Firms get flexible to keep staff

Flexibility over pensions and holiday time, for example, are both ways of making employers attractive to staff, in addition to saving on costs.

Typical benefits that companies can offer flexibly include the ability to buy and sell holiday time, tax-efficient loans to buy a bicycle, subsidised private medical insurance and childcare vouchers.

Some employers are going even further and are offering First Home purchase plans, and vehicle benefits packages.

A survey by the consultancy firm, the 2009 Aon Employee Benefits and Trends report looked at schemes at 650 employers in 13 different sectors of the economy. It found that 94 per cent of employers that have a flexible benefits programmes used it as a motivational tool, rather than as a means of cost-cutting.

Gareth Ashley-Jones, head of flexible benefits for Aon Consulting said: "It has been a tough year all round for both employees and employers. In many cases motivation might be ebbing, and flex is increasingly being seen as a cost-effective perk for staff who are doing a good job under very difficult circumstances.

"Flexible benefits recognise that everyone has individual needs and that people may not, for example, value private healthcare but will value assistance paying for childcare. More strategically, many companies are using the recession as a time to put in place a benefits programme in time for the recovery."