"Empowerment is not an empty word; it's the essence of modern HR. With flexible reward plans - also known as cafetaria plans - we're not just giving employees options; we're handing them the reins to their own fulfillment.”
Kathleen Veugelen, Executive Manager, People Services at KPMG in Belgium, explores the transformative potential of flexible reward plans, as it redefines employee benefits to empower individuals while driving organizational success.
When I see the phrase 'War for talent', I'm immediately transported to a scene from Braveheart! But recruitment is kind of a competition whereby employers try to attract the most highly skilled candidates. Is this becoming the new norm?
Kathleen Veugelen: Definitely! In Belgium, offering an attractive salary package has long been a cornerstone of employee benefits. However, as the landscape of work and business evolves, so do the expectations of employees. Traditional salary approaches may no longer be enough to meet the diverse needs and preferences of the modern workforce. For example, many individuals now prioritize employers who offer them the freedom to take as much time off as they choose or to work from anywhere. Or, when offered a company car, they would rather use that budget for alternative mobility just because they live close to the office and would rather use a bike or public transport to get to their destination. Understanding this shift, KPMG launched our Flex Reward Tool as one of the first on the market about 10 years ago – a revolutionary concept in employee benefits that puts the power back into the hands of the employees.
Interesting! So, what exactly is the Flex Reward Tool and how does it work?
Kathleen Veugelen: Flex is a modern twist on the classic salary package. While the overall compensation remains the same, employees are given the freedom to decide how they want to allocate their benefits. It's like having a budget - or a "flex bucket" (comparable with let’s say a streaming service subscription) - filled with various options such as bonuses, a year-end premium, a part of their monthly salary, or even fewer holidays to create budget for alternatives. Employees can then use this budget to customize their benefits according to their individual preferences. Whether it's multimedia devices, leasing a bike, additional holidays or insurances and pension savings, the choice is theirs. An employee might opt to exchange their company car for an e-bike, and then use the savings to invest in items like an ergonomic chair for their home office or a new smartphone! Prioritizing individual preferences enables an organization to enhance its attractiveness as an employer while fostering increased employee engagement and commitment.
What are the benefits of adopting a Flex Reward Tool for employers?
Kathleen Veugelen: Implementing a flexible reward plan comes with plenty of benefits for employers. Firstly, automation streamlines the ordering and delivery process, minimizing HR follow-up. It really is set up like an online shopping experience where employees fill up their shopping cart and go to the check-out.
In addition, budget neutrality is ensured with automatic calculations, providing insights into social security contributions, VAT, corporate tax and administration costs. The comprehensive HR administration portal offers extensive reporting capabilities and customizable settings, meeting all necessary security and GDPR requirements.
And let’s not forget the obvious benefit: by automating these choices and benefits, HR is liberated to contribute value to the organization through initiatives such as fostering learning and development opportunities or ensuring the organization maintains optimal talent alignment with strategic objectives.
How does a flexible reward plan enhance the employee experience?
Kathleen Veugelen: Flex empowers employees by granting them control and flexibility over their benefits package. With a user-friendly interface, employees can easily navigate through their options, seeing immediate deductions from their budget as they make selections. The tool offers a wide array of benefits, from digital signing capabilities to detailed simulations of the impact of their choices. Clear communication and access to order status further enhance the user experience, ensuring employees feel valued and supported.
What’s also super cool is that with a simple click of a button, employees can view their “Total reward statement” which provides a complete overview of their current pay package. This was specifically designed because employees are frequently entitled to a comprehensive remuneration package. However, it is evident that they are not always fully aware of its exact contents. With our online Total Reward Statement, the appreciation of the total reward package increases, and an employer can give a concise and clear explanation of each benefit.
Alright, I can already see people in finance rolling their eyes thinking “why should I care?” Is Flex only an HR matter?
Kathleen Veugelen: Well, contrary to popular belief, Flex extends beyond just HR! With the tool and interfaces with external providers for bikes, multimedia, etc. the order status and invoices are streamlined to ensure compliance with tax and accounting regulations. The tool provides a holistic solution that caters to various stakeholders within the organization, aligning financial and administrative processes for maximum efficiency.
So, the next time you see your accounting colleague you should simply say “you’re welcome” with a big smile on your face!
What support is available for clients looking to implement a Flex Reward Plan?
Kathleen Veugelen: Our team offers end-to-end support in implementing Flex Reward plans. With expertise in tax, legal, HR, finance, accounting, and IT, we guide clients through every step of the process. From initial consultation to ongoing support post-implementation, our dedicated project managers ensure a smooth and successful transition. Our advanced tool is designed to optimize user experience while minimizing administrative burden, with flexibility to adapt to evolving needs and legislation.
The tool represents a paradigm shift in employee benefits, offering a win-win solution for both employers and employees. By embracing flexibility and innovation, organizations can reshape their approach to compensation, fostering a culture of empowerment and satisfaction among their workforce – truly making a difference.
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