Like us on Facebook: Look for our co.uk Group production manager Wendy Goodbun [email protected] ‘Employee Benefi ts’ page Cover photo Jacko

Employee Benefi ts Subscriptions 020 7292 3719 Wells Point, 79 Wells Street, London W1T 3QN Editorial queries/press releases email Join our Linkedin group by In New York on 25 March bit.ly/199bKCr Tel 020 7970 4000 [email protected] searching EmployeeBenefi ts Fax 020 7943 8094 Web www.employeebenefi ts.co.uk

www.employeebeneﬁ ts.co.uk I February 2014 I 3

EB_0214 03 20/01/2014 17:11 Take your pick from our benefits solutions

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EB_0214 4 20/01/2014 15:11 @ www.employeebeneﬁ ts.co.uk/news BRIEFING

REWARD Ikea uses pension contributions as bonus

Robert Crawford a fi ve-year levy. there is spare money, then put it “It’s not a common into a pension. It’s not a bad place to More organisations could consider approach and it could put it and I suspect Ikea has taken performance-related pension be a cost issue. It’s advantage of that thought.” contributions as a way of giving cheaper to pay Tack! follows the home furnishing staff a bonus for reaching targets. somebody a bonus in retailer’s introduction of an annual Ikea Group became one of the pension contributions performance-related bonus fi rst employers to do this with the than a monetary scheme. Based on positive sales launch its reward programme Tack! bonus because growth at Ikea, the bonus could see late last year. Through the scheme, employers do not have an employee earning £6.99 an hour Ikea will pay €100 million (£83.6 to pay tax and national pocket an extra £1,535. million) in pension contributions to Ikea is rewarding staff that have fi ve years’ service insurance on it.” Macro added: “It’s not just linking reward employees with at least fi ve But Macro to pension payments on years’ service, assuming pre-agreed have worked for the organisation for questioned whether a performance but if certain targets global sales targets are reached. fi ve years. So 4,000 are eligible for pension bonus will be valued. “Would are met, then there is a whole range All 136,000 staff in 26 countries, the fi rst pay-out, in September staff prefer cash in their hand than a of thank-yous, which will make it including 7,200 in the UK and 2014, of an estimated £500 to their pension contribution? Probably,” he more of a benefi t to staff. Ireland, have access to the scheme, . Retirement Income Scheme, part of said. “But things have changed over “Perhaps we will start to see Paul Macro, head of UK defi ned a Legal and General master trust. the past few years with auto- employers link global performance contribution retirement at Mercer, Helen Gilchrist, senior consultant enrolment, and now pensions are a to staff incentives.” said: “It’s not [an arrangement] that at Towers Watson, said: “More bigger thing for employees. @ is particularly common.” organisations could consider it and “There is a growing recognition Read also Ikea to make one-off pension contribution at: bit.ly/LvNXaw More than 55% of Ikea’s UK staff it does encourage retention with that money needs to be put in and if

PAY & BONUSES Mixed messages in pay increase prospects for 2014

Jennifer Paterson intend to raise pay by more than executive offi cers did not have a RPI, while 39% intend to raise pay base salary increase in 2013. More than one-third (42%) of by less than RPI. Deborah Hargreaves, director of employers are planning a pay rise This trend towards pay the High Pay Centre, said: “[Chief in line with the retail prices index stagnation is also evident among executives] are seeing huge (RPI) in 2014, according to the very senior staff. Consultancy EY’s increases in bonuses and share Confederation of British Industry/ research Into the light: a look back awards, so it’s disingenuous to say Accenture Employment trends on 2013 and insights into the new they are not getting a rise at all. survey, published in December. landscape of executive reward, “If the economy goes on Higher bonuses are expected in the City But the same report found that also published in December, found recovering, we’re going to see just 7% of its 325 respondents that 28% of FTSE 250 chief rises in share prices and, again, increased the size of its some big share awards this year.” employees’ pay pot from just over For instance, KPMG’s annual £17 million in 2012 to just over £37 Pay statistics report for 2013, also published in million last year. December, showed that average Meanwhile, bonuses for senior 42% of employers are planning a Bonuses for senior staff in the partner pay had risen by 23%, employees in the City are pay rise in line with the retail prices City are expected to increase by from £580,000 to £713,000, and expected to increase by 44% in index (RPI) in 2014, while 39% 44% in 2014. that its bonus pool across all 2014, according to research by intend to raise pay below RPI. employees rose by 20% in 2013, fi nancial services recruitment UK chief executives earn from £61 million to £73 million. fi rm Astbury Marsden, published 28% of FTSE 250 chief executive more in two days than the Private equity investment fi rm in December. offi cers did not receive a base average UK employee earns in a Terra Firma, which published its salary increase in 2013. whole year. accounts for the year ending 31 @ Read more pay news at: bit.ly/Ks5Erg March 2013 in January, also

www.employeebeneﬁ ts.co.uk I February 2014 I 5

EB_0214 5 20/01/2014 16:53 EB_0214 6 20/01/2014 15:39 @ www.employeebeneﬁ ts.co.uk/news BRIEFING

COMMUNICATION Demand grows for mobile access to perks

Jennifer Paterson development at Shilling, said: “All the Primark staff are also work we’re being asked to do is ideal targets for mobile- Flexible-working patterns are vital around mobile platforms and based communications. to the UK economy, according to mobile-responsive sites, and most Thurley-Ratcliff, who works 97% of respondents to the of our employer clients expect that with Primark, said: “Its staff Confederation of British Industry/ to be standard. We are now all have smartphones Accenture Employment trends including text messaging for because they’re aged under survey, published in December. pension websites.” 25, so that’s a really good But the growth of such working Flexible communication methods way to get to them.” patterns means employers must be are also needed by employers with But Edenred’s Benefi ts more creative in communicating diverse workforces, whether spread More staff want mobile access to their benefi ts insight: trends for benefi ts in benefi ts to increasingly mobile out geographically or with assorted 2014 research, published in workforces, for example using age and gender profi les. is out and about, so staff are not in January, found that just 14% of mobile-enabled technology and Karen Edwards, business front of screens all day and don’t respondents ranked mobile SMS text messaging. development director at Personal have access to the internet. They channels as one of their three Alex Thurley-Ratcliff, head of Group, said: “A workforce, for might have a mobile-enabled priorities in the year ahead. innovation and business example in a logistics organisation, application they can access during However, many employers are the day or via home computers.” striving to meet employees’ needs. East Coast Mainline, which has In late 2013, Care UK launched an What employers are doing more than 3,000 staff spread online benefi ts portal for its staff, between Inverness and London, has charity Trident Reach launched a Care UK launched a kiosk for staff to the end of 2013. introduced smartphone technology touchscreen kiosk for staff to mobile-based benefi ts access fi nancial and portal in December 2013. wellbeing benefi ts. East Coast Mainline for its guards and drivers, who need access some benefi ts, and IBM introduced smartphone up-to-date operational information. launched online pension reports. Trident Reach IBM launched online technology for its The smartphones can also be used @ Read a longer version of this story launched a touchscreen pensions reports at guards and drivers. to send SMS texts about various at: bit.ly/1muTo8b benefi ts and reward developments.

PENSIONS CAREERS Employers aim to tackle DB pension defi cits Academy offers expert training Jennifer Paterson of pension schemes are looking at using methods such as buy-ins, dynamic de-risking, where they buy-outs and longevity swaps to Debbie Lovewell-Tuck The defi cits of defi ned benefi t (DB) are monitoring market conditions de-risk their DB schemes. For pension schemes are continuing to or funding levels, and then trying instance, AstraZeneca agreed a Reward and benefi ts managers can grow, according to research to act quickly to capture a good longevity swap for its DB pension gain valuable career knowledge published by Mercer in January. piece of experience by making in December, hedging against the from 2014’s training courses from Its Pensions risk survey found changes based on those factors. longevity risk of about 10,000 of the Employee Benefi ts Academy. that the accounting defi cit for “They are either doing it in their the scheme’s current pensioners. A joint venture between FTSE 350 fi rms stood at £97 billion own way or through an automated In January, JLT Group completed Employee Benefi ts and Total Reward at 31 December 2013, compared mechanism. If the funding level a further £85 million buy-in Academy, the Academy provides with £72 billion at 31 reaches a certain contract with Prudential for its expert training and this year’s December 2012. point, for example, £500 million DB scheme, while courses are open for registration. Employers are they might reduce gardening product manufacturer Benefi ts courses take place on 7-11 using various their allocation to Hozelock appointed Aon Hewitt to July and 20-24 October, and methods to fund, growth assets by a provide actuarial, investment and compensation courses on 24-28 de-risk and manage certain level, providing pensions management services March, 23-27 June, 15-19 September these defi cits. it doesn’t impact on for its £50 million DB scheme. and 24-28 November. Ali Teyyebi, head their expected of DB risk in the UK contribution rates.” @ Read a longer version of this story @ Find out more about the Employee at: Benefi ts Academy at: at Mercer, said: “A lot AstraZeneca: longevity swap Employers are also bit.ly/1h9eJQt bit.ly/1mkHASM

www.employeebeneﬁ ts.co.uk I February 2014 I 7

EB_0214 7 20/01/2014 16:11 NEWS DIGEST @ Follow the bit.ly url to read the full news story

This month’s trends

million in 2012 to £35.4 million in 2013, is due to increased activity and revenue for the private equity investment ﬁ rm. http://bit.ly/1gSOWMN

METTIS AEROSPACE staff call off pay strike The engine and airframe Ikea: one-off pension contribution manufacturer offered employees an improved pay offer of 2.5%, up PENSIONS from the 2% previously offered. IKEA to make one-off €100m http://bit.ly/1hCPUQo pension contribution It is part of the Swedish home KPMG increases bonus pool furnishing retailer’s new reward to £73 million programme, Tack!, which aims to The professional services fi rm’s reward employees with more than annual report for 2013 showed it fi ve years’ service. had increased its annual bonus pool http://bit.ly/KaaV5S by 20%, from £61 million in 2012 to £73 million in 2013. REEVES & CO streamlines http://bit.ly/1ipMSMW a festive thank-you in December, responsibility and society update pension for auto-enrolment after a busy year that included showed that more than 21,000 The accountancy fi rm is replacing STAFF MOTIVATION opening a new offi ce and employees took part in its three two defi ned contribution schemes INTERACT INTRANET awards expanding into the US market. or fi ve-year sharesave plans in with a group personal pension to staff with iPad Minis http://bit.ly/KNSNjG 2013, up from the 18,000 staff that comply with staging on 1 February. It gave all its 62 employees in the participated in 2012. http://bit.ly/1hCNlOa UK, US and Australia an iPad Mini as SOUTHEASTERN matches http://bit.ly/Kac6Cq staff’s charity fundraising NORTEL agrees £23m After a team of employees from EASYJET switches share payment into UK pension the railway organisation raised plan administrators The defunct telecoms organisation nearly £5,400 for charity, this The airline, which has awarded its has reached the agreement to amount was matched by their share scheme contract to Equiniti settle claims against relevant Nortel employer, bringing the fundraising following a tender process, offers Networks parties in the US. 76% effort to £10,800. its 8,000 employees access to http://bit.ly/1evNEoA expect their workplace http://bit.ly/1eKtx6x UK and international sharesave plans, UK and international share PAY & BONUSES pension to be their main SHARE SCHEMES incentive plans and executive TERRA FIRMA doubles staff retirement income SAINSBURY’S increases share plans. pay pot to £35 million http://bit.ly/1gGoLsR sharesave take-up to 21,000 http://bit.ly/1ei0ysp The increase in wages, from £17.1 The retailer’s corporate BENEFITS COMMUNICATIONS NEW PRODUCT ROUND-UP IBM launches online pension reports G Hargreaves Lansdown offer employers greater aims to cut private medical intended retirement date. The new reports, which were rolls out iPad app fl exibility and choice, has insurance claims costs by http://bit.ly/1bZ8ppO The application, HL Live, been updated to meet the ensuring employees are allows members of its needs of organisations referred quickly. G Now: Pensions teams workplace savings platform staging in 2014. http://bit.ly/1a6i3dK up with Staffcare to view pensions and other http://bit.ly/1aofBiZ The partnership between is savings via their tablet. G Aspire to Retire rolls for auto-enrolment http://bit.ly/1eJ5WoI G Musculoskeletal health out retirement portal administration and the pathway launched The portal, iAspire, is distribution of member G Friends Life updates The pathway, which was designed to help staff begin communications for auto-enrolment product launched by Axa PPP planning for retirement up participating employers. The product, which aims to Healthcare on 1 January, to fi ve years before their http://bit.ly/Kf4y1l IBM: new online pension reports

8 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 8 20/01/2014 15:33 @ Register to receive all the latest news via email at www.employeebeneﬁ ts.co.uk

