During the pandemic, Latvian companies faced unprecedented challenges around remote working, when the entire corporate culture came up for overhaul.1 The biggest challenges arose from the need for flexibility as the traditional eight-hour working day at the office was upgraded with the option to connect remotely at the employee’s convenience. Some companies cancelled the full-time office presence requirement altogether and set up alternative working arrangements with variable hours, places and conditions. Flexibility became a key aspect in keeping employees motivated and loyal. This article explores the rapid development of flexible reward schemes.
Flexible reward allows employees to supplement their remuneration with goods or services (meals, contributions into private pension funds, health insurance) by joining the employee bonus scheme of their choice. According to the U.S. Bureau of Labor Statistics, in 2021 flexible reward was available to 31% of central and local government employees, 35% of employees in the education system, and only 11% of people employed by private companies.
Such a reward scheme allows the employees to choose benefits they need, and their net salary is in fact increased by benefits that are not taxable because of reduced tax liabilities.
The popularity of flexible reward is mainly due to benefits at company level.
If your company is considering launching a flexible reward scheme, there are various factors to address. Your corporate mentality, ethics and principles lie at the heart of it.
Your company should consider both short-term and long-term methods for financing flexible reward. This involves not only planning your finances and adopting or varying your benefits package but also the availability of administration staff to respond to your employees about the content, processes and administration matters of your scheme.
Implementing a flexible reward scheme requires careful planning. Data should be analysed and communicated to ensure fairness, transparency and objectivity. Companies that launch their flex scheme successfully can expect higher levels of employee motivation and productivity.
PwC invites you to a free webinar "Diversity in pay and fringe benefits: present or future?" on 17 May at 10:00. PwC experts from the Baltics and Romania will be discussing the advantages of an individualised personnel strategy and how this can contribute to your company’s competitiveness in the labour market. For details click here.
PwC US has carried out HR Tech Survey 2022. We believe that MindLink.lv subscribers, too, might be interested in its findings, as they relate to one of the traditional corporate processes – human resources (HR), or more precisely, investing in HR technologies. HR technologies in this article mean IT systems that enable the recording of HR processes, such as vacations, time sheets, training courses, hiring and firing. The survey interviewed 688 HR leaders, who answered questions about their technology challenges and achievements. The full survey is unfortunately restricted to the US market, but a summary offering many valuable insights is available here. This article explores what we see as key findings.
There are various programmes out there aimed at increasing a company’s sales by raising the productivity of its employees joining the programme, by increasing customer loyalty etc. Cross-border programmes are also implemented in Latvia, and their tax issues are very topical as well as complicated. This article explores employee incentive programmes in the light of a recent VAT ruling from the Court of Justice of the European Union (CJEU).
Dropping all the hype about the Great Resignation and stiff competition for talent, we invite you to look at investing in your people from a few rational down-to-earth perspectives. Based on a number of PwC surveys, you might end up finding a good argument in your budgeting process in favour of investment initiatives targeting your people.
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