Incentives for Growing Companies No.3: Flexible Remuneration Packages
Offering a rounded competitive remuneration package can be the difference between attracting or losing the best talent. Skilled, talented, driven individuals are in high demand. Therefore, if two companies are offering similar pay, it may come down to what else is offered e.g. remote working, flexible hours, training opportunