KEYS FOR UNDERSTANDING FLEXIBLE REMUNERATION
Flexible remuneration is a great way to improve your business’ performance and your employees’ well-being. But why’s that? When thinking about business growth and employee retention, flexible remuneration is a form of combining both.
Thanks to this way of compensation, companies can give their staff more benefits without increasing the wage bill. If you don’t know what flexible remuneration is, here’s a short definition:
Flexible remuneration is a form of compensation by which companies pay employees part of their salaries in cash and another portion in kind, such as goods and services. The advantage here is that those goods and services are exempt from taxes and employees would have to spend money on them anyway. So by making them part of their salary, they save money.
But let’s go deeper into flexible remuneration and the keys to understanding why you should implement it in your company.
Flexible remuneration: something more than just money
You already know that flexible remuneration helps employees make the most out of their salaries, and companies bring the best to their employees. Of course, saving money is a great incentive when it comes to employee satisfaction, but there is more to that than just money.
Flexible remuneration is an excellent form of looking for new ways to provide employees with great value to improve performance at their jobs and increase their quality of life, too. Here are some criteria to have in mind for flexible remuneration to have a successful impact:
- Inform employees of its existence.
- Make sure you offer them what they need.
- Communicate exactly how it works and which their options are.
- Use it to provide more than goods and services: Training for companies, for example, is a great way to add value to your employees and contribute to their professional development and the growth of your business at the same time.
Flexible remuneration: everything your company needs to know
¿Do you know exactly how flexible remuneration works? Here are the main aspects of flexible remuneration you need to know:
- It’s voluntary: Different from social benefits, flexible remuneration is a benefit a company can choose to implement and employees can choose whether to perceive it or not. The staff can also choose which part of their salary they want to perceive in cash and which one in kind.
- Up to 30%: employees can have a percentage of their salary in kind up to a maximum of 30% of their gross annual salary.
- It’s customisable: companies can offer a wide variety of goods and services as part of flexible remuneration and employees can choose among those options.
- Tax-free: their net salary increase because the goods and services you include in the program are exempt from taxes. Being these goods and services things they would have to pay for anyway (like childcare, parking, transportation, food, etc.), it represents a saving.
- Win-win: although flexible remuneration is often perceived as a benefit for employees, it’s a win-win if you use it well. It’s proven that happy and satisfied employees are more productive. Also, if you include things like training for companies in your flexible remuneration program, you’ll be providing great value and also working on your business’s growth.
What are the different forms of flexible remuneration?
But… what can I include in the company’s flexible remuneration program? Here are some ways in which companies can use flexible remuneration:
- Company shares.
- Language training for companies: Language training is among the basics that employees need.
- Soft skills training for companies: learning soft skills like oratory, leadership, assertiveness, or coaching, it’s key both for professional careers and business growth.
Flexible remuneration: why offer it to your employees?
So now that you know the keys points, let’s talk about why you should offer flexible remuneration to your employees.
Let’s take a look at these 2 main benefits of implementing it as a form of compensation:
- Improve employee attraction and retention: when the search for talent is a global challenge for companies, flexible remuneration contributes to improving employee attraction and retention by providing interesting benefits to employees, such as training for companies and soft skills education.
- Business growth: last but not least, flexible remuneration is an excellent way to upskill your staff in the areas you want them to dominate (like languages, soft skills, management, technology, and more) without making an additional financial expense.
In this sense, have you thought about including training for companies in your flexible remuneration program?
Here are some ideas:
- Soft skills training: companies with great leaders who know how to manage their teams effectively, communicate assertively and guide their teams are the ones that stand among their competition.
- Language training: it’s essential your employees dominate English and at least one additional language that will help the expansion of the business.
- Project management: how can you get there if you don’t know where? Project management is key to achieving the company goals.
- Digital marketing: in this globalised world where everything goes faster every time, it’s essential to dominate the basics of digital marketing.