CISCO reduces healthcare PEOPLE MOVES The Body Shop costs by 8.5% Since it added open referral to its Sparrow lands at Carillion launches global healthcare trust, which has been Carillion has HR brand provided by Bupa for eight years, in 59% appointed Trevor April 2012, the organisation has of respondents intend to Sparrow head of In 2013, the retailer’s seen cost savings of 8.5%. increase their benefi ts reward. He was international HR team http://bit.ly/1goGsMB previously head of reviewed culture, HR brand provision in 2014 international pensions and and HR products, covering 15 BP AND MICROSOFT access http://bit.ly/1j3q3Bw benefi ts at Lloyds Banking Group. countries and 8,000 staff. wellbeing scheme Ricoh Europe appoints Nind As part of the review, three The Healthy for Life programme, Ricoh Europe has teams across the HR function provided by the employers’ facilities appointed Donna held brainstorming sessions management partner, Aramark, a computer during the working day. Nind reward director on the subjects. The exercise combines food and nutrition with http://bit.ly/1aMW1cU for Europe, Middle culminated in The Body Shop exercise, mental health and East and Africa Oscars, which handed out prevention of illness. TRIDENT REACH offers (EMEA). She joins after eight awards to staff. years at CSC. http://bit.ly/1lYOk8Z fi nancial wellbeing kiosk http://bit.ly/1ei25yK The touch-screen kiosk, which Pair join Dixons Retail VOLUNTARY BENEFITS provides access to a range of Dixons Retail has appointed Toria CARE UK launches online products and services, such as McCahill group reward manager redesigned with communication benefi ts portal healthcare policies and discounts and Nina Platt reward manager. provider Shilling, received 650% The portal aims to ensure the from BHSF, aims to help employees McCahill was HR manager at more views between 2 October and health and social care provider’s access their benefi ts more easily. Samsung’s Cambridge Solution Centre and Platt joins from 2 November 2013 than all the views benefi ts package is accessible to all http://bit.ly/1amhnkW Philips, where her roles have in the previous 12 months. its 22,000 staff, particularly those included HR manager, and reward http://bit.ly/1djSQzx who do not have regular access to NSK extends voluntary manager, UK and Ireland. benefi ts scheme HEALTH & WELLBEING The programme, provided by Olley moves to Astellas AIRBUS streamlines Edenred, was initially launched in Astellas Pharma health cash plans 2011 at the manufacturer’s Durham Europe has The aircraft manufacturer launched site, but has now been extended to appointed Kate Olley a single employee-paid health 590 additional employees at its senior director of cash plan for its 10,000 UK Nottinghamshire site. reward. Her previous jobs include consultant at Towers employees to streamline a range http://bit.ly/JMRctI Perrin and Arthur Andersen (now of legacy plans from a number of both part of Towers Watson), and different suppliers. COMPANY CARS & FLEET European head of reward at ABN http://bit.ly/1dMAsKo Airbus: health cash plans streamlined NHS TRUSTS renew AMRO Bank. car schemes KEY RESEARCH ROUND-UP CPC Drive, the NHS North of AIB banks on Kanabe England Commercial Procurement Allied Irish Bank has appointed Alison Chief execs earn workers’ annual pay in two days Collaborative’s fl eet management service, has reappointed Tusker to Kanabe reward and UK chief executives earned more money in the fi rst two working days of provide lease cars and salary pensions project 2014 than the average employee will earn in the whole year, according to sacrifi ce car schemes. manager. Previously, research by think-tank the High Pay Centre. http://bit.ly/1m6TxM2 she was head of employee benefi ts and policy for Europe, http://bit.ly/1gTXUtb EMEA, at Google. Vodafone calls in Dainty Vodafone has 28% 39% 24% appointed Gemma of FTSE 350 CEOs of respondents are claim a higher Dainty UK benefi ts did not receive a planning a pay rise salary would boost manager. She was base pay increase below the retail their workplace previously regional in 2013 prices index motivation total reward lead, EMEA, at Lockheed Martin. http://bit.ly/19i6iCI http://bit.ly/1ktldPI http://bit.ly/1eKtRlW CPC Drive: reappointed Tusker for fl eet

www.employeebeneﬁ ts.co.uk I February 2014 I 9

EB_0214 9 20/01/2014 15:33 TAX AND COMPLIANCE @ www.employeebeneﬁ ts.co.uk/compliance

The latest information on legislation and tax issues affecting employee benefi ts, including tax-effi cient ‘quick wins’ on benefi ts and expenses, and employee dismissal after long-term sickness absence

CASE LAW ADVICE FROM THE EXPERTS Decision clariﬁ es dismissal Shawn Healy is a tax principal at BDO. after long-term absence

Quick wins on benefi ts Robert Crawford On appeal, the case came before Scotland’s Inner House of and expenses identifi ed Clarifi cation has been given on the Court of Session, which held The Offi ce of Tax Simplifi cation (OTS) has how employers should handle that the tribunal had not identifi ed quick wins to simplify the the dismissal of an employee approached the issue with the administration of benefi ts and expenses, following an extended period of correct tests in mind. It said the nine of which went live in January. absence due to ill-health. critical question for an employer HM Revenue and Customs (HMRC) is to In the case of BS v Dundee is whether it can be expected to allow reimbursements by employees of fuel City Council, BS had been off Sickness absence: call for balanced view wait any longer before deciding used for private motoring or in a company sick for 272 days with stress to dismiss an employee. car made after the end of the tax year, but and depression. During his absence, he was signed This will be a balancing exercise that involves before 6 July, to be taken into account off sick by his GP and the occupational health consideration of: the availability of temporary through online adjustments. Also, assessment services for eight weeks at a time. cover; whether the employee has exhausted sick employers will again be able to use form In September 2009, after meeting BS, the pay; the administrative and occupational health P46 when a company car is replaced. council decided he was unlikely to return to work costs, and the size and resources of the employer. HMRC is publishing new guidance on: for the foreseeable future and dismissed him on Charlie Barnes, solicitor at Shoosmiths, said: qualifying subsistence expenses and the grounds of capability. “This decision suggests employers can take a allowable expenses; the availability of BS appealed unsuccessfully and brought an medical report at face value in terms of the pay-as-you-earn settlement agreements unfair dismissal claim. The Employment Tribunal prognosis when considering dismissal on the (PSAs) and dispensations and the online ruled in his favour, basing its fi ndings on the grounds of ill-health, but should balance the views application process; and covering overseas council not conducting a thorough investigation of the expert against the views of the employee.” and non-domiciled employees within a PSA into his health, stating that it should have obtained a further medical report about the prospect of BS @ For a longer version of this story, go to: and standard items (and related conditions) bit.ly/1mkqTaj that can qualify for dispensations. returning to work before deciding to dismiss him. HMRC is allowing employers to adjust benefi ts returned on P11Ds and resubmit these online. The OTS has suggested HMRC LEGISLATION publish a list of employments where it is customary to get tax-free accommodation and a list of benefi ts it considers trivial. Check up on rule changes affecting benefi ts It is unlikely, however, that HMRC will A number of changes affecting G The Offi ce for Tax Simplifi cation’s G From April 2014, the monthly want to set a precedent by agreeing to employee benefi ts came into effect nine ‘quick wins’, which aim to investment limits for sharesave will publish any fi nancial limits it uses. in January, and further changes are simplify the tax effi ciencies on double from £250 to £500, and the HMRC has confi rmed it is considering due to come into force in April: benefi ts and expenses, came into value of shares an employee can allowing voluntary payrolling of benefi ts in G Changes to the Transfer of effect in January: bit.ly/1aZKeIi. acquire with tax advantages place of reporting on P11D, with HMRC and Undertakings (Protection of These include: employers being able through share incentive plans (Sips) the OTS exploring what changes can be Employment) (Tupe) regulations take to make online adjustments to will rise by £300 a year to £1,800 phased in alongside any legislative changes. effect on 31 January. Employers will account for reimbursements by staff for partnership shares and to Let’s hope the OTS is equally successful be able to renegotiate the terms and of fuel used for private motoring or in £3,600 for free shares: bit.ly/JyZkhr as its focus turns to employee travel and conditions of employees when a company car; employers able to G The basic state pension will rise subsistence issues. transferring them between use form P46 when a car is replaced; by £2.95 a week from April 2014. businesses, provided the overall and improved guidance on the @ To read more advice from tax experts, go to: change is no less favourable to the availability of pay-as-you-earn @ For details of tax and legislation bit.ly/RYrvb6 changes, go to: bit.ly/1mkqTaj employee: bit.ly/19s0bvJ settlement agreements.

10 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 10 20/01/2014 15:29 EB_0214 11 13/01/2014 15:25 Your employees are your most valuable asset Support their health and wellbeing with a Denplan dental plan

See us on stand number C10 at

Dental care is much more than having a brighter smile. Are you interested to find out how improving oral health can have a positive impact on employee wellbeing? Then visit our Denplan hosted EB connect roundtable. The discussion will be led by Denplan’s Chief Dental Officer, Dr Roger Matthews, and will give the opportunity to delve deeper into the value of dental within the workplace. Places on the roundtable are free but with limited availability.

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EB_0214 12 17/01/2014 14:24 EVENTS

It’s not too late to book your place for Employee Beneﬁ ts Connect 2014 at the Park Plaza Westminster Bridge in London on 27 February, or for the event’s US launch in New York on 25 March

Sessions to focus Industry leaders are sure to inspire on global reward HR, reward and benefi ts managers can Attendance is free for HR and benefi ts join benefi ts industry leaders for a day of practitioners, and free places in Global reward and benefi ts sessions will be ideas, innovation and inspiration at conference sessions can be booked in on offer for attendees at Employee Benefi ts Employee Benefi ts Connect. The one-day advance (advisable for popular sessions Connect 2014. conference with workshops and and the opening keynote) at: http://www. Experienced international benefi ts and exhibition takes place on 27 February at employeebenefi tsconnect.co.uk/en/ reward directors will speak on topics such as: London’s Park Plaza Westminster Bridge. conference/programme.aspx ‘How to obtain value with a global workforce when budgets are strained’; ‘What to expect in global mobility compliance’; ‘Global wellness initiatives: long-term employee commitment to a healthy lifestyle’; and ‘Implementing a global recognition scheme: how can they operate internationally?’ G To book your place at some, or all, of these sessions, go to: http://www. employeebenefi tsconnect.co.uk/en/ conference/programme.aspx

Keynote speaker will look at workplace’s future

The theme throughout this year’s Employee Benefi ts Connect is about looking ahead and preparing for the future. To inspire attendees, the closing keynote The Big Apple beckons session, ‘Future of the workplace’, will be delivered Employee Benefi ts Connect will by Professor Richard Scase (pictured left), a launch in New York, US on 25 leading authority on leadership, futurology, March 2014. The programme is innovation and corporate change. bespoke for US-based benefi ts He will discuss how global economic changes and rewards managers. will impact on high-performing workplaces. Register to attend at: http:// G To book your free place at this session, go to: totallyexpat.com/new-york- http://www.employeebenefi tsconnect.co.uk/en/ eb-connect/ conference/programme.aspx

@ www.employeebeneﬁ ts.co.uk/events

www.employeebeneﬁ ts.co.uk I February 2014 I 13

EB_0214 13 20/01/2014 11:05 INTERACTIVE

@ email us at [email protected] with your views

LOVEWELL'S LOGIC LINKEDIN DISCUSSION BOARD Martin Schillig, HR business these changes to both economies of Europe come out of partner at sports betting management and employees?” recession in 2014. This will see the Debbie Lovewell-Tuck organisation Tipico, posed these recruitment market pick up, looks at the advantages three questions: Robert Holman, group reward making it necessary for your of a ‘helping’ culture in “Which external environmental @ manager at international retail reward offer to be competitive and the workplace changes will affect your reward franchise operator MH refreshed. practice or strategy for 2014? Alshaya, responded: “The “As for communication, How will these affect your most inﬂ uential external keep to the golden rule Good deeds will pay reward practice or strategy? environmental change will of simplicity, whatever How will you communicate be the speed at which the you do.” dividends all round

While surfi ng the internet recently, I came across blogs from individuals around the world who had challenged themselves to 100 Club do one good deed every day for a year. column Although the same time parameters do MatthewM Webb looks at pension strategy not apply, this sense of altruism is extending into the workplace. In the fi rst In association with few weeks of this year alone, we have reported on several large employers’ The joy of DC investment loss charitable or green initiatives linked to their benefi ts or reward schemes. The defi ned contribution (DC) fed the line that positive Reinsurer Swiss Re extended its pension investment industry returns are good and an fi nancial support for seven more years for contains some of the best increasing unit price means a staff globally who cut their personal brains and actuarial talent higher-value DC pot. activity is low in most plans. carbon dioxide footprint, say by installing spending their time, and our But this is only important at So, pound cost averaging is energy-effi cient home appliances or money, creating new retirement. Until then, it is far important to DC investors and switching to a bicycle from a car. strategies and tactics to more to the advantage of the greater understanding of this And Virgin Media partnered with Evans maximise investment return. member if the unit price is low concept would lead to far Cycles on a programme in which a But is positive return really or falling, so that for the given better outcomes. percentage of initial staff orders in its the zenith of DC investing? In contribution, he or she will buy For DC members who are bikes-for-work scheme is donated to buy the long term, perhaps, but in more units than would looking at their account cycling equipment for disability charity the short term, especially in otherwise be the case. balances, if they have gone Scope’s special schools and colleges. the early years of DC build-up, Known as pound cost down, don’t despair. Instead, Initiatives such as these mean there is a strong case to averaging, this is probably the rejoice that you will buy more employees cannot use the excuse that suggest a DC investor should most important, yet the most units at the lower price, so they would do more to help others/the look for funds with a misunderstood, concept for DC when the price goes up, you environment/charity but do not have the decreasing unit price. Why? investors. A tick shape on a will have more units to sell. time to do so. Advantages for employers Consider the fi rst rule of graph that shows unit price Of course, no one can time include the positive impact on employees’ investing: buy low, sell high. If over time is the best shape to the markets perfectly, but for mental wellbeing and stress levels. members understood this, aim for; much better, for DC members in the growth The Mental Health Foundation says they would not be concerned, example, than a steadily rising phase, volatility of prices is helping others promotes positive changes especially in their 20s and 30s, line. In numerical terms, the generally a good thing. It is in the brain; brings a sense of belonging; about their fund value difference can be substantial. certainly not in the National can improve confi dence, happiness and decreasing, but would actually Behavioural fi nance shows Employment Savings Trust's optimism; and helps to keep things in embrace falling unit prices. us that most investors lack book of investing, but is worth perspective, as well as reducing stress. Buy low, sell high is the the nerve to buy low and sell refl ecting on. Maybe extending the challenge of doing investor’s mantra, but does high. But a DC investor is not a one good deed a day for a year to the the average DC member think typical investor; the time workplace isn’t such a bad idea. or behave this way? No, and horizon can be 40-plus years, Matthew Webb is head of whose fault is this? Probably regular contributions are made international benefi ts at Thomson Reuters the industry’s. Members are over this period, and switching Follow Debbie Lovewell-Tuck on Twitter: @DebbieLovewell The 100 Club comprises industry leading lights who have contributed to Employee Benefi ts

