WHY OFFER FLEXIBLE REMUNERATION TO YOUR EMPLOYEES?
Wondering which key steps to take in this year’s HR strategy? Flexible remuneration could be a good answer.
As you probably know, flexible remuneration means receiving part of the salary in cash and another part in kind. It can be anything from childcare, food, transport, health insurance, and one of the best options: training for companies. It can take up to 30% of gross annual salary.
It’s a win-win both for employees and the company. While it allows employees to enjoy goods and services at lower costs (as it’s exempt from taxes), it doesn’t represent a financial investment for the company.
Flexible remuneration can improve employees’ life quality by allowing them to enjoy goods and services that they would need to pay for anyway, exempt from taxes (IRPF), without compromising their salaries.
There are many benefits that come with flexible remuneration. In this article, we dive deep into how you can use flexible remuneration as an HR strategy to strengthen your business’s teams.
Why flexible remuneration is the key to HR strategy
Now you know more about flexible remuneration benefits, you may be wondering how it’s key to the HR strategy.
Well… employee perks are always good for business growth. After the pandemic, flexibility is one of the most important benefits a company can give its employees. People discovered the value of work-life balance and they don’t want to go back to the old dynamic.
So if you want to attract and retain talent, providing flexible remuneration is one of the key HR strategies to achieve that. Let’s go through the positive aspects of flexible remuneration:
- It’s a win-win both for employees and the company.
- It’s voluntary and customizable, which helps employees feel autonomous and own their time and other assets.
- Flexible remuneration is also a great way to train employees’ soft skills since training for companies is a great way to implement flexible remuneration.
Why soft skills? While for many years HR teams have been focusing on hard skills when it came to valuing employees’ knowledge, providing soft skills corporate training for your employees (such as leadership, oratory, assertiveness, or coaching) is now known to be essential for business growth.
Consult legal limitations of flexible remuneration to make sure you’re implementing a great flexible remuneration plan for your company.
Why training as a form of flexible remuneration?
Training for companies is an essential step in the path to growth and success in the life of an organisation. And as we said above, for many years companies have been focusing on hard skills when deciding to hire a candidate or train an employee. But nowadays, the focus has changed.
HR teams realized that many of their employees excelled at what they did but their lack of soft skills was a hurdle to any kind of growth. You can be an excellent accountant, but if you can’t communicate with the other members of your team with empathy or if you’re a manager that can’t properly lead their department, then your skills aren’t enough.
Soft skills are then a great part of any employee’s ideal skillset. The good news is that training for companies is the answer to easily developing those skills, and flexible remuneration is an excellent way to implement it.
What are the keys to flexible remuneration?
Flexible remuneration is not the same as social benefits, although these terms are often used interchangeably. While social benefits depend on the collective agreement or other matters such as company policies, flexible remuneration is voluntary and entirely customizable by the employee.
As it’s voluntary and customizable, the employee can choose if they want to perceive any part of their salary in kind and in which proportion (up to 30%), and which goods and services (among the ones offered by the company) they want to perceive within that ratio.
The products and services the employees get are below the market cost because they are exempt from taxes. This is because these perks are non-taxable products and services. In flexible remuneration, there’s no cash handover. There can be cheques, vouchers, or similar elements to interchange for the service or good.
5 tips for designing a flexible remuneration plan
Here are 5 keys to designing and implementing your flexible remuneration plan successfully:
Explain flexible remuneration to your employees: For your flexible remuneration plan to be perceived as a benefit, you need to make sure they understand all the positive aspects that are in it for them.
Evaluate and get feedback: There are times when employees and HR departments aren’t on the same page when it comes to benefit perception. That’s why you need to make sure they’re happy with the company’s flexible remuneration programme. Performing surveys is a good way of keeping track of employee satisfaction with the organisation’s flexible remuneration policy.
Offer soft skills training as part of your flexible remuneration programme: That way you’ll be able to optimize even more the benefits both for employees and the company.