MORE and more small businesses are offering flexible benefit (flex) schemes for their employees according to a recent KPMG study.

Research carried out by Opinion Leader Research revealed that 25 per cent of small companies (turnover £5million to £500million) now offer their workforce flexible benefits and a further 18 per cent intend to introduce such a scheme in the next year.

David Forge, senior partner for KPMG in Kent said: "These statistics are encouraging as it shows an interesting change in attitude towards flexible benefits.

"If the figures continue to rise in this way, we could have a situation where nearly half of middle market companies will be following the lead of larger companies and offering flexible benefit schemes within two to three years.

"This has to be good news for the workforce across the South East and is a sign that such schemes are more widely recognised as effective recruitment and retention tools.

"However, the results of the survey have shown that there is some way to go to help the remaining companies understand the true value of such schemes to them."

The flip side to the statistics is that 74 per cent of the employers surveyed do not offer flexible benefits schemes, and of those that don’t 77 per cent say have they have no intention of introducing one.

This demonstrates that there is still a lack of awareness among small businesses of the benefits available from introducing flex.

Mr Forge believes this is down to the myth that these schemes are costly or impractical and that some still confuse flexible benefits with flexible working hours.

The research also highlights that employers believe their employment costs have risen due to national insurance contribution increases and overall wage inflation.

Some 56 per cent said that NIC represented a significant cost increase and 42 per cent agreed it was a minor cost increase. And 91 per cent believed wage inflation was costing their business either significantly or in a minor way.

Mr Forge said: "Small businesses are bound to be more focused on their cost base and many simply perceive any kind of flexible benefit as a cost they cannot afford.

"In fact, what they do not realise is that by introducing flexible benefits such as childcare vouchers, extra holiday days, computer leasing and subsidised staff lunches, they can actually save money overall."

For example, an employee who opts for childcare vouchers as a flexed benefit will have the money directly deducted from their salary reducing the amount of NIC they pay.

The employer also benefits as they save on the full employer NIC payments so both the employee and the employer are saving money.

One employer who has adopted flexible benefits and seen a noticeable difference is SA Brain & Company Limited, one of the largest independent brewers in England.

Debra Wood-Lawson, group HR Manager, said: "We introduced flexible benefits in November 2004 and have not looked back. In an employment market such as ours, we are not just competing with other breweries but with all other businesses in the area.

"We want our employees to feel that they benefit from the flex scheme which allows them to tailor the package to suit their individual needs and we hope that this will ultimately result in them viewing SA Brain as an employer of choice.

"The flexible benefits we offer include childcare vouchers, home computers and buying and selling holidays. The response from employees to the introduction of the scheme has been overwhelmingly positive.

"Moving forward we are looking to increase the range of benefits within the scheme by utilising the savings achieved and this should become an increasingly important recruitment and retention tool."

Employers surveyed were also asked about flexible working and 59 per cent said their business does not offer flexible working hours although 29 per cent of those said they would consider it in the future, while 52 per cent agreed it was difficult to offer flexible working arrangements such as job–sharing and home working.

Mr Forge said: "With flexible working hours the clue is in the title. A company can be as flexible as they wish about working arrangements and manage what suits both them and their employees. It doesn’t have to cost them anything."

"I would encourage all companies to think seriously about both flexible working and flexible benefits as two issues that can put them on top of the list for employees when it comes to recruitment and retention."