14 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 14 20/01/2014 15:42 Follow us on Twitter: twitter.com/employeebeneﬁ t

TOP 10 MOST VISITED From the frontline STORIES ON THE WEB* Duncan Brown discusses the need to give employees a pay rise

Economic sense and social sensibility

‘Give Britain a pay rise.’ Not a surprising new compensation review, published in November BP and Microsoft access wellbeing year sentiment to hear from the GMB trade 2013, shows that executive director pay in FTSE 1 scheme union, perhaps, or Labour leader Ed Miliband. 100 fi rms rose by 14% in the past year to an Court rules on disability and At the end of December 2013, the GMB average of £2.1 million. As political economist 2 work-related stress released research pointing to a 14% national Will Hutton observes, the International decline in real wages since in 2008, and an Monetary Fund and the Organisation for How to motivate lower-paid staff average 20% fall in London. General secretary Economic Co-operation and Development have 3 in high-pay cultures Paul Kenny said: “People deserve a decent pay both pointed out that “growing inequality rise after years of attacks on living standards.” menaces vigorous societies”. Cisco cuts healthcare costs But when the union’s views are echoed by But Cridland’s thinking is primarily economic 4 by 8.5% the head of the Confederation of British sense. Pay always matters, but in 2014 it is Industry (CBI), John Cridland, in his annual particularly important, with our economic Confessions of a benefi ts manager: message, then you start to think this really recovery hopefully taking hold and an election 5 Focusing on employee could be a signifi cant shift in sentiment. just round the corner in 2015, one which all communications Cridland’s support for “better pay and more parties agree will depend Average gender pay gap among HR opportunities for all employees” and addressing on more people feeling “Opinion polls 6 professionals hits £8,844 the situation of “far too many people stuck in they are sharing in suggest the minimum-wage jobs” contrasted with his plea growing prosperity. The Body Shop launches global to political leaders three months earlier to put vast majority Opinion polls suggest the 7 HR brand the brakes on an early election commitment to do not feel vast majority do not feel a living wage, or a higher national minimum better off. Government to raise auto- wage, to solve the “cost-of-living crisis”. better off” As The Guardian’s 8 enrolment threshold Cridland argued then that it risked economics editor, Larry prematurely curtailing the recovery in Elliott, explains, the essential factor not yet in Shared parental leave could employment, which has seen unemployment fall place to drive business investment is rising real 9 create issues to about 7%, its lowest level since 2009. wages. He says: “[Employers] need to grasp one His change of heart seems to be part simple message: rising incomes equals rising Communication strategies to economic sense and part social sensibility. consumption equals rising investment equals 10 engage staff with pensions auto-enrolment Cridland is sensitive to the swift recovery in far higher chances of a sustained recovery. Give corporate profi ts and bonus-driven executive Britain a pay rise.” pay rising with it, reminding bosses that all their Or as Elinor puts it in Jane Austen’s Sense *Ranked by the number of page impressions from employees should share in the recovery through and Sensibility: “I wish, as well as everyone else, 14 December 2013 to 14 January 2014 mechanisms such as share schemes and to be perfectly happy.” profi t-sharing plans, as well as giving “a helping hand to young people”. THE MONTH IN NUMBERS Incomes Data Services’ latest Executive Follow Duncan on Twitter: @duncanbhr cubic metres: The legal minimum amount 11 of space employers must provide to all TWEETS OF THE MONTH employees (see page 22)

WPRLawyers – Interesting staff members with this post by #SalarySacrifi ce Percentage per employee @ piece @EmployeeBenefi t on @EmployeeBenefi t bit.ly/19iep2o 17.85% that East Coast Mainline attitudes to working savings and Diane_FPtweets – Too contributes to its pension plan (see page 42) retirement income bit.ly/1dTLSw9 KamwellLtd – Need more @ familiar, even in 2014. @ @ info on salary sacrifi ce car EmployeeBenefi t: Confessions of a workinstitute – Learn to schemes? Look no further: bit.ly/ benefi ts manager: Focusing on Minimum cost per employee of @ motivate your lower-paid JyevY1 Thanks! @EmployeeBenefi t employee comms £4 providing fl exible benefi ts technology (see page 51)

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EB_0214 15 20/01/2014 15:42 EB_0214 16 15/01/2014 15:42 @ www.employeebeneﬁ ts.co.uk/comments THE BIG QUESTION

This month’s big question: Will the increase in share plan limits boost scheme numbers?

We were pleased with the While most governments As the voice of the measures announced in in Europe have been employee share the Chancellor’s Autumn cutting back on tax- ownership industry, IFS Statement to double the advantaged share Proshare has lobbied the sharesave allowance for schemes, the UK’s Treasury to raise the employees from this April, increase in tax-free limits savings limits in line with because encouraging staff is a pleasant contrast. infl ation, refl ecting the to have a greater share in Given that all three views of the members and the success of their major political parties their employers that the employer is always a positive step. favour wider share ownership, the tax relief is organisation represents. At Sainsbury’s, we know that a major part of unlikely to be reversed soon, which should give So we were delighted to learn that the success of the business is down to the organisations confi dence to plan schemes. Chancellor George Osborne is to increase 157,000 employees working in our stores, But there are a number of reasons why we investment limits on sharesave plans to £500 a depots and offi ces. may not see an immediate increase. Firstly, month and on share incentive plans (Sips) to We believe in giving our employees and their these share schemes do have a cost and £1,800 a month. families the opportunity to own a real stake in organisations will need to budget for this Although no one can say for certain whether the business, so their interests are genuinely before agreeing new plans. Secondly, those increasing the limits will immediately result in aligned to the organisation’s performance. organisations that already scale back sharesave more organisations launching employee share In 2011 we celebrated the 30th anniversary when applications exceed their allocation are schemes this year, what, in effect, the of sharesave, one of our all-employee share unlikely to take advantage of the new limits. campaign has done is to create a more fertile plans, and now more than 40,000 employees Thirdly, some employers with a large proportion ground for employers that are considering hold shares in Sainsbury’s. We know that of lower-paid staff may be wary of launching a launching employee share plans. sharing success leads to a more motivated scheme in which it is likely that only executives By doubling the savings limits, employee workforce and long-term loyalty, and now we can take advantage of the increased limits. share ownership, as a viable savings tool, are seeing our approach pay off. A share incentive plan (Sip), which involves will become a lot more attractive to a In our recent corporate responsibility share ownership rather than options, gives tax greater diversity of employees and sizes update, we reported that more than 21,000 and national insurance (NI) relief on of organisation. employees took up our sharesave offer this contributions. It is more costly to administer The benefi ts of employee share ownership year, a record-breaking fi gure. In addition, than sharesave and its complexity has deterred are well known and the recent example set we have committed to increase the number many organisations. However, the increased by Sainsbury’s (see column far left) shows of employees with shares in our business amount that can be put into such a plan will growing numbers of employees are joining by 25% by 2020 as part of our 20x20 give organisations a larger NI saving. their employer’s share schemes. sustainability plan. Of course, some organisations have a larger The savings limits are due to rise from April It’s all part of our pledge to make Sainsbury’s proportion of higher-than-average earners that 2014, so it will be a few months before we see a great place to work, giving people a stake in may be interested in using the additional relief. the effects start to come into fruition. the business and allowing them to save. Over the longer term, I believe a steady Nonetheless, IFS Proshare is confi dent that We work hard to engage our employees with stream of employers will again revisit share once the increases come into force, the simple, clear messages to promote the schemes, and the tax relief available is now too demand already shown by Sainsbury’s opportunities for share ownership, as we know big for large and medium-sized enterprises to employees will be replicated in other the complexity can be a barrier to some. ignore in the medium term. organisations as 2014 progresses.

Angie Risley is group HR director at Sainsbury’s Jeremy Mindell is director of tax and share John Collison is head of employee share scheme advisory ﬁ rm Primondell ownership at IFS Proshare

Do you agree with these views? Join the discussion by searching for the EmployeeBeneﬁ ts group on

www.employeebeneﬁ ts.co.uk I February 2014 I 17

EB_0214 17 17/01/2014 17:07 UP CLOSE AND PERSONAL @ www.employeebeneﬁ ts.co.uk/jobs

Fair-minded approach oils the wheels for reward Mark Goodlake, group reward manager at Tullow Oil, says reward professionals need a well-developed sense of what is fair and consistent, balancing the needs of staff and management when deciding on a strategy

ark Goodlake, group Goodlake began his career as professional is to take that reward manager at an HR generalist before moving independent view on decisions and Tullow Oil, attributes his into reward. “I worked in talent think about what is right for the Q&A Mcareer success to his management for a little while, and business and what is fair, rather experience in a broad range of HR also performance management than just a quick fi x. That can make How would you describe disciplines, and the lessons that he and as a generalist,” he says. “That you a little unpopular at times, but yourself? has learnt along the way. helps me see things from the HR it is important in this discipline.” According to my 360-degree For example, at Astellas perspective, rather than just the Global reward nous is becoming performance review, I’m pretty Pharmaceuticals, where he was reward perspective.” increasingly important for reward much analytical through and senior director reward, Europe, the professionals as global employers through. On the positive side, Middle East and Africa (EMEA), Varied experience strive to harmonise their benefi ts, most of the time I can remain before joining Tullow Oil last Goodlake says his varied he says. At Astellas, Goodlake and fairly calm in the job and I can see month, he learnt that reward helps experience enables him to see his team worked to align all things from a different angle in to boost employee engagement. how reward relates to other aspects of the global employer’s terms of problem-solving. Being “At Astellas, we didn’t do business areas. But breadth of reward package with its business an analytical person, the downside anything unless it related to experience is not enough, he says. principles. “We had reward scans, is that I’m a bit of a worrier. organisational values and Reward professionals also need a whereby we went into each of the strategies, so there was a well-developed sense of what is countries and compared the Who is your role model? joined-up approach,” he says. “That fair and consistent, particularly practices against the principles Outside of work, I’m quite inspired was a big learning curve for me. when dealing with confl icting and then suggested any necessary by people who succeed against For example, we did a lot on opinions. “Sometimes, reward is improvements. That way, we got the odds, so I’ve read a lot about health-related benefi ts and that about what management wants consistency without having the polar explorers, such as [Sir was part of our journey towards and what the employee wants,” he same policy in every country.” Ernest] Shackleton and [Robert being an employer of choice in the says. “Sometimes a section of the Goodlake is proud of the global Falcon] Scott. I always enjoy their healthcare sector. So you could business wants to do something reward review he worked on at stories of how they’ve battled see there was a rationale to having quite different and inconsistent. Astellas, not least because it against enormous odds to win. these benefi ts.”ts. “TheThe mark of a reward taught him how to take a fl exible approach to managing reward in Do you read management books? different countries. I read management books when However, he says one of the I’ve got a particular problem to CURRICULUM VITAE most important lessons a reward solve. I’m currently reading Your professional must remember is to fi rst 100 days: how to make constantly review and check that maximum impact in your new 2014-present group reward performance and reward, KPMG they have understood their leadership role, by Niamh manager, Tullow Oil employer’s business needs and HR O’Keeffe, published by Financial 1993-1995 international HR strategy, to ensure the reward Times Series in October 2011. I 2003-2013 senior director reward, manager, Glaxo approach supports these aims. like practical books that give a EMEA, Astellas Pharmaceuticals “That’s the fundamental route roadmap of how to do something. 1989-1993 senior compensation of it all,” he says. “Reward doesn’t 1999-2003 European partner, and benefi ts offi cer, Glaxo exist in a vacuum. We have to performance and reward, Mercer choose the most appropriate Tynan Barton is 1988-1989 personnel offi cer, reward approach for the business, features editor at 1995-1999 principal consultant, Glaxo (now GlaxoSmithKline) and the need, not just what other Employee Benefi ts people are doing.” Tynan Barton

18 I FbFebruary 20120144 I www.employeebeneﬁwwwemployeebeneﬁ ts.co.ukts co uk

EB_0214 18 17/01/2014 17:04 Motivate, reward and say thank you with Sainsbury’s

• 1000s of choices • Redeemable at over 1000 Sainsbury’s stores nationwide • Reloadable Gift Cards, can be managed online • Quick and easy to order • Over 20 years of experience working alongside businesses Call us 0870 0101351 Email us [email protected] Visit us sainsburysbusinessdirect.co.uk

EB_0214 19 13/01/2014 15:21 CONFERENCE

ROUNDTABLES

NETWORKING

EXHIBITION

CONFERENCE PROGR DON’T MISS OUT - BOOK YOUR CONFERENCE AND ROUND G OPENING KEYNOTE: Top CEO’s and industry experts discuss the future and changes of benefits G Oli Husemeyer, International Benefits Project Manager at Google, tackles workplace stress and why it should be taken seriously G Sara Harper-Holton, HR Director at Weight Watchers UK, tells us how to integrate auto-enrolment into HR strategy Visit employeebenefitsconnect.co.uk to view the full programme

EB_0214 20 16/01/2014 11:13 GRAMME LIVE! NDTABLE SESSIONS TODAY! G Janet Mckenzie, Reward Manager at B&Q, talks about how to keep your employees happy on a tight budget G Paul Bissell, Head of Reward at Vodafone UK, talks EVP’s for the future: How to motivate and engage employees G CLOSING KEYNOTE: Futorologist, Professor Richard Scase gives insight into how to create a workplace of the future

