Advantages of Cafeteria plans (Flexible Benefit Plans)
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Employees choose benefits to meet their needs, and value these benefits more highly.
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Employers and employees share the responsibility for providing benefits.
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During periods of change (including merger and acquisitions), flexible benefits help to harmonise rewards.
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Employers provide benefits at a known cost that is fixed regardless of the choices that employees make., so allowing them to cap future benefit costs.
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Employees have a true idea of the full worth of the benefits package they receive and employers do not provide benefits that are not valued.
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Employees are given a sense of control and involvement by having a choice.
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Dual career couples avoid having benefits duplicated by their respective employers.
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Employers are seen to be more responsive to the needs of an increasingly diverse, demanding and ageing workforce.
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A competitive benefits package is valuable in attracting and retaining key personnel.
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The awarding of benefits such as company cars becomes less divisive.
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Employers' demands for flexible working practices are more justifiable if employees enjoy flexible benefits.
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Helps to align the total reward strategy to the HR and business strategies.
Disadvantages of Cafeteria Plan (Flexible Benefits Plans)
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Employers find them complex and expensive to set up and maintain (although new technology is reducing both the cost and administrative burden).
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The choices made may cause problems both to employers and employees