Fixed Vs Flexible: The Future of Employee Benefits 

Fixed vs Flexible Employee Benefits
We explore the key differences between fixed benefits and flexible benefits, and how the latter is emerging as the solution of choice for companies looking to modernise and position themselves above the competition.

In today’s highly competitive SME landscape, the right employee benefits package has the potential to empower your workforce and modernise your workplace.

Traditionally, companies have offered fixed benefit packages providing a set array of perks to all employees regardless of their individual needs. However, as workforces become increasingly diverse and the demand for more adaptable working environments grows, the limitations of fixed benefits are becoming evermore apparent. Enter flexible benefits – a revolutionary solution that empowers employees to tailor their benefits to suit their unique circumstances, and allows businesses to create bespoke plans that work for them.

In this blog post, we’ll explore the key differences between fixed benefits and flexible benefits, and how the latter is emerging as the solution of choice for companies looking to modernise and position themselves above the competition.


Fixed Benefits: The Traditional Approach 

Fixed benefits do exactly what they say on the tin – they’re a set package of benefits that all employees receive regardless of their individual preferences or requirements. These benefits typically include basics such as health insurance, retirement plans, and perhaps some additional perks like gym memberships or childcare assistance. While fixed benefits provide a degree of uniformity across the workforce, they often fall short in meeting the diverse needs and preferences of modern employees.  

One of the main drawbacks of fixed benefits is their lack of customisation. Employees may find themselves paying for benefits they don’t need or use, while simultaneously lacking options that could greatly benefit them. This can contribute to lower staff satisfaction and increased employee turnover, all at the expense of the employer.  


The Rise of Flexible Benefits 

Flexible benefits represent a paradigm shift in the way companies approach benefits and the employee experience as a whole. Instead of offering a one-size-fits-all package, flexible benefits allow employees to choose from a menu of options based on their individual needs and preferences. These options can include everything from health insurance and retirement plans to wellness programs, retail perks, and professional learning opportunities. 



The cornerstone of flexible benefits is customisation, allowing SMEs to tailor their benefit offerings to meet the diverse needs of employees. For example, a working parent may prioritise childcare assistance or flexible work arrangements, while a recent graduate may value student loan repayment options or professional development opportunities. With flexible benefits, each employee can create a benefits package that aligns with their stage of life, personal circumstances, and long-term goals. By empowering employees to select the benefits that matter most to them in this way, companies demonstrate a commitment to employee satisfaction and well-being. This not only enhances the overall employee experience, but also fosters a sense of ownership and autonomy among team members and helps to attract and retain top talent. 


Tiered Benefits 

In addition to customisation, flexible benefits often incorporate tiered structures that allow employees to choose from different levels of coverage or perks within each benefit category. This tiered approach provides flexibility and affordability, ensuring that employees have access to the benefits they need without breaking the bank. For example, health insurance options may range from basic coverage with a lower premium to more comprehensive plans with higher premiums and lower out-of-pocket costs. 


Employee Credits 

Flexible benefits programs often utilise a credit-based system, where employees are allocated a certain number of credits that they can use to purchase the benefits of their choice. This approach not only encourages careful consideration of benefit options but also empowers employees to prioritise their spending based on their individual needs and preferences. Additionally, employee credits can be adjusted annually to accommodate changing circumstances or life stages, further enhancing the flexibility and adaptability of the program. 



As SMEs grow and evolve, so too do their needs and the needs of their employees. Unlike fixed benefit packages, which can be cumbersome and inflexible to modify, flexible benefits offer unparalleled scalability. Whether a business is expanding its workforce, entering new markets, or undergoing organisational changes, flexible benefits can easily adapt to accommodate shifting priorities and demographics. This scalability ensures that employee benefits remain aligned with the company’s objectives and employee preferences, fostering a culture of agility and responsiveness that is essential for sustained growth and success. By embracing flexible benefits, businesses can future-proof their benefits programs and position themselves for continued prosperity in an ever-changing marketplace. 


With 80% of employees stating that they’d choose improved employee benefits over a pay rise, it’s clear that rigid, outdated benefit programs can simply no longer meet the expectations of modern professionals. To attract and retain top talent, companies must embrace flexibility and customisation in their employee benefits offerings. Flexible benefits not only meet the evolving needs of employees but also demonstrate a commitment to their well-being and satisfaction. By providing choice, value, and empowerment, flexible benefits pave the way for a happier, more engaged workforce and grant businesses a competitive edge in the marketplace.  

 How adaptable are your employee benefits? If you’re considering a refresh, get in touch with us today. 

If you’re a HR professional looking to choose a more flexible benefit provider for your company, read our guide on pitching to the board. 

“Having access to benefits has made such a difference to me and my coworkers, especially during the cost-of-living crisis. We’re able to use our Zhoosh benefits to save money on regular expenditures, like weekly shopping, as well as bigger treats and experiences for our families. The app is super easy to use and we quite often chat about the different benefits we’ve used and where. None of the places I’ve worked previously have had a benefit scheme in place, but now I don’t think I’d accept a job without it!”
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