20
d'Octubre
de
2015
Act.
20
d'Octubre
de
2015
A lot of voices are warning that there is no longer such thing as a job for life. One of the consequences of this is that people cannot depend on a salary for as long as they live. Each person's life cycles are constantly changing, as are their necessities. Flexible remuneration, which allows a company to reward its employees in the way that best suits their needs at any one time is gaining in popularity. At a conference day organised by Interban, different experts in the field spoke about the advantages of this form of remuneration.
Ten years ago, the consultants, Mercer HR Consulting, noticed that 48% of its employees preferred more time off to a higher salary. When distinguishing between the genders, men seemed to prefer more recognition and women more free days. Whatever the case, the weight of emotional remuneration has increased with every generation. While for baby boomers (born between 1945 and 1964) the proportion stands at 34% of the average salary, for generation X (1965-1981) it is 49%, while for generation Y (1982-1994) the figure is 63%. It seems clear, then, that when it comes to earnings, something more than money is increasingly required.
Tax benefits
"In taxation, the order of factors alters the product. According to how you structure the salary, you will pay more or less tax." So says Carles Quindós, associate of Cuatrecasas, Gonçalves Pereira, who stresses that if certain expenses are paid by the company instead of a traditional salary, the employees can end up reducing their tax costs, without it costing the company any more.
We are talking about vehicles, health insurance, restaurant vouchers, child care vouchers or training courses. "For it to be remuneration, it has to have a particular use. If you do not take the company car home with you, there is no remuneration. Nor does it make sense for me to buy it, if the company pays for it. The company has to pay for it directly," warns Quindós.
"The advantages for employees is that they get the product they want with an improvement in their tax situation," he says. Moreover, if the company can arrange a bulk purchase, it will no doubt receive a better price. Therefore, "there is a double saving: price and tax. Both sides are happy because you raise the salary without increasing costs," he says.
One of the star products is health insurance, which has an annual limit of €500 per insuree (including spouse and children it can rise to 2,000 euros). In the case of restaurant vouchers, there is a limit of nine euros a day, while nursery vouchers work the same way, but without a limit. "Incentives through assets have to be offered to all the employees in the company. They have to be kept for at least three years so as to avoid paying tax on them," says the expert. In short, it is about receiving a lower salary in exchange for the company directly taking on these types of expenses.
However, not all employees will have the same needs. That is why there is an agreement for new contracts between the company and the employee, "which specifies the changes in salary, or the money they will stop earning in favour of training, vouchers, etc.," says Quindós. This agreement can be renewed as the needs of each employee changes. At the same time, Quindós says that "as a maximum, 30% of the total remuneration can be benefits in kind."
The emotional part of salaries
Not everything in this world revolves around money and what can be counted. Pedro Rojas (@SeniorManager), director of Social Media in The Plan Company, talks about the importance of emotional remuneration for companies. "There is a double remuneration. Increasingly, young people see remuneration as one part monetary and one part emotional," he says.
Complementary benefits are seen as a way of feeling rewarded by the company. However, as for the company the important thing is savings, the productivity and satisfaction of clients, many of them do not take the value of emotional remuneration into consideration. "It generates savings, lowers costs and increases productivity. It is not used so much because of a lack of knowledge of it," says Rojas.
He explains that emotional remuneration can be divided into intrinsic elements (what the employee subjectively perceives as a benefit) and extrinsic elements (with a quantifiable cost for the organisation that the employee perceives as a benefit). "It is all subjective. The model according to hours no longer works, time is fluid. The objectives should not be fixed in time, but rather on each person's rhythms." This is something that can be taken advantage of in emotional remuneration. "Each employee is remunerated differently as necessary," claims Rojas, although he recognises that "the system will have trouble legally-speaking to adapt to the new situation."
Emotional factors
Rojas separates out three elemental factors that can be valued by employees. The first are the opportunities for development, which are related to managing talent. "People are still employed according to experience and not ability. It could be the case that you have spent 10 years in the same place but without feeling happy. What we have to see is that we use this talent," he says. At the same time, "the employee will also put value on training and learning new abilities."
The second of the factors is the work-life balance. "Flexibility is one of the fashionable issues. It cannot be the same for everyone; each person needs what is best for him or her," insists the expert. However, Pedro Rojas makes it clear that "the company has to know that you have a family and to take what might benefit you into consideration. It is not about giving the employee what he or she needs, but rather finding a balance that benefits the employee and the company." Finally, there is the welfare factor. "Everyone likes recognition, and if the company gives it to you, it creates reciprocity," argues Rojas.
In order to apply a system of flexible remuneration that takes the emotional element into account, Rojas insists that certain aspects need to be well defined: "the work flow of activities, having a clear job description, and updating and managing the time of the activities well." In practice, salaries need to be quantified, and the elements that will be included or not as part of the non-monetary salary need to be chosen. "It is good to include flexible and non-monetary options for everyone; but to do it transparently, so that everyone sees the benefits," he says. However, he warns that "it should not be implanted precipitately, the right timing is needed so that people can adapt to it, and so it does not create budgetary problems."
Edenred, teaching by example
Patricia Melfo is the director of Human Resources at Edenred in Spain. The company that offers solutions to companies through such things as its Ticket Restaurant voucher system, decided to teach by example and implanted a system of flexible remuneration.
"We introduced it four years ago when it was still not fashionable," says Melfo. "The first step is to convince the boss. The best thing is to make him or her see that they will end up paying less tax," she says. Melfo makes it clear that "you have to know your employees to know what the best thing is to offer them (training, child care, meals). Normally, people know what they want, so ask them and listen to them!" Nevertheless, it will always help to show them what types of flexible remuneration are available.
"The process is quite simple and is based on three elements: communication, administration and implementation," says Patricia Melfo. "When it is communicated, all of the means available should be used and then adapt it to the profile of the company and the employees," and "communicating it is not the same if you have more men than women."
The Edenred director recognises that "the administration is what costs most." You need to calculate the savings, the time of affiliation and have a new contract agreement in place. "It is hard at the beginning, but now 70% are using it, most prefer to be rewarded with child care, training, health services and transport vouchers," she points out. In the end, Melfo says, more than the savings in tax, the fact that the employees have their expenses separated into different vouchers allows them
Ten years ago, the consultants, Mercer HR Consulting, noticed that 48% of its employees preferred more time off to a higher salary. When distinguishing between the genders, men seemed to prefer more recognition and women more free days. Whatever the case, the weight of emotional remuneration has increased with every generation. While for baby boomers (born between 1945 and 1964) the proportion stands at 34% of the average salary, for generation X (1965-1981) it is 49%, while for generation Y (1982-1994) the figure is 63%. It seems clear, then, that when it comes to earnings, something more than money is increasingly required.
Tax benefits
"In taxation, the order of factors alters the product. According to how you structure the salary, you will pay more or less tax." So says Carles Quindós, associate of Cuatrecasas, Gonçalves Pereira, who stresses that if certain expenses are paid by the company instead of a traditional salary, the employees can end up reducing their tax costs, without it costing the company any more.
We are talking about vehicles, health insurance, restaurant vouchers, child care vouchers or training courses. "For it to be remuneration, it has to have a particular use. If you do not take the company car home with you, there is no remuneration. Nor does it make sense for me to buy it, if the company pays for it. The company has to pay for it directly," warns Quindós.
"The advantages for employees is that they get the product they want with an improvement in their tax situation," he says. Moreover, if the company can arrange a bulk purchase, it will no doubt receive a better price. Therefore, "there is a double saving: price and tax. Both sides are happy because you raise the salary without increasing costs," he says.
One of the star products is health insurance, which has an annual limit of €500 per insuree (including spouse and children it can rise to 2,000 euros). In the case of restaurant vouchers, there is a limit of nine euros a day, while nursery vouchers work the same way, but without a limit. "Incentives through assets have to be offered to all the employees in the company. They have to be kept for at least three years so as to avoid paying tax on them," says the expert. In short, it is about receiving a lower salary in exchange for the company directly taking on these types of expenses.
However, not all employees will have the same needs. That is why there is an agreement for new contracts between the company and the employee, "which specifies the changes in salary, or the money they will stop earning in favour of training, vouchers, etc.," says Quindós. This agreement can be renewed as the needs of each employee changes. At the same time, Quindós says that "as a maximum, 30% of the total remuneration can be benefits in kind."
The emotional part of salaries
Not everything in this world revolves around money and what can be counted. Pedro Rojas (@SeniorManager), director of Social Media in The Plan Company, talks about the importance of emotional remuneration for companies. "There is a double remuneration. Increasingly, young people see remuneration as one part monetary and one part emotional," he says.
Complementary benefits are seen as a way of feeling rewarded by the company. However, as for the company the important thing is savings, the productivity and satisfaction of clients, many of them do not take the value of emotional remuneration into consideration. "It generates savings, lowers costs and increases productivity. It is not used so much because of a lack of knowledge of it," says Rojas.
He explains that emotional remuneration can be divided into intrinsic elements (what the employee subjectively perceives as a benefit) and extrinsic elements (with a quantifiable cost for the organisation that the employee perceives as a benefit). "It is all subjective. The model according to hours no longer works, time is fluid. The objectives should not be fixed in time, but rather on each person's rhythms." This is something that can be taken advantage of in emotional remuneration. "Each employee is remunerated differently as necessary," claims Rojas, although he recognises that "the system will have trouble legally-speaking to adapt to the new situation."
Emotional factors
Rojas separates out three elemental factors that can be valued by employees. The first are the opportunities for development, which are related to managing talent. "People are still employed according to experience and not ability. It could be the case that you have spent 10 years in the same place but without feeling happy. What we have to see is that we use this talent," he says. At the same time, "the employee will also put value on training and learning new abilities."
The second of the factors is the work-life balance. "Flexibility is one of the fashionable issues. It cannot be the same for everyone; each person needs what is best for him or her," insists the expert. However, Pedro Rojas makes it clear that "the company has to know that you have a family and to take what might benefit you into consideration. It is not about giving the employee what he or she needs, but rather finding a balance that benefits the employee and the company." Finally, there is the welfare factor. "Everyone likes recognition, and if the company gives it to you, it creates reciprocity," argues Rojas.
In order to apply a system of flexible remuneration that takes the emotional element into account, Rojas insists that certain aspects need to be well defined: "the work flow of activities, having a clear job description, and updating and managing the time of the activities well." In practice, salaries need to be quantified, and the elements that will be included or not as part of the non-monetary salary need to be chosen. "It is good to include flexible and non-monetary options for everyone; but to do it transparently, so that everyone sees the benefits," he says. However, he warns that "it should not be implanted precipitately, the right timing is needed so that people can adapt to it, and so it does not create budgetary problems."
Edenred, teaching by example
Patricia Melfo is the director of Human Resources at Edenred in Spain. The company that offers solutions to companies through such things as its Ticket Restaurant voucher system, decided to teach by example and implanted a system of flexible remuneration.
"We introduced it four years ago when it was still not fashionable," says Melfo. "The first step is to convince the boss. The best thing is to make him or her see that they will end up paying less tax," she says. Melfo makes it clear that "you have to know your employees to know what the best thing is to offer them (training, child care, meals). Normally, people know what they want, so ask them and listen to them!" Nevertheless, it will always help to show them what types of flexible remuneration are available.
"The process is quite simple and is based on three elements: communication, administration and implementation," says Patricia Melfo. "When it is communicated, all of the means available should be used and then adapt it to the profile of the company and the employees," and "communicating it is not the same if you have more men than women."
The Edenred director recognises that "the administration is what costs most." You need to calculate the savings, the time of affiliation and have a new contract agreement in place. "It is hard at the beginning, but now 70% are using it, most prefer to be rewarded with child care, training, health services and transport vouchers," she points out. In the end, Melfo says, more than the savings in tax, the fact that the employees have their expenses separated into different vouchers allows them