WHY FLEXIBLE REMUNERATION IS THE KEY TO HR STRATEGY

flexible remueration today

Being able to attract and retain talent is one of the main challenges companies face in these post-pandemic times. In this context, flexible remuneration is the key to HR strategy. But why?

Even before the year 2020, the labour market was already changing. Employees no longer valued a high salary and office perks as they did once. With millennials increasingly making up a more significant percentage of the workforce, the focus started to change.

Flexibility, autonomy, more control over their tasks and time, corporate training, and growth opportunities came as the primary sources of employee satisfaction. And the pandemic acted as an accelerator. From 2020 people were able to work remotely. That allowed them a better work-life balance and even gave people the possibility of relocating.

And there’s no way back. Flexibility and autonomy came here to stay. Flexible remuneration is part of this pack of perks that employees value the most today. In this article, you’ll learn why flexible remuneration is the key to HR strategy and how to implement it the right way.

Benefits of flexible remuneration

But first… why flexible remuneration? To make a short introduction in case you’re not familiar with the expression, flexible remuneration refers to when an employee receives part of the salary in cash and another part in kind.

It’s considered a win-win both for employees and companies. Employees, because they can access goods and services they would be paying for anyway as part of their salary, and even for a lower price because they’re exempt from taxes.

Companies, because they increase the value they give their workforce (hence, the return they get) without it representing a financial investment for the organisation.

With a limit of 30% of the gross annual salary, the “kind” part of the salary can be goods and services (e.g.childcare, food, transport, health insurance, training for companies).

Flexible remuneration is voluntary and highly customizable, given the fact that employees can choose which benefits they want to perceive and which proportion of their salary, up to 30%.

 

Training for companies: a great form of flexible remuneration

As we said above, providing flexible remuneration represents a benefit for employees and for companies, too. First, happier employees mean a more engaged and productive workforce, as research shows.

And secondly, the goods and services provided as kind can bring a significant return in the form of direct revenue for the business, as it can be things like training for companies, and other educational programs that will directly impact the quality of employee performance.

Now, how to choose the best training for companies? That’s a good question since while companies make an annual investment of $350B globally, some studies show the workforce still feels that they’re not qualified to perform at their best.

That’s why choosing the right training programme for your company is key for flexible remuneration to actually pay off. Here are some tips for choosing the right training for companies:

  • Consider the needs: Personal needs of your employees as well as those of the team.
  • Determine opportunities for development: Which stage is your business at? If you’re expanding to international markets, then the action could be focused on language training for companies. If you’re growing, maybe a project management course for some team leaders would be a great option.
  • Get feedback: Monitor the training and then get feedback from employees. That will help understand the impact of the development programme on people’s daily work.

At Classgap for Enterprise, we developed an effective methodology for training for companies that makes it easier for companies to train their employees in a more flexible and customized way. Learn more here.

Soft skills: the corporate training that matters the most

Speaking of choosing the right corporate learning programme for your organisation, learning soft skills is the best that can happen to your workforce and your business. Soft skills training is the key to unleashing the full potential of your employees.

What are soft skills and what’s the difference from hard skills? While hard skills are related to the ability to perform a certain task, soft skills have more to do with how a person performs the task and they enhance people’s ability to do it even better.

While for decades HR departments have been focusing on hard skills both for hiring candidates and training employees, during the past few years they realized that soft skills were extremely important and that many highly capable employees failed because a lack of soft skills.

Offering soft skills training as part of your flexible remuneration package will soon make a difference for your business.

Keys to developing a great flexible remuneration package

  • Excellent communication: Make sure to clearly explain the benefits of flexible remuneration to your employees and their rights to choose whether they want it or not, in which proportion, and which goods and services they can choose from.
  • Make a survey: If you’re not sure which type of flexible remuneration packages the people in your organisation would be interested in, make a survey to understand your employees’ needs.
  • Get feedback: Once you implement the flexible remuneration program, make sure you evaluate employee satisfaction.

If you follow these steps, your employees will be happier and your business will grow.