EB_0214 21 16/01/2014 11:13 COVER STORY CREATURE COMFORTS The design and structure of a workplace can have a signiﬁ cant effect on the health and wellbeing of employees, says Clare Bettelley

ffi ce design and set-up can directly “It’s a very open-plan offi ce and everyone affect employees’ health and can talk to each other and work as a team, and wellbeing. For example, the design because it has so much glass, it never feels like features of Long Barn Studio, the a normal, constricted offi ce, which, with our Bedfordshire home of Nicolas Tye long hours, makes me feel a lot more relaxed.” OArchitects, help new recruit Katie Wilson to Similarly, at Great Ormond Street Hospital’s remain calm at work. new Morgan Stanley Clinical Building in London, The offi ce is essentially a glass box with staff have welcomed design features such as larch-clad casing at each end, which means it is fl oor-to-ceiling windows and art, which they fl ooded with natural daylight through most of say have cut stress levels (see box, page 25). employees’ working day (see box, page 26). Lindsey Dugdill, professor in public health at “It’s a really nice offi ce to work in, purely the University of Salford, says employers because it’s so open,” says Wilson, who joined should try to replicate hospital design features, the organisation as head of business particularly those in children’s hospitals, development at the end of 2013. because of the positive impact they can have

EMPLOYERS’ LEGAL REQUIREMENTS FOR WORKPLACE MANAGEMENT

WELFARE PROVISIONS open windows or via a SAFETY PROVISIONS G Toilets. mechanical ventilation G A properly maintained G Hand basins with soap system, such as air work area, particularly with and towels or a hand-drier. conditioning. regard to work equipment, c G Drinking water. G A minimum temperature such as machinery, which Even quite simple G A place to store clothing of 16°C, or 13°C for physical must be serviced and things can have and somewhere for environments, such as a maintained properly. employees to change/ ﬁ tness studio in a gym. G Floors and exit roots that quite a pronounced lockers. G Lighting that suits the are clean and clear from effect on the way G Somewhere for work being carried out. obstruction. employees to rest/eat food, G Enough room and space G Windows that can be staff feel” which could be at their desk. for each employee; a rule of opened and cleaned safely, Lindsey Dugdill, University of Salford thumb is a minimum of 11 with glass or transparent HEALTH PROVISIONS cubic metres per employee. areas protected or made of G A supply of fresh, clean air G Clean workplaces with safety materials, depending from outside, either from bins and a cleaner. on where they are.

Source: Institution of Occupational Safety and Health

22 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 22 16/01/2014 17:18 Viewpoint

Doctor Noeleen Doherty is a senior research fellow at Cranﬁ eld School of Management

Physical, mental and social health and wellbeing in the workplace are key considerations for both employers and employees. The creation and maintenance of safe physical and positive work environments are mutually dependent. Physical high-hazard contexts, such as in the construction and engineering industries, tend to attract high-profi le publicity because the outcomes of poor practices can be potentially fatal; think Chernobyl or Piper Alpha. But in situations where the physical risks could be perceived as less serious, such as offi ce or retail environments, the consequences may not seem so signifi cant. However, it is critical to avoid complacency. In such low-hazard environments, slips, trips, falls and ‘near misses’ are actually quite common and can be costly to staff in terms of personal injury, and to employers and society in terms of fi nancial costs. There are regulations in place to address environmental issues, such as noise or air pollution, but there is a need to move away from a mindset of compliance and cost to one of mindfulness of the factors that create and maintain a safe, healthy working environment. Shared responsibility and shared leadership help to create a healthy work environment. All employees have a role to play in ensuring good practice is part of everyday organisational life. This involves keeping staff aware of risks, helping them to develop skills in risk assessment and risk management, but importantly enabling employees to prioritise and not become risk-bound. Employers must enable and support staff to take responsibility for health and safety, facilitating problem-solving to address issues that arise and encouraging employee involvement in maintaining a safe working environment. Only then can they successfully create a workplace that supports staff health and wellbeing. Jacko

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EB_0214 23 16/01/2014 17:18 EB_0214 24 13/01/2014 15:38 COVER STORY

CASE STUDY GREAT ORMOND STREET HOSPITAL

New building helps to cut stress levels

Staff health and wellbeing was a because working with sick key aim in the design of the children and families can be very Morgan Stanley Clinical Building, tiring and demanding emotionally.” one of two new buildings that will Trussler says research was form the Mittal Children’s Medical conducted on the impact of art on Centre at Great Ormond Street staff wellbeing and morale, which Hospital (GOSH) in London. resulted in selected pieces being The building, which opened in displayed in staff areas. 2012, has seven ﬂ oors, one of Staff were engaged in the which is the staff restaurant, building’s design process from an which has wall-to-ceiling glazed early stage, and worked closely windows and runs along the entire with the architects to achieve length of the building. their desired workplace. Unlike the traditional hospital “We’ve tried to get staff, from set-up, there is a staff room away an early stage, to think about how to help employees get to know anecdotal feedback suggests from the ward area, with views they were going to work the new space. employees particularly like the over Coram’s Fields, an urban park, differently in the building, and also Trussler adds: “So it wasn’t just space and the light. and separate stairs and lifts to how they were going to use the the redevelopment team telling “There’s much more space at prevent staff having to walk amount of space they were going staff [how to use the space]; they bedsides to provide care, and through the hospital to enter and to get,” says Trussler. needed to feel they owned their more privacy for staff to speak leave the building. “Some of them had come from space. Part of the transformation with patients and parents, so Joanne Trussler, clinical director small, cramped wards, and that was about staff understanding that’s helped their wellbeing at GOSH, says: “The thinking meant quite a change for them, that they wouldn’t just move in because they’re not as stressed,” behind it was that we allow staff psychologically and physically.” and do exactly what they did says Trussler. to get away from their work, Two-dimensional plans of the before; they have to feel that “Also, anecdotally, stress levels because they’re often working building’s design were used to they own that area.” in our intensive care space have 12-hour shifts. It is important for encourage a new way of thinking GOSH is now working on a reduced because the new layout them to feel they’ve got some about it ahead of its completion. post-project evaluation to assess is very different to the previous privacy and some quality time After staff moved in, team games, the new building’s impact on staff one, which was very open-plan whenever they take their break, such as treasure hunts, were used health and wellbeing, but and had a lot of machinery noise.”

on staff health and wellbeing. And such employer paints a wall, can have quite a help employers to tackle staff health issues features need not be expensive. pronounced effect on the way staff feel.” such as obesity, she says. “Natural light and coloured walls, from a Dugdill also advocates greenery, be it in the In her book Enhancing building performance, wellbeing perspective, can make staff feel form of plants in and around a building or, published in 2012, Dugdill proposed the better,” says Dugdill. “Certain colours, like green where possible, a garden, because of its concept of ‘physical activity-friendly’ buildings and blue, are seen to be less stressful, so even calming effects on staff. that encourage staff to make ‘involuntary quite simple things, such as the colour an Maintaining offi ce air quality is one of a range actions’ around the offi ce during their working of legal requirements for employers (see box, day, rather than ‘voluntary’ movements, such IF YOU READ NOTHING ELSE, page 22), and plants can improve air quality by as structured gym attendance. READ THIS. . . absorbing toxins and emitting oxygen, enabling staff to breathe more easily and reducing the Use the stairs > Good offi ce design can boost employee side-effects of humidity, such as headaches. For example, a workplace with a central health and wellbeing. Other health risks for employers to manage staircase can encourage staff to use the stairs include obesity, which is having an increasing to access other parts of the building, rather > But corporate culture is just as important effect on sickness absence levels. than take the lift. and must be driven from chief executives down through organisations. Dugdill says: “There is a big body of evidence Standing desks, the height of which showing how risky a sedentary lifestyle is. The employees can adjust depending on whether > Workplaces that encourage physical way an offi ce is designed can stimulate, or they want to sit or stand to work, and treadmill activity can help combat disorders mitigate against, staff moving about and not desks can also encourage staff to be active. such as obesity. being sat down for too long.” Dugdill questions the need for staff to Offi ces that facilitate physical activity can remain seated while working. “When we think

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EB_0214 25 16/01/2014 17:18 COVER STORY @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/

CASE STUDY NICOLAS TYE ARCHITECTS c It’s really about changing A healthier offi ce environment by design behaviour, and that takes The environmentally-friendly cooling system, which achieve an offi ce that more effort than moving design specifi cations of provides comfort cooling in promotes staff health and the furniture around” Nicolas Tye Architects’ summer and pre-heats cool wellbeing. “Employers should Monica Parker, Morgan Lovell Bedfordshire headquarters, air coming from outside in start by looking at the key Long Barn Studio, make it an the winter. The air is fi ltered, aspects of design by enviably healthy offi ce space providing a healthy fresh air zooming in and zooming out inclusive approach can only work in in which to work. balance in the studio. [on details]. Zoom-in detail is The glass box-shaped Non-toxic lacquers and the keyboards employees organisations with the right corporate culture. building’s stone fl ooring and organic white paint are used will use; zoom out is the air “Offi ce design is an output of an offi ce the employer’s footwear-free throughout the building, and they breathe. culture and it’s only as good as the behaviour offi ce policy (staff wear workstations feature “Employers should make that is embedded within that space, so culture slippers) helps to minimise ergonomic chairs with sure all aspects provide the trumps design,” she says. the effect of allergies. lumbar support. right holistic goal, which will “It can be misleading to say employers need The offi ce optimises its air Nicolas Tye, owner of the pay dividends to the working to build more active offi ces. Employers need to quality with a mechanical business, says it is easy to environment in any offi ce.” build more active cultures, so it’s really about changing behaviour, and that takes more effort than moving the furniture around.” For example, organisations need to create a culture in which staff are encouraged to move around the workplace and use breakout areas, instead of a culture that assumes staff taking time away from their desks are avoiding work. Take breaks Employers can also offer health and wellbeing incentives to encourage desk-based staff to take breaks from work. For example, Mitie Group hosts monthly on-site massages for employees at its 24-hour call centres to help ensure they take breaks to keep them relaxed. Staff chill-out areas, often furnished with beanbags, drink and snack vending machines as well as pool tables, also feature in some workplaces to enable employees to switch off from work during their breaks. Some employers also use staff rooms and breakout areas to stage health and wellbeing initiatives, and some host benefi ts fairs that about technology, more and more employees “The most important thing is not a treadmill promote workplace health and wellbeing. are moving around on their tablets and phones,” desk or a particular kind of feature, but Morgan Lovell’s Parker adds: “There are she says. “Staff work from all kinds of spaces employees having the ability to recognise their workplaces with space that never gets used now, and this offers a real opportunity to move own identity and the space in which they work,” because the corporate culture doesn’t away from sitting down at desks all the time.” he says. “Employees need some say in how encourage and facilitate that. It’s about More cost-effective tweaks to a workplace their workspace looks; that’s most important.” employers creating an offi ce design that’s include the strategic positioning of recycling Executives and senior managers can aligned with their culture of wellbeing.” EB bins and kitchen areas so that staff have to encourage workspace ownership by involving walk a distance to use them. staff in the design and set-up of the space. For But Craig Knight, chartered occupational employers in established buildings, this may Clare Bettelley is psychologist and honorary research fellow at simply involve giving employees input into the associate editor of the University of Exeter, says giving employees design of their workstation furniture or offi ce Employee Benefi ts ownership of their workspace is more facilities such as the staff kitchen or restaurant. important than any quirky design feature when But Monica Parker, workplace director at @ Read also Employee Benefi ts Awards 2013: Best healthcare and wellbeing benefi ts at: bit.ly/1aBE191 it comes to boosting health and wellbeing. offi ce designer Morgan Lovell, says such an

26 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 26 16/01/2014 17:18 EB_0214 27 15/01/2014 09:55 You're invited to the Garden Party of the Year

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EB_0214 28 15/01/2014 14:51 BENEFITS TAX MAKE PERKS LESS TAXING Some employee beneﬁ ts can offer staff and employers the added advantage of tax and national insurance savings. Robert Crawford explains how to cash in

mployee benefi ts not only help to attract Tax-effi cient benefi ts offered through a national insurance is due and the employer will and retain staff, but some perks, such as salary sacrifi ce arrangement are exempt from not have to pay NI contributions on the portion pensions, company cars and bikes for income tax, employer’s NI and employee’s NI. of salary that the employee sacrifi ces. Ework, offer tax and national insurance This is so because a benefi t offered in this way Here is a rundown of the employee benefi ts (NI) advantages for employees and employers. reduces an employee’s pay, so less tax and that offer tax and NI effi ciencies.

PENSIONS no contributions after 5 April. HEALTHCARE An occupational pension scheme, There is also an annual A tax exemption is to be registered with HM Revenue and allowance on tax-relieved pension introduced on sums of up to Customs (HMRC), offers several savings, capped at £50,000 for £500 paid by employers for tax advantages: 2013/14. Employer and employee medical treatment for staff An employer’s contributions can contributions above the limit are who have been on long-term be deducted against its profi ts for taxed at the highest rate the sick leave. It will apply to corporation tax purposes and are employee pays: 20%, 40% or 45%. recommendations by the not taxed as benefi ts as regards The annual limit will be reduced to government’s Health and employee’s or employer’s NI. (for group personal pension or £40,000 from 2014. Work Assessment and Employee’s contributions, up to stakeholder schemes) before No income tax or capital gains Advisory Service and extends a maximum of 100% of earnings, being applied to provide taxable tax is payable on income arising to employer-arranged are allowed as a deduction against benefi ts. If the excess is taken as from investments in a self- occupational health services. the employee’s taxable income. a lump sum, it is taxed at 55%. invested personal pension (Sipp). The aim is to help staff return There is a lifetime limit on any But if an employee has built up Pension plan members receive employee’s tax-exempt pension a big pension pot, they can apply tax relief on their contributions, to work. The government will savings. This is set at £1.5 million for protection from the lifetime subject to HMRC limits and tax introduce the legislation in the for 2013/14, reducing to £1.25 allowance, but must do this by 5 status. Up to 25% of members’ Finance Bill 2014. million from 6 April 2014. Any sum April 2014. This will allow them to pension funds may be taken as a above this limit is subject to a maintain a lifetime allowance of tax-free cash sum at retirement, lifetime allowance charge of 25% £1.5 million, but only if they make subject to the lifetime allowance. BIKES FOR WORK Under salary sacrifi ce, payment for a bike for work COMPANY CARS tax bands will be introduced by the TAX-FREE LOANS comes out of an employee’s The benefi t value of an employer- government, at 0-50g/km and The threshold for tax gross, rather than net, pay. provided car is calculated as the new 51-75g/km of CO2. exemption on price published by the manufacturer, The appropriate percentage of the employment-related, Because their plus value-added tax (VAT), delivery, list price subject to tax for the 0-50g/ low-cost or interest-free pay falls slightly over number plates and any optional extras. km CO2 band will be 5% in 2015-16 loans is currently £5,000, The employee is liable to pay tax on a and 7% in 2016-17. The appropriate but will rise to £10,000 in the payback period, the typical percentage of the P11D percentage of the list 2014-15. If the total saving for a standard-rate value decided by the car’s price subject to tax for outstanding balances do taxpayer is 32%. On average, employers can save 13.8% of carbon dioxide (CO2) the 51-75g/km CO2 band not exceed the threshold emissions. will be 9% in 2015-16 and in a tax year, there will be the total value of the salary Two new company car 11% in 2016-17. no tax charge. that employees sacrifi ce. Thinkstock

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EB_0214 29 17/01/2014 11:14 BENEFITS TAX @ www.employeebenefi ts.co.uk/benefi ts/tax-effi cient-benefi ts

HEALTH SCREENING programme are lower than an employee SHARE SCHEMES Employees can save up to 42% tax if this would have to pay individually. The employer If an employee invests in a share incentive benefi t is offered through a salary sacrifi ce will save on the 13.8% employer NI plan (Sip) and keeps their money there for arrangement. Also, the charges that contributions, with the cost of the screening fi ve years, no income tax or NI employers pay for a bulk screening recovered via deduction from employees’ pay. contributions will be payable when the employee acquires the shares. EXAMPLE OF TAX AND NI SAVINGS FOR HEALTH SCREENING An employee will also not have to pay Basic-rate taxpayer (1) Higher-rate taxpayer (2) capital gains tax (CGT) on shares sold, but if the shares are retained, CGT may have to Health assessment cost £500 £500 be paid if they increase in value. There is an annual exemption of £10,900 before Tax and NI saving £160 £210 the tax is paid. Net cost £340 £290 The personal investment limits of Monthly cost £28.33 £24.16 sharesave schemes will double from £250 to £500 a month from April 2014. Also, the (1) Assumes employee pays tax at 20% and NI at 12%. maximum value of (2) Assumes employee pays tax at 40% and NI at 2%. shares an employee Source: HMRC can acquire with tax advantages through share incentive plans (Sips) will rise by £300 CHILDCARE VOUCHERS However, from 2015, childcare vouchers a year to £1,800 for partnership shares and Childcare vouchers provided as an employee will be replaced by a tax-free childcare to £3,600 a year for free shares. benefi t are exempt from income tax and NI scheme that provides working families with The government will provide an annual contributions on up to £55 per week or £243 20% of their childcare costs, up to £1,200 exemption from income tax on bonuses or per month, per employee. for each child. equivalent payments on amounts up to £3,600 paid to employees of organisations TAX ADVANTAGES OF CHILDCARE VOUCHERS that are indirectly employee-owned. Level of tax Tax-free voucher limit Gain taken from a share scheme option employee pays is taxed at 18% up to £32,010 and at 28% from £32,011. Basic-tax rate £243 a month Employers can give employees up to £3,000 worth of free shares in any tax year, Higher-rate tax £124 a month (If employee joined the scheme on or after 6 April and staff can buy £1,500 worth (or up to 2011). If the employee joined before then, the limit is £243 a month. 10% of their income for the tax year, if less) before income tax and NI are deducted. Additional-rate tax £110 a month (if employee joined the scheme on or after 6 April 2011). If the employee joined before then, the limit is £243 a month.

The reason for the limits is to ensure no employee receives more than £11 a week in tax relief. GYM MEMBERSHIP So, 20% x £55 = £11, 40% x £28 = £11.20 and 45% x £24 = £10.80. Staff can save on NI contributions if gym membership is offered via salary sacrifi ce. Class 1A NI contributors save up to 12% when paying for gym membership, but INCOME TAX RATES NATIONAL INSURANCE CONTRIBUTIONS those in the higher NI contribution band will Personal allowance: £9,440 (basic), Employees pay national insurance save only 2%. This does not include staff rising to £10,000 in 2014/15. contributions (NICs) if they earn more than that have access to an on-site gym on their £149 a week. The amount they pay is 12% of employer’s premises. 20% on annual earnings above the their earnings above that limit, up to £797 a PAYE tax threshold up to £32,010. week. The rate drops to 2% of earnings above that amount. Robert Crawford is 40% on annual earnings from £32,011 Employers pay 13.8% NICs on all wages a reporter at to £150,000. they pay to employees. However, in April 2014, Employee Benefi ts the NICs Employment Allowance will knock 45% on annual earnings above £2,000 off most (but not all) employers’ @ £150,000. annual NICs bills. Read also What is the future shape of salary sacrifi ce car schemes? at: bit.ly/1fcJTJQ

30 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 30 17/01/2014 11:19 EB_0214 31 17/01/2014 14:39 VOLUNTARY BENEFITS FAMILY VALUES Voluntary beneﬁ ts can help employers to become more family-friendly by supporting and motivating working parents, says Robert Crawford

can be a cost-effective perk to provide. “Employee savings platforms give huge advantages to families in the workplace, especially at times when costs are high,” he says. “Employees can save money on groceries and other essentials. It’s a huge benefi t that could save them hundreds of pounds a year.” Over the past six years, Employee Benefi ts’ Benefi ts Research has shown a signifi cant rise in the proportion of employer respondents that offer voluntary benefi ts. Before the recession in 2007, just over half (52%) did so for all employees, and 6% did so for some staff. By 2013, this fi gure had reached 73% for all staff, and 8% for some employees. The Benefi ts Research 2013, ith legislative changes fl exible-working arrangements. published in May 2013, found that the top affecting working parents Atkins, Barclays, Danone and Royal Mail voluntary benefi t offered to staff by the 561 coming into force over the Group were among the employers recognised respondents was retail or leisure discounts. next few years, employers are as family-friendly in the Workingmums.co.uk Ben Black, managing director of My Family looking to make good use of Top Employer Awards in December 2013. The Care, says: “Employers want to be more Wvoluntary benefi ts to create a family-friendly organisations were recognised for embracing family-friendly these days, which is why they work environment. the business benefi ts of fl exible-working offer these benefi ts for staff, to make them Voluntary benefi ts that an organisation can arrangements and being proactive in creating a attractive to work for.” offer to enhance its reputation as a family- family-friendly workplace. Many working parents see childcare friendly employer include emergency Employers can also use a number of vouchers as one of the most important childcare, school holiday clubs, nursery voluntary benefi ts, including retail discounts, to benefi ts an employer can offer, but next year discounts and travel insurance for family help working parents. Andy Philpott, sales and the voucher system will be replaced by a

Scott Garrett holidays, as well as childcare vouchers and marketing director at Edenred, says discounts tax-free childcare scheme for working families.

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EB_0214 32 16/01/2014 16:26 @ www.employeebenefi ts.co.uk/benefi ts/voluntary-benefi ts

CASE STUDY ATKINS Engineering a family environment Engineering consultancy Atkins manager at Atkins, says: “To help promotes itself as a family- retain and attract more female friendly employer, not only for employees, fl exible working can female staff but also for male be facilitated from day one of a employees because of its new starter’s employment. We benefi ts offering and fl exible- want to attract talented people working arrangements. and if they can only work three or The organisation won four days a week, we will Workingmums.co.uk’s Innovation facilitate that, where possible.” in Flexible Working Award in Another popular family-friendly December 2013, and was named benefi t at Atkins is allowing staff top employer overall for initiatives to buy up to 15 days’ more holiday that support fl exible working and a year. Jones says: “The ability to women’s career progression. buy up to 15 days certainly makes Benefi ts offered by Atkins that a difference for working parents, are popular among working as do childcare vouchers.” Sue Cooper, HR director, says: normal to buy extra leave. There families include fl exible working, One-third of Atkins employees “All the benefi ts we offer is certainly a big sense of being extra holiday entitlement, take advantage of the holiday- employees are benefi cial to the family-friendly at Atkins. We are childcare vouchers and informal buying benefi t. family. They show we have an working hard to support families employee assistance The employer has also used open approach to working and to help employees feel programmes, such as networks return-to-work bonuses to parents and encourage that comfortable in a big organisation. for working families to interact. encourage working parents back work-life balance feel. The benefi ts offered help to Victoria Jones, recruitment to work and boost productivity. “We want to make it feel develop them and their families.”

2015. The research, published in December depend on effective communication, 2013, found that 75% of respondents would particularly because there can be strong c consider retaining their existing childcare demand from staff wanting information about EAPs can provide a helpline voucher scheme after 2015. parenting support. and counselling for new Benefi ts providers have noted an increase in Edenred’s Philpott says: “A lot of good parents that are stressed the number of employers that allow staff to organisations invest in making information extend healthcare and wellbeing benefi ts to available through online portals, webinars and need support” cover family members, including private and professionals coming in to do Mike Morgan, PeopleValue medical insurance (PMI) and health cash plans. presentations, not only for working parents, More employers are also introducing but for all employees. Under the new scheme, which will take practical services that provide information to “Working parents are time-poor but good effect in autumn 2015, the government will working parents, such as employee assistance provide working families with 20% of their programmes (EAPs). IF YOU READ NOTHING ELSE, childcare costs, up to £1,200 initially for each READ THIS. . . child up to fi ve years of age, eventually Very attractive extending this to cover children up to 12 years Mike Morgan, chief executive offi cer of > Retail or leisure discounts help put money old by about 2020. PeopleValue, says: “Private medical insurance back into families’ pockets. Black adds: “Childcare vouchers, as we know and health cash plans are very attractive when > them, will end. There is a plus side and a down they are not just for the employee, but Healthcare benefi ts, such as private medical insurance and health cash plans, side to that. Perhaps vouchers are taken for embraced for the family as well. may offer staff the choice to extend granted. There is no increased level of staff “EAPs are also important and can provide a cover to family members. engagement by having them, but they work helpline and counselling for new parents that and do put money into the hands of parents.” are stressed and need support to meet the > Changes to the childcare vouchers Despite this change, only 2% of employer challenges of working. EAPs don’t save scheme and shared parental leave, both respondents to research by Jelf Employee employees money, but they are vital to coming into force in 2015, make it vital Benefi ts say they intend to remove their staff health.” for employers to communicate their childcare voucher offering before the The effectiveness of voluntary benefi ts in family-friendly policies to staff. government’s new scheme takes effect in making an employer family-friendly can

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EB_0214 33 16/01/2014 16:26 VOLUNTARY BENEFITS

EMPLOYERS’ MOST COMMONLY OFFERED VOLUNTARY BENEFITS Viewpoint 32% 32% 25% Doctor Clare Dining Kelliher is a professor Retail cards, of work and or leisure Gym such as Taste or organisation at discounts membership Gourmet Cranﬁ eld University

There is much evidence to show that 22% 21% 21% employers that provide their employees with some support mechanisms, such as Retail Season or benefi ts, to help them cope with the Dental ticket leisure insurance travel loan demands of their non-work lives, build vouchers loyalty and enhanced commitment. Many employers have attempted to become more family-friendly in recent years and have developed policies such as Health/ 20% 16% 14% 13% providing enhanced parental leave, Health/ Private hospital emergency care leave, workplace and/or hospital medical cash cash plan Travel insurance subsidised childcare and various options plan for fl exible working. for employee insurance for partners and for partners and dependants These policies have often been dependants designed primarily to assist parents and carers and, in particular, mothers. However, it is important to recognise that Source: The Benefi ts Research 2013, Employee Benefi ts all employees need to balance the demands of their work and life. In this context, one size does not fi t all employers look at, and recognise, the leave will come into force in April 2015. Julian and genuine fl exibility is the key to opportunity to take stress away by providing Cox, partner at law fi rm Fletcher Day, says it allowing employers and employees to benefi cial information services. It’s a nice way could cause employers to change their work out an arrangement that for an employer to say ‘we are family-friendly’.” provisions for helping parents back to work. accommodates the particular needs of the But putting appropriate benefi ts in place is “No doubt the new rules will present a employee and, at the same time, meets just the start. Line managers also have a vital potential headache to organisations,” he says. the needs of the business. role to play in creating a family-friendly “Employers will have to change their thinking This need for a more fl exible approach environment. Zofi a Bajorek, work effectiveness for working families, which could present them has been refl ected in recent government researcher at The Work Foundation, says: with the same issues of no return-to-work policy, for example allowing parental leave “There is a growing interest in family-friendly policy for mothers as well as fathers. to be shared and the opening up of policies. All that is great, but they only become “Employers will have to communicate the fl exibility provisions to all employees. family-friendly if the organisation has the change in their family-friendly provisions, Flexibility recognises that different culture to support it. If there are barriers which may see more male employees off employees will have different needs and and line managers are less committed, this [work] for long periods of time.” that their needs may change as they does not help. Voluntary benefi ts that provide support progress through different life stages. For for parents can certainly help employers to example, someone providing eldercare Flexible working retain talent. The Work Foundation’s Bajorek may want a different type of arrangement from someone who is pursuing education, “Line managers have an important role to play says: “If an employer has all the policies and sports training or religious activities. to promote a culture that accepts policies such benefi ts in place, working parents are just not Equally, although emergency support as fl exible working, where it can aid the going to leave an organisation that is may be greatly appreciated by the employee and the organisation.” supportive of them.” EB employee that uses it, there is also a need However, some employers still do not have to consider more general day-to-day simple family-friendly policies in place, such as support for employees. Employers may helping parents return to the workplace. Robert Crawford is also be able to assist by helping Un-family friendly Britain, research published a reporter at employees with benefi ts, access to by Mumsnet in November 2013, found that Employee Benefi ts information and connecting them with 26% of respondents work for organisations others that may have relevant experience. with no return-to-work policy. @ Read also How to get the most from emergency childcare spend at: bit.ly/1m2S8Gj New legislation covering shared parental

34 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 34 16/01/2014 16:26 EB_0214 35 16/01/2014 16:17 BHSF - engage your employees with a range of employee benefits and HR solutions

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EB_0214 31 16/01/2014 10:10 PENSIONS MIND YOUR LANGUAGE Jargon-free communication can make pensions easier to understand, says Robert Crawford

efore communicating to staff about deferred member is, for example.” Standard Life, says using a similar name to pensions and auto-enrolment, There is a debate that the word ‘pension’ Australia’s My Super (superannuation) would employers should ensure the itself has become a kind of jargon that help to engage staff. language they use is clear and disengages employees from saving. Jamie “The word ‘pension’ is unexciting and boring,” straightforward, avoiding jargon that Jenkins, head of workplace strategy at he says. “Australians will talk about their My Bemployees may not understand. A National Employment Savings Trust TOP 10 PENSION JARGON EXPRESSIONS TO AVOID (Nest)/YouGov survey, published in 2012, which polled nearly 2,000 UK adults, revealed that pension jargon can put savers off, with 50% of TRIVIAL COMMUTATION respondents saying they fi nd pensions harder becomes: taking retirement to understand than other fi nancial products. pot as cash. If an employee’s DEFAULT FUND retirement pot is worth less Christopher Hopkins, managing director at Unless an employee than £2,000 or their total employee communications consultancy chooses another option, retirement savings are less their money will be Caburn Hope, says this is because the world of than £18,000, they might be invested in a fund chosen ANNUITY pensions is full of regulations and compliance. able to take this money as a by employers or trustees becomes: “Many organisations and pensions people feel cash lump sum instead of retirement buying a retirement income. the need to communicate large amounts of income technical information,” he says. “This has to be done because of regulatory needs, but the IMPAIRED LIFE DECUMULATION problem is that employees simply don’t read it.” ANNUITY becomes: becomes: a taking money Good reason retirement income out of the based on the OPEN MARKET pension Charles Cotton, performance and reward employee’s health OPTION adviser at the Chartered Institute of Personnel becomes: and Development (CIPD), says there is a good shopping around reason why the industry uses words such as FIDUCIARY for a retirement DEFAULT CONTRIBUTION annuity, accrual and accumulation. “It is a way RESPONSIBILITY income becomes: minimum contribution. The law has of simplifying something for those who are in becomes: legal duty set minimum amounts an the know,” he says. “But it becomes jargon to act in members’ interests employer must contribute when discussing it with staff that are not.” SINGLE LIFE for each jobholder, but Other jargon used in communicating ANNUITY JOINT ANNUITY they can contribute more pensions includes terms such as active or becomes: becomes: joint retirement if they want to. deferred member. Trevor Rutter, individual income. A retirement communication consultant at Like Minds, says: retirement income for an employee’s income husband, wife, partner or “What does that mean? It just means someone civil partner that who is contributing and active in a pension continues to be paid after fund, and someone who has left. It’s the old their death adage: why use 10 words when one will do? “Regrettably, with pensions, it has to be the other way around. That way, it is easier to Image created by Employee Benefi ts using text from The Nest Phrasebook: Clear communication about pensions,

Thinkstock explain and employees will understand what a National Employment Savings Trust (Nest)

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EB_0214 37 16/01/2014 16:37 PENSIONS @ www.employeebeneﬁ ts.co.uk/beneﬁ ts/pensions

Super as their pension and there is an IF YOU READ NOTHING ELSE, Viewpoint argument that it’s more exciting and much READ THIS. . . better-sounding than pensions.” Different generations of employees may > Pension communications should be clear require different types of pension and straightforward, avoiding jargon Vincent Franklin is a where possible. creative partner at communication. For example, older staff may communication be more accepting of jargon. Damian > Communications could be tailored to consultancy Stancombe, partner at consultancy Barnett different age groups and industry sectors. Quietroom. Waddingham, says: “If an employee is in their late 50s or 60s, using jargon such as annuity or > Jargon can put employees off saving. member outcome is okay because they have Auto-enrolment appears to take the probably lived with it and can relate to it. pressure off pensions communication. If “But those in their 20s will have negative helping people to make sense of their pensions. employees don’t have to choose to join connotations with a pension because it’s so far This means not only cutting down on useless and if their contribution levels are already away. It just won’t engage them. We have a jargon, but also communicating with set, we can pack up our jargon-busters habit in our industry of using the same employees in the way they like best, whether and go home. language across all generations.” that is face to face, via a website, on a mobile But the industry can’t do that. If The CIPD’s Cotton says the type of application or by watching online video clips. auto-enrolment is to become a successful organisation an employee works for is a “Put simply, the easier you make it for people pension provision, we have to help relevant factor. “If communicating to to engage with their pension planning, the employees make good choices. employees in fi nancial services, the type of more likely they are to do it.” We should use words that normal language used will differ from communicating Publications provided by Nest and the people use and invite staff to make the pensions to the manufacturing industry,” he Department for Work and Pensions are other most of an opportunity. Instead, we are using words that keep them at arm’s says. “It’s a different environment useful tools for employers to use length, such as drawdown and risk profi le, and they may be less pension- or to help staff understand the and scaring them into taking responsibility. fi nancially savvy.” language of pensions. We interviewed people for the National Auto-enrolment legislation Association of Pension Funds conference Online portals requires employers to inform last year. They were bright people. But out Like Minds’ Rutter says employees about the duties of of 17, only two could tell us what an communication is helped by using both the employer and employee. annuity is. Worse still, they told us they online portals, emails, printed The Pensions Regulator has felt “stupid”. We’ve done that to them. And booklets and letters sent directly detailed the legal requirements of when people feel stupid, they switch off. to staff, but complex equations what needs to be included in That’s not going to help them make the and percentages can still be pensions communications, such as most of an opportunity. confusing. “We are obsessed with describing the auto-enrolment date, the value of It’s our responsibility to bring people things rather than explaining how it is a benefi t contributions and full details of the scheme. into the conversation. We can do this by to employees,” he says. However, many organisations tend to use talking in a way that’s clear, vivid and real. “Pensions can be complicated. Terms such over-complicated language when Clear means making sure employees as contribution rates, percentages and tax communicating pension matters. Standard get it fi rst time. Asking them to navigate relief confuse employees. Employers need to Life’s Jenkins says: “We need to rethink things, between advice and guidance is a perfect talk in monetary terms because staff are more using plain language, positive tones instead of example of how our language creates interested in money than percentages.” negative fear, to get employees to respond.” needless confusion. Employers also need to choose With careful planning, employers can avoid Vivid and real means making sure that communication methods that meet the cluttering such communications with language what we say sticks in employees’ minds. requirements of their workforce. Laith Khalaf, that is best avoided. Caburn Hope’s Hopkins We need to focus on the benefi t of saving, head of corporate research at Hargreaves says: “If organisations can start talking about rather than the process. When we asked those people on the Lansdown, says: “One of the real bits of value pensions as being savings and an investment in street what a pension is, they talked about pension providers and advisers can offer is future lifestyle, it will help to engage their future, what life will look and feel like employees. They want clear, simple, man-in- many years from now. the-street type of stuff.” EB They didn’t go on about contribution levels or tax effi ciency. But that’s where c we keep starting the conversation. We Employers need to talk in Robert Crawford is need to start the conversation where monetary terms because a reporter at those people would start it. And we need Employee Benefi ts to use pensions language that makes staff are more interested in them feel like they can join in. money than percentages” @ Read also Communication strategies to engage staff with auto-enrolment at: bit.ly/1hqxMqa Trevor Rutter, Like Minds

38 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 38 16/01/2014 16:37 THE EMPLOYEE BENEFITS

SUMMIT “Extremely well organised and executed. Great opportunity to learn more about the big issues in comp & MAY 2014 bens and meet colleagues from other organisations. Would come every year if I could!” Ellie Vaughan, People Data & Reward Manager, Meet, learn and network with other benefi ts Alzheimers Society managers at the forefront of change. “Brilliant summit, very motivational, inspiring and thought-provoking. The 9th annual Employee Benefi ts Summit will again unite senior benefi ts Valuable networking opportunity. professionals, providers, consultants and experts from across the UK and Europe. Fantastic location and venue” Sushma Dhonsi, Benefi ts Manager, EMC Attendees will be informed and inspired at a two-day schedule of high-level Computer Systems UK Ltd conference sessions and meetings with relaxed networking at mealtimes and “Informative thought-provoking in the evenings. and challenging” Leanne McLean, Senior General Manager, Held at a luxurious European venue, the event will facilitate open discussion and Reward (UKIN), CEVA Logistics Ltd the exploration of the year’s most important issues away from daily distractions. “A true chance to share what good practice will be and refl ect on Register your interest in attending at current issues” Laura Edge, Pensions Manager, The London www.employeebenefi tssummit.co.uk School of Economics Sponsorship Enquiries: Jessica Garland – T: +44 (0)20 7970 4929 – “The benefi ts summit was full of new ideas to take away and the networking E: [email protected] opportunities second to none” Delegate Enquiries: Jessica Oliver – T: +44 (0)20 7943 8133 – Kay Schoonderwoerd, Head of Compensation, E: [email protected] Benefi ts & HRIS, Neopost Ltd

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EB_0214 39 20/01/2014 09:55 GROUP RISK @ www.employeebenefi ts.co.uk/benefi ts/group-risk RELEVANT POINTS High-fl ying staff will benefi t from a relevant life policy, says Danby Bloch

KEY POINTS ABOUT RELEVANT LIFE POLICIES

A RELEVANT LIFE POLICY (RLP) provides life cover outside the structure of a registered pension scheme.

AN RLP’S death beneﬁ ts do not form part of an employee’s lifetime allowance.

THE PREMIUMS of an RLP do not form part of an employee’s annual allowance.

AN RLP is not subject to income tax or national insurance contributions.

AN RLP must only provide life cover.

uppose an employer has selected a life cover without the drawbacks Gemma is protection or critical illness insurance. It can new marketing manager, Gemma. objecting to. This is because RLPs fall outside only pay out a lump sum if the employee dies The HR and pensions department the structure and legislation that govern in service before the age of 75. The policy has the job of proposing her registered pension schemes. cannot have a surrender value, so it must be a pension and benefi ts package, with Most staff are well catered for by normal term assurance policy. The benefi ciaries can Sa brief to maximise her pension contributions group pension scheme life cover, but for only be individuals or charities, although there and benefi ts and provide her with £1 million of high-fl yers like Gemma, an RLP really pays off. can be a trust arrangement. The main purpose life cover, paid for by the employer. The death benefi ts do not form part of her of the policy must not be to avoid tax. This seems a tough call. The employer’s lifetime allowance, so the policy can pay out So Gemma’s employer can take out the RLP pension is a defi ned contribution (DC) scheme much more than the £1.25 million, either on its for her. She and the organisation will be able to and Gemma has accumulated a fund of own or in conjunction with the pension fund, build up the maximum benefi ts under the £900,000. So if she died with life assurance without triggering a tax charge. pension scheme without the life premiums from the normal pension group scheme eroding any allowances. Then, if she dies in paying out an extra £1 million, the total death Maximum inputs service, the whole of her pension fund, subject benefi ts of £1.9 million would easily exceed The premiums are not part of the employee’s to the lifetime allowance, can be paid out to HM Revenue and Customs’ (HMRC) £1.25 annual allowance, so the employee and/or her benefi ciaries, along with the proceeds of million lifetime allowance limit and the excess employer can make the maximum qualifying the RLP. Also, the premiums for the policy would be subject to a 55% special charge. inputs into the registered pension scheme. carry the tax privileges of a pension life policy. Gemma, who knows about pensions, says HMRC normally does not treat the RLPs also make sense for other types of this would not be a satisfactory outcome. employer’s premiums for the RLP as a taxable employee, such as smaller organisations that The normal solution would be to provide life benefi t in kind, so these are not subject to may not have enough staff to set up a viable cover through the pension scheme. But this income tax or national insurance contributions. group life scheme EB could produce a high tax charge on death, and Assuming the tax inspector agrees that the the cost of the insurance premiums would eat premiums are wholly and exclusively incurred into her annual allowance, currently £50,000, for the purposes of the business, the Danby Bloch is that can be contributed into a registered employer should get corporation tax relief. editorial director pension tax-effi ciently. But to benefi t from these tax privileges, an of Taxbriefs Fortunately, there is a good answer to the RLP must satisfy certain conditions in the problem: the relevant life policy (RLP), which legislation. The policy can only provide life @ Read also Top tips for minimising group risk spend at: bit.ly/1hXgB2b

Thinkstock has the key advantage of providing pension cover and no other beneﬁ t, such as income

40 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 40 16/01/2014 16:17 EVERYDAY employee beneﬁts

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EB_0214 41 20/01/2014 14:00 EMPLOYER PROFILE POSITIVE SIGNALS East Coast Mainline is keeping reward on track as it undergoes re-franchising, says Jennifer Paterson

rain operator East Coast Mainline is EAST COAST MAINLINE on schedule for a suspenseful 2014. It is in the process of being re- AT A GLANCE franchised but will have to wait until October to learn which bidder from a East Coast Mainline is a train operator that Tshortlist of interested parties has succeeded. runs frequent services between King’s The re-franchising process will be completed Cross station in London and the East in February 2015. Midlands, Yorkshire, north-east England John Hayhurst, head of HR at East Coast and Scotland. It has almost 3,000 Mainline, aims to keep the organisation’s employees working at stations, depots and benefi ts programme moving forward as the offi ces between Inverness and London. Its re-franchising process carries on in the headquarters are in York. background. “We don’t want to stand still for 12 The organisation was set up as a months,” he says. “That’s not what we’re about. franchise in 2009 by the Department of We will still be looking for innovations from Transport using the Directly Operated Railways body. Although it is government employees. It is more about ideas and making owned, it is not a public sector things happen, even when we are in the organisation. It is currently being re- re-franchising process.” franchised, a process that will be completed in February 2015. Employee data c The average age of its employees is Part of the HR team’s responsibility in the A good salary, free travel about 42, and the average length of service re-franchising process is to compile employee and a fi nal salary pension around 12 years. Two-thirds of its data so bidders can see how much the employees are male. Head of HR John business spends. This includes information on scheme are attractive” Hayhurst says: “Certain roles, such as train sickness absence, turnover, salaries paid and John Hayhurst, East Coast Mainline drivers, tend to be male because of the benefi ts offered to staff. history of the industry.” East Coast Mainline’s most popular benefi ts are free train travel for all its 3,000 employees many benefi ts as we can conceivably come up and its fi nal salary pension scheme, which is with that won’t break the bank.” still open to new entrants. The travel perk However, the organisation’s pension, which is includes unlimited standard travel for staff, part of the Railway Pension Scheme, could their partners and dependants. Employees also prove another challenge this year, with the have the option of free fi rst-class travel but results of its triennial valuation due in April. must pay an extra £5 for the food and drink After the scheme’s 2010 valuation revealed a normally offered to fi rst-class travellers. defi cit of 7.5%, East Coast Mainline consulted “A good salary, free travel and a fi nal salary with its employees, offering them the option to pension scheme are quite attractive,” says keep their contributions at 10.56% but reduce

Jacko Hayhurst. “Then we supplement that with as their early retirement beneﬁ ts, or increase

42 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 42 16/01/2014 15:15 BUSINESS OBJECTIVES IMPACTING BENEFITS

G To continue to develop benefi ts their contribution levels to 11.9% and keep all does not expect auto-enrolment to create while the re-franchising process benefi ts the same. They chose the latter. much of a challenge. “We already operate an “Three years ago, we got around [closing the auto-enrolment process, because our scheme proceeds in the background. scheme] by changing the contribution levels,” is open to all new entrants from day one, even G To focus employees on says Hayhurst. “Contributions are quite high. if they’re on a fi xed contract,” he says. customer service and ensuring the Employees pay 11.9% of their pensionable pay East Coast Mainline’s auto-enrolment reliability of train services. and the organisation pays 1.5 times, which is staging date was August 2013 but it has G To tackle diffi cult decisions 17.85%. There is also the facility for staff to pay deferred this to September 2017, taking up an around the organisation’s fi nal additional voluntary contributions.” option for employers that operate a defi ned Almost all (90%) of the train operator’s benefi t (DB) pension scheme. salary pension scheme. workers are in its pension scheme, so Hayhurst About 20 employees who have retired and

www.employeebeneﬁ ts.co.uk I February 2014 I 43

EB_0214 43 16/01/2014 15:15 Greater visibility into benefi ts suppliers

Employeebenefi ts.co.uk is the research tool and reference source for the employee benefi ts industry. Up to 80,329 unique reward and benefi ts professionals like yourself visit the site each month. Nearly 9,000 of you are specifi cally using the site to search for in-depth information about suppliers and advisers. There is no better way to evaluate the benefi ts supplier market than with Oracle; a convenient, in-depth research tool. Up to date content for suppliers and advisers, which includes news, research, white papers, case studies and videos, will allow you to assess and benchmark their off erings. Discover this insightful knowledge resource at www.employeebenefits.co.uk/oracle If you would like to promote your products and/or services on Oracle please contact Jessica Garland, Business Development Manager on 020 7943 8063 or [email protected]

EB_0214 44 20/01/2014 09:57 EMPLOYER PROFILE

CAREER HISTORY

John Hayhurst has been head of days to the big split of train- centralisation and HR at East Coast Mainline for operating organisations.” decentralisation of HR four years. He was previously His fi rst job was as a clerical throughout the UK railway head of HR at National Express, offi cer for British Rail industry’s years of change. “One during the two years when Great Engineering, then a subsidiary of of the key things I did as part of North Eastern Railway (GNER) British Rail. He then moved to the GNER’s franchise was to was part of the National Express personnel offi ce at eastern centralise the HR team,” he says. Group. He has also been an HR region headquarters. “We used to have four or fi ve business services manager at “It was the personnel offi ce at people at each particular hub GNER, once part of British Rail. the depot, which covered along the route: Edinburgh, Hayhurst, who has worked in everything from uniforms to Newcastle, York, Leeds, the railway industry for 30 years, payroll,” he says. “I progressed Doncaster and London. team. As technology improved, says: “I’ve seen a considerable through the grades up to head of “Each one of those hubs had we became more effi cient and amount of change through the HR, which is where I am now.” an HR team, a payroll team, and were able to centralise to a single industry, from the British Rail Hayhurst has taken part in the a learning and development HR service centre.”

drawn down their DB pension but returned to employee deemed to be going above and work have been auto-enrolled into a trust- beyond their standard responsibilities. based defi ned contribution (DC) plan, which is Hayhurst explains: “It was fi rst introduced also part of the Railway Pension Scheme. around the time of all the fl oods and snow in Over the past two years, Hayhurst and his the winter of 2013, because a lot of our staff team have focused on refreshing and were going the extra mile, working late, having revitalising the organisation’s voluntary diffi culty getting to work, and helping benefi ts scheme. “Voluntary benefi ts, in my passengers through diffi cult transportation view, are the easiest way to get something that issues. The individual does not have the option is completely cost effi cient, but provides a to add cash to the card, but we use it within the massive range of discounts,” he says. “We are Alongside its voluntary benefi ts revamp, the business as a recognition mechanism.” on to salary sacrifi ce arrangements as much as train operator relaunched its recognition East Coast Mainline has also aligned its we possibly can, because they are cost neutral.” programme, known as Shine. It initially handed long-service awards to the Shine card. “When East Coast Mainline introduced its voluntary out a card, loaded with £25, as a thank-you to an employee has been with us for 10, 25 or 40 benefi ts scheme just under two years ago all staff. It can be used as a debit card at any years, we can credit the Shine card with £250, using provider Salary Exchange. At its launch, store that operates fl exi-cash. Senior managers £400 or £500,” says Hayhurst. “It has become the scheme included retail discounts, the travel carry cheque books and can reward any recognised among employees. Every now and perk and the pension scheme. Since then, it has gradually added other benefi ts to the scheme, including bikes for Case study David Thorpe has been a for about fi ve years,” he says. work in May 2013 and a smartphone and customer service assistant at “The bikes-for-work scheme computer scheme in September 2013. East Coast Mainline’s allowed me to purchase a road Peterborough station for more bike, which meant I was able to Computer scheme than two years. go longer distances and train “I started on a casual basis for longer. It has dramatically Employees can buy a smartphone, to a six months doing luggage changed how I use my bike, maximum cost of £900, via a salary sacrifi ce assistance, then I applied for a how I get into work, as well as arrangement, paid for over two years. The full-time permanent role as a my training and the type of computer scheme, which includes laptops, station customer services cycling I do.” desktops and tablets, is available via payroll assistant, despatching trains at Thorpe also considers the deduction, with a set maximum limit of £2,000 David Thorpe, Peterborough,” he says. organisation’s computer scheme, and payments made over three years. customer service Thorpe’s favourite benefi t is introduced in September 2013, “There was no real incentive when the assistant bikes for work, which is available to be a great benefi t, although voluntary benefi ts scheme fi rst launched, other via a salary sacrifi ce he has not taken advantage of it. than ‘come and look at these great benefi ts’,” arrangement through the “I already have that facility says Hayhurst. “The real incentive was when we voluntary benefi ts scheme. and I have an iPhone,” he says. “If launched our fi rst additional scheme, bikes for “I was already a keen cyclist I hadn’t, that would have been work. Each time we launch a new scheme, and had owned a mountain bike my next option.” more employees sign up to the website.”

www.employeebeneﬁ ts.co.uk I February 2014 I 45

EB_0214 45 16/01/2014 15:15 EMPLOYER PROFILE @ www.employeebeneﬁ ts.co.uk/industry-sectors

THE BENEFITS

Pension > A defi ned benefi t scheme, open to new entrants. Employees contribute 11.9% of pensionable pay and the organisation contributes 17.85%. > Life assurance is available at four-times salary as part of the pension. > A trust-based defi ned contribution scheme is available for staff who have drawn down their DB pension but continue to work for the organisation.

Healthcare > Employee-paid health cash plan. > Private medical insurance for about 50 senior directors and managers. > Employee assistance programme.

Voluntary benefi ts > Travel discounts on all East Coast Mainline trains. > Employee discounts scheme. > Computer and smartphone scheme. then, we also do a blanket thank-you payment.” workforce. For example, about two-thirds of its > Bikes for work. The card is also used for the organisation’s employees, at locations scattered between > Discounts at local gyms. innovation scheme, launched in January 2014 Inverness and London, do not have access to > Childcare vouchers. to encourage staff to share their ideas. computers on a daily basis. As the overarching brand of East Coast It communicates via its employee magazine, Additional benefi ts Mainline’s benefi ts, Shine is recognised by all Coast Life, posters in communal staff rooms, > Company car allowance, mainly for employees, says Hayhurst. “From word of benefi ts details on payslips, a weekly legacy staff from previous franchises. mouth, employees ask for, or suggest, e-newsletter and management conferences. > Policies around career breaks, schemes,” he adds. “We are known for listening It has also begun to introduce smartphone fl exible working, parental leave and to what employees are asking for and seeing if technology for its guards and drivers, who need extended leave. there is something we can do. Our engagement up-to-date operational information. “That > Long-service awards. scores are the best they have ever been.” doesn’t necessarily mean they have easy > Recognition programme. access to the benefi ts portal, because it is best > A workplace savings scheme, provided Employee survey viewed on a computer,” says Hayhurst. “The by the Transport Credit Union, which pays The organisation conducts an employee survey log-in process to get into the benefi ts website about 4% interest. every summer. Its 2013 survey was completed might not be accessible on a smartphone, but by 78% of staff, the best response it has ever texting information to them is possible.” seen. Employee satisfaction with its pay and Looking ahead past its rejuvenated voluntary benefi ts package has also risen, up from 58% benefi ts scheme and the re-franchising in 2012 to 68% in 2013. process, East Coast Mainline aims to add to its “One of the questions is around getting benefi ts offer by looking to local shops and praise for a job well done, feeling valued for the suppliers along its train lines. “We will continue job they do, feeling recognised, and also to look and see if there is anything that fi ts our whether their pay and benefi ts are appropriate employee demographics,” says Hayhurst EB for the job they do,” says Hayhurst. “A 10% shift in satisfaction scores indicates that the changes and revisions have had an Jennifer Paterson is effect. Almost 80% of the workforce took part senior reporter at in the survey, so this is a great indicator that we Employee Benefi ts are hitting the spot with our reward schemes.” When communicating benefi ts, East Coast @ Video: See John Hayhurst talking about voluntary benefi ts at: bit.ly/1hdAbEq Mainline must consider its very widespread

46 I February 2014 I www.employeebeneﬁ ts.co.uk

EB_0214 46 16/01/2014 15:15 Thinking of introducing a new and cherished employee beneﬁt?

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EB_0214 47 20/01/2014 15:46 A cheeky 53.6% off a new bike for your employees

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*53.6% overall savings based on a 12 month hire period where the employer funds the scheme. Assumes 2% Employee NI rate, 40% higher rate tax and Halfords 20% in-store promotion (based on the average discount available on our best selling Cycle2work bike brand, Carrera, from April 2012-Jan 2013). Savings will vary dependent on personal tax. Competitor schemes’ savings of up to 42% as at Feb 2013 (where the combined market share of Halfords Cycle2work and competitor schemes is c. 90%).

EB_0214 48 16/01/2014 17:26 @ www.employeebeneﬁ ts.co.uk/resource-centre/buyers-guide BUYER’S GUIDE

PRODUCT FILE BIKES-FOR-WORK SCHEMES Tax and national insurance breaks make bikes for work a popular beneﬁ t with staff and employers, says Tynan Barton

Thinkstock The facts

What is the bikes-for-work scheme? It is a tax-exempt scheme that encourages employees to cycle to work to promote healthier lifestyles and reduce environmental pollution. It enables employers to fund bikes and safety equipment and loan them to staff as a tax-free beneﬁ t. The scheme was introduced by the government under the Finance Act 1999.

Where can employers fi nd out more? ikes-for-work schemes staff through a consumer credit end of a train journey. More information can be found were introduced by the agreement, and repayments to At the end of the lease period, on the Cycle to Work Alliance’s government under the cover the cost of a bike can be an employer can allow staff to buy website at: www. BFinance Act 1999 to made over 12 or 18 months. their equipment through a transfer cycletoworkalliance.org.uk promote healthier journeys to Staff can also choose to buy of ownership process, using a fair work for staff and to reduce safety equipment through the market value (FMV) payment set Who are the main providers? environmental pollution. scheme, such as a helmet, lights, by HM Revenues and Customs Providers include Bikes 2 Work One of the main attractions of refl ective clothing, locks, mirrors (HMRC). The FMV fi gure can also scheme, CyclePlus, Cyclescheme, the scheme is the tax and national and puncture repair kits, as well as be declared as a benefi t-in-kind Cycle Solutions, Cycle Surgery, Evans Cycles, Halfords, insurance (NI) breaks it offers both child safety seats if they need to with a P11D. Hargroves Cycles and P&MM employees and employers. drop a child off at nursery. Tax changes in 2012 mean Employee Benefi ts. Employees can reduce their tax employers can no longer pass on and NI liability when they buy a Consumer credit VAT savings to staff, and VAT must bike for their commute through a The consumer credit agreement be accounted for on the monthly salary sacrifi ce arrangement. The allows an employee to lease a bike amounts paid by staff, because it typical saving for a standard-rate and related safety equipment up is seen as supply of a service. STATISTICS taxpayer is 32%, rising to 42% for to the value of £1,000, including However, bikes-for-work higher-rate taxpayers. VAT, but staff working for an take-up continues to rise. Figures The Commuting expenses are organisation with an employer- from the Cycle to Work Alliance, 44,000 number of reduced further when staff specifi c consumer credit licence published in August 2013, show a new cyclists that signed up to consider the cost of running a car. can source a bike and equipment 22.5% year-on-year increase in the scheme in the fi rst half of Employers can save, on average, worth more than £1,000. take-up in the second quarter of 2013 (Cycle to Work Alliance, 13.8% of the total value of the Under the rules of the scheme, last year. August 2013) salary employees sacrifi ce at least 50% of the bike’s usage The percentage because of the consequent must be for a commute to and Tynan Barton is 62% of employers reduction in their NI contributions. from work. This can be all or part that offer bikes for work through The bikes-for-work scheme of the journey, so cycling to a features editor at Employee Benefi ts a salary sacrifi ce arrangement on involves an employer signing up station to catch a train would a voluntary basis (The Benefi ts with a provider and purchasing or qualify. Employers can lease two Research, Employee Benefi ts, leasing bikes on behalf of their bikes to one employee if, for @ Read also Take care with tax on bikes for work at bit.ly/1e6vAA5 May 2013) employees. Bikes are leased to example, they need a bike at each

www.employeebeneﬁ ts.co.uk I February 2014 I 49

EB_0214 49 20/01/2014 14:20 EB_0214 50 20/01/2014 12:19 @ www.employeebeneﬁ ts.co.uk/resource-centre/buyers-guide BUYER’S GUIDE

PRODUCT FILE FLEXIBLE BENEFITS TECHNOLOGY Rapidly developing technology is increasing the versatility of ﬂ exible beneﬁ ts schemes, says Clare Bettelley

The facts

What is fl exible benefi ts technology? It is a technology system, operating in-house or from cloud-based servers, that provides a platform to deliver a fl exible benefi ts scheme. Increasingly, systems are designed to interface with other elements of benefi ts and reward, including pensions, and often have interactive and data-modelling tools that can be used by employees.

What are the origins of fl exible benefi ts technology? The fi rst systems were put together about 25 years ago, but these were largely based on simple spreadsheets and Thinkstock in-house IT. he economic downturn has employees’ desire to access their Single sign-on technology also helped to drive take-up of benefi ts from a wide range of enables HR and reward What are the costs involved? fl exible benefi ts as devices, including their offi ce professionals to access the same This will depend on the number of employees and the degree of employers seek to computer, home computer and system at various levels remotely, T system sophistication required. maintain, or reduce, their spend on mobile devices. to view employee activity, produce Advisers estimate that for fl ex employee benefi ts. Flexible benefi ts providers management reports and target technology only, where an Employee Benefi ts’ Benefi ts have also been under pressure communications, streamlining the employer manages the Research 2013, published in May to respond to employees’ administration process. This is back-end administration, costs 2013, shows that the proportion of demands for streamlined access proving particularly useful for can start from £4 per employee. employers that offered some, or to all their benefi ts via a single employers that want to globalise This can rise to about £8 per all, benefi ts to all staff via a fl exible technology platform. their fl ex platforms. employee if administration benefi ts plan rose from 19% in A number of global employers management is included. A 2007 to 24% in 2013. Single platform are currently centralising their helpline will also add cost. Flexible benefi ts schemes This has resulted in some benefi ts strategies, including fl ex, Implementation costs can run enable employers to offer staff a employers investing in, and and are demanding multi-language into hundreds of thousands of wide range of benefi ts cost- developing, their fl exible benefi ts and multi-currency fl ex platforms. pounds, with many providers prepared to offer employee effectively through, for example, proposition to enable them to But while the intricacies and volume-based discounts. salary sacrifi ce arrangements, integrate their entire perks complexities of the back end of which offer tax and national package onto a single branded fl ex platforms have increased, What are the legal insurance savings for both platform with single sign-on providers are simplifying the implications? employers and employees. functionality. This enables staff to front end to help to maximise The system must comply with Technology has had to evolve sign in to all their benefi ts using a employee engagement. data protection regulations. considerably to respond to this single username and password, More appealing platform demand, as well as keep up with regardless of the benefi t they interfaces and user-friendly the increasing pace of life and want to access or the provider. functionality are becoming

www.employeebeneﬁ ts.co.uk I February 2014 I 51

EB_0214 51 20/01/2014 14:25 BUYER’S GUIDE

PRODUCT FILE

increasingly common, and some STATISTICS The facts platforms have introduced feature slider bars, enabling staff to select of employers use their technology provider to run their their required number, or levels, of 63% fl exible benefi ts plan What are the tax issues? benefi ts just by using their mouse, HM Revenue and Customs’ rules rather than having to type them in. of employers consider cost a barrier to fl ex scheme around salary sacrifi ce But the biggest development in 66% implementation arrangements will apply to any the past year has been platform fl exible benefi ts offered. of employers structure their fl ex scheme to enable providers’ use of social media- employees to take tax-effi cient benefi ts via a salary based functionality. 32% Where can employers get more sacrifi ce arrangement, promoted as part of a cohesive fl ex package information and advice? For example, some platforms There is no industry body for are using Facebook-style pages of employers that do not offer a fl ex plan outside the fl exible benefi ts technology, so that enable employees to ‘like’ 18% UK are considering doing so employers should speak to benefi ts and view their peers’ several providers and, if possible, perks preferences. Source: Employee Benefi ts/Towers Watson Flexible benefi ts research 2013, published in April 2013 other organisations that have But this is a new phenomenon, already introduced a fl exible so it is too early to tell whether Another new trend is health software are helping fl ex schemes benefi ts system. this trend will continue. accounts, jointly funded by realise their true potential for employers and employees, which employers and employees. What is the annual spend on Evolving choice give access to healthcare benefi ts With real-time operability fl exible benefi ts technology? One trend that is here to stay is that link to, and support, an and systems that can be adapted It is impossible to evaluate the the ever-evolving choice of fl exible employer’s wellbeing strategy. to align with key stages in market without a central body to benefi ts that platform providers Similarly, retirement planning- employers’ reward cycles, or even collect this data. are catering for. New-style related benefi ts, such as employees’ personal preferences, Which fl ex technology benefi ts offered via fl ex include independent fi nancial advice and the technology can now offer providers have the biggest insurance for gadgets such as group risk benefi ts that support true fl exibility. market share? mobile devices, and bring-your- older employees, are slowly But employers should not Leading providers include Aon own-device computer schemes, being introduced. assume that all fl ex systems offer Hewitt, Benefex, BHSF, Capita, which may be offered via a salary The maturity of the fl ex market, the same level of sophistication at Co-operative Flexible Benefi ts, sacrifi ce arrangement. which spans more than 20 years, the back end simply because they Edenred, JLT, Lorica Employee Micro-P and Let’s Connect are and the growing range of look the same at the front end. Benefi ts, Mazars Employee two IT device providers that are providers means that the cost of A fl ex platform may appear to Benefi ts, Mercer, catering for employers’ growing fl ex technology has actually offer a workforce the right level of NorthgateArinso, Personal technology needs. declined, putting some fairly information, and in an appropriate Group, Staffcare, Thomsons Platform providers have also sophisticated technology within format, but an employer should Online Benefi ts, Towers Watson had to develop technology the reach of smaller employers. ensure the platform has the and Vebnet. enabling employers to create and From employee benefi ts back-end capability to provide, for administer multiple enrolment consultants and fi nancial advisers example, the required level of Which providers have windows for new-style benefi ts, to online technology services, interconnectivity with other increased their share most in such as mobile phones, because employers of any size can now benefi ts and systems, such as the past year? their contract renewal dates may access fl exible benefi ts payroll and pensions. There is no central organisation to provide specifi c market data, not coincide with an employer’s technology for their workforce. Also, employers with an but consolidation through annual fl ex window. Advances in technology and established fl ex platform should strategic partnering and be sure to consider their internet acquisitions is likely to enable connection, as well as their providers to increase their fi rewall, in any review because market share. these, rather than the technology itself, could be responsible for any online speed issues.

Clare Bettelley is associate editor of Employee Beneﬁ ts

@ Read more about ﬂ exible beneﬁ ts at bit.ly/1cLB6an

52 I February 2014 I www.employeebeneﬁ ts.co.uk

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EB_0214 53 20/01/2014 10:08 CONFESSIONS OF A BENEFITS MANAGER A tidy discovery Candid gets involved in a serious tidy-up of the ofﬁ ce, and is impressed by some of the forgotten documents and objects that come to light

t might be a bit late, but I am last year, and does it lift your spirits a huge collection of catalogues. shredding is quite revealing. There is determined to put my new year’s when you look at it? On that basis, I Another drawer reveals several a mail from Smarmy Consulting Iplan into place: I am now ready to would throw out my colleague Lazy out-of-date crisp packets and a offering him a free personal fi nance kick off Operation Tidy Up. Susan, but there is only so much personal stash of biscuits. It’s a consultation. A week later, it After last year’s annual cull, we you can do. wonder she ever fi nds so much inexplicably got the job of helping are a much smaller department and I am also sick of looking at the time to look at Facebook. us with special fi nancial planning have several spare desks. mess on her desk. I hope she is I have my own cache of shame: offered to board members. Why Unfortunately, the extra spaces inspired by my activity to clean up a thick folders of long-abandoned wasn’t I involved in that project? have become a dumping ground bit. Her area is covered in chocolate projects, and outdated surveys are I also see a copy of his expenses. for anything people don’t know wrappers and dirty cups, not to all tossed with abandon. Suddenly, I Phew. You could support a family of what to do with. mention some rather nasty have space to fi ll. I might go and fi ve on his travel spend. I wouldn’t I am sick to death of looking at screwed-up tissues. raid the stationary cupboard for mind, but he begrudged me a few parts of a broken lamp, an ancient It is amazing how many things some nice new fi les. pounds to get a taxi back from a binding machine and a pile of we have stored on shelves; things When I get back, Big Bad Boss conference last week, and I was unused posters. I remember that that have certainly not been useful has joined in the spring clean. Well, forced to struggle back on the tube the binding machine was the bane in the last year. There is a massive at least he has emptied a load of carrying three bags. How mean. of my life when I fi rst came here. report on company paper into the He has also thrown away a free In those days, the monthly HR cars in Poland. I look confi dential survey on staff pay offered by reports for the Higher Beings had to at it, undecided. It is c I see a copy shredding bin. Only it another consulting fi rm, which says be spiral bound, and I would wear almost too old to use, of his expenses. isn’t the confi dential that I am 20% underpaid. I’ll hold myself out trying to get this gadget and we don’t even bin; it’s just a normal on to that one ready for the next to punch its way through 15 lots of have an offi ce there Phew. You could one. I have moved merit review. 30-page reports. any more. I toss it, support a the one shaped like a It takes a couple of days to get I need to get it moved before along with a pile of post box for sorted, but when it is done, we all someone gets the idea that we pension magazines family of fi ve on shredding next to my feel much more motivated. Even should start using it again. I am not dating back two his travel spend” desk while I clear Lazy Susan looks busy; she spends going to try to lift it, so I get that years, and a prize I things out. ages sending snaps to her friends nice looking-guy from reception to won for helping out I don’t mention his showing how tidy her desk is. Big help. He seems quite willing to put with a charity event fi ve years ago. mistake and, when he goes off to a Bad Boss seems more chilled. He is those lovely biceps to good work, It feels lighter around here already. meeting later on, I take a quick peek practically chirpy when he calls me and I am even more delighted to I am sure this must be good feng at the documents he has thrown in about a new piece of work. The watch him fl ex them. shui. Chi will be fl owing freely and out. It proves interesting reading. I bad news is that it involves working It is not often I get helped out we will all suddenly feel more learn that one of the most recent out a detailed car plan for a new around here, and I rather like it. As energetic and productive. Well, Higher Beings to leave to ‘pursue team in Poland. he goes back downstairs, I wish I maybe productive would be a bit of their own interests’ was actually I just knew I should have kept had something else that needed a stretch for Lazy Susan. I’d just fi red for inappropriate behaviour. that report. lifting. Perhaps I can take him for a settle for awake. I’d love to know exactly what Next time... Candid works on the coffee to say thank-you. Susan does catch the spring- behaviour, but that part is missing pension newsletter. When de-cluttering, if you are cleaning bug, though, and she from the thread. not sure whether to keep empties her drawers of old copies Big Bad Boss has a very silly something, ask yourself two of celebrity magazines, romantic habit of printing his emails to read @ Read more Confessions at: bit.ly/RKlOt2 questions: has it been useful in the novels of the more explicit sort, and them, and the rest of his pile of

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