Sustainable Rewards: Let your Employees choose their Benefits
What if you let your employees choose how they want to be paid?
During a recruitment process, the discussion inevitably turns to salary. A talented job seeker knows their potential value in the job market and may even have other opportunities in front of them with other companies. Work environment, home-to-work commuting time, and personal development are indeed factors that influence a job seeker, but at the end it all comes down to “how much” for most people.
In today’s job market, a potential employee knows he needs to look at not only salary, but also the other perks a company offers. Function car, fuel card, pension plan, health care … a smart job seeker (the one your company really wants) knows exactly how much each of these options is worth and carefully takes them into account when making his decision. Moreover, in many countries, those alternative ways of payment are an economically creative way to give more by paying less. Leading companies find more and more creative and different ways to package compensation.
While offering employee benefits is an effective way to attract talent, it can be complicated to find out which reward package best fits current and future employees.
How well would it be received if you offered an interesting health care plan, but no pension plan? Would that potential manager have signed if you had given him the opportunity to upgrade his car? And what about the expert who wanted to maximize his cash revenue and to whom you said that the fuel card wasn’t exchangeable even if he came to work each day by bike?
What if I told you that there is a solution to better manage those discussions and handle those “what if” scenarios? You’d probably say you’ve read this article’s title and you would be right!
What if you could let the employee decide what he wants and which package suits him best? And even better, what if you could tell him that he could change his package whenever he wants throughout his career at the company? In other words, let him accept your offer and then choose which employer-paid benefits he wants.
How would you do this?
It’s actually pretty straightforward.
The answer lies in offering a Flexible Reward Package, in which you provide your employee with a total number of “points” he can use in his salary package and a nice friendly tool with which he can manage his choices. The tool would contain a catalog of benefits with their values in points and some related information. From a simple “1 point equals 1 euro gross salary” rule, the employee is then invited to create his own shopping list from the benefits offered.
Behind the scenes, the company can even influence its employees towards one or another benefit with some creative point-to-benefit ratios. Let’s say your employee wants cash. In that case, 10 points spent will get him 6 euros. But a quick look at the other options will show the new worker that 10 points can give him 8 euros worth of transportation by train or even 11 euros worth of third-party formations. The situation easily leads to a win-win scenario where the employee can get a better deal for himself and fewer employer costs for the company.
After that, explaining it to your candidate is quite simple. Prepare a few benefit packages scenarios, enter the employee points into the wallet you’re offering, and your future recruit is led to an interesting game where he can imagine everything. “Well, that company knows how to make a salary offer that’s fun! Working for them sure looks motivating!” Too much? Well you know what I mean.
If your employee is hesitant or uncertain about this new way of receiving Sustainable Rewards, that’s OK. Simply invite him to select a regular package or give him everything in cash, but let him know that he can change whenever he wants for whatever he wants.
Feeling better about this yet?
In Belgium, this concept is already on the move. Big companies are trying out this new flexible salary vision. And the new “cash for car” option where an employee can refuse a car in exchange for a euro compensation proves that even the government has considered this idea.
Adessa Group has recently implemented this in large bank (15.000 employees). More to come on this later.
So, there you have it – a new dynamic vision on how to get your employees what they want by letting them assign a part of their salary and/or bonuses towards their personal benefit choices.
Post by Rudy Lejeune – SAP HCM Consultant at Adessa