New year, new salary! How important is flexible compensation and extra-payroll benefits in human resource management?

With the start of a new year, there is (almost) always an expectation on the part of employees, of a payroll increase. For those who receive the national minimum wage, this update is mandatory - at the beginning of this year (2018) the national minimum wage changed to € 580.00 -, but for all other cases, there is no obligation.

Personnel costs have a significant weight on the costs of a company, since the tax burden is huge and a small increase for the employee, often means a significant “trigger” in the personnel costs and tax burden section, for the entity employer. For this reason, the negotiation of the national minimum wage always generates very intense discussions between entrepreneurs and trade unions.

We know, on the other hand, that the wages have (some) weight in the motivation of employees. How then can companies and their Human Resources departments manage this ambivalence?

Incentives and benefits can be an alternative to consider. Because? Because most are tax free and others even bring tax benefits.

Some examples:

  • Health insurance
Health insurance is a benefit that anyone would like to have, it is essential today, as we know that, although our health system is one of the “flags” of our country, it has been degrading. If the company negotiates with the insurance company, it will be able to obtain very interesting prices and in the cost / benefit , the benefit in terms of employee satisfaction will be higher than the cost.

  • Daycare Check
Ticket Creche is a social title for child support with tax and labor benefits.

Intended for the payment of daycare centers, kindergartens and nursing homes, it is a social benefit granted by the company to the worker totally exempt from IRS, TSU and with a 40% tax increase in IRC (regulated in DL 26/99, of 28 of January).

  • Agreements with gyms
We know that nowadays a healthy lifestyle is increasingly attracting Portuguese people and physical exercise is part of that. Why not negotiate with the gym near the company, attractive monthly fees, paid in full by the company or at a reduced cost for the employee?

  • Company car
A benefit that is quite frequent, for intermediate/senior management and that brings advantages to the company and leads the employee to have a good monthly savings, either financially or in terms of lost time (who travels by public transport, you know delays are a constant).

There are other benefits, also very well seen by employees, such as the flexibility of schedules and in certain periods being able to work from home (for those with children), will undoubtedly be seen with very good eyes.

When we talk about motivation and satisfaction, it never hurts to mention that employees are highly valued (there are studies in this regard) recognition, perspectives in terms of career management and the possibility of acquiring new skills through a good internal training plan .

Do you know what your people value most?

Of course, the benefit plan must be accessible to everyone, meeting the expectations of the employee and also the company.

Retaining and attracting new talent is undoubtedly a huge challenge for all companies and for people management specialists. As Daniel Goleman says in his book Triple Focus, it is essential to have internal, external and other focus.

Don't forget, happy people make happy organizations!

By Lina Matos - HR Manager