Social benefits: the employee lives not only with money

According to the report Tendencias en beneficios sociales 2021 (trends in social benefits), conducted by the company Cobee after a survey of more than 600 employees, two out of three workers would prefer to have a lower salary. Of these, two-thirds would prefer to receive €51,600 per year rather than €52,000.

Of course, there is a trick to the question. Nobody would choose to receive €51,600 rather than €52,000. However, if the first amount is given partially in the form of social benefits, then the result changes. Thus, Cobee offered employees two options in its survey: either to receive €52,000 over the year or to receive €50,000 but with included supplements such as a gym membership, health insurance, two movie tickets per month, an annual subscription to Netflix, and a donation of €10 per month to an association of their choice.

A more attractive remuneration

The non-cash compensation package was valued at €1,600. However, the non-cash compensation package proved more attractive than receiving €2,000 extra for most employees. This fact demonstrates that employees welcome the remuneration in social benefits, assuming that they meet their demands. Most employees under 35 years of age have this preference, i.e., over 75 % of the participants born after 1985 chose the option of receiving €50,000 and the social benefits package.

Therefore, social benefits translate into happier employees. We have already talked in other articles about the importance of well-being among a company’s staff. The introduction of social benefits in salary schemes can increase productivity, innovation, sales, and even lower turnover. Ultimately, all with one goal in mind: to increase the value of a company, a factor to which our Fair Value division pays so much attention.

Cobee’s study suggests that there will be an increasing trend to opt for a combination of cash and benefits over the next few years. Employees favourably receive this policy. However, companies do not usually offer them the social benefits they demand. 52% of the participants consider their company’s flexible compensation policies relevant. However, they also regret that they do not offer them what they need.

Contrasting demand and supply

What is it that employees demand? According to Cobee’s report, the five most requested employee benefits (in descending order) are health insurance, catering, training, gym membership, and subscriptions to entertainment platforms such as Netflix or Spotify. As a result of the pandemic, employees are increasingly interested in health insurance and training this year.

Are companies responding adequately to the demands of their employees? This survey clearly shows they are not. The top five benefits offered by companies are health insurance, luncheon vouchers, training, transportation, and childcare vouchers. If we compare supply and demand, we only find common ground in health insurance and training. Transportation, the fourth most popular social benefit offered by companies, is no longer of interest to employees after the coronavirus crisis and the implementation of teleworking.

Pensions and extra bonuses

Despite not appearing in the top 5, pension plans represent another of the star social benefits. The survey’s participants would devote, on average, 212 € of their salary to their pension plan, assuming that the company would commit to double this amount.

In addition to social benefits, other forms of flexible compensation have gained acceptance in recent years, such as the provision of extra remuneration based on objectives or a specific date. This measure can serve to increase employees’ emotional attachment to the company. According to these participants, the ideal time to receive this bonus would be when achieving objectives or after completing a year within the company.  Moreover, birthdays also appear as one of the preferred dates to receive this extra remuneration.

It seems evident that employees appreciate the idea of receiving part of their salary in an alternative way to the traditional payroll. Thus, companies that can implement an attractive social benefits system will attract more qualified and motivated employees.

After all, the employee lives not only with money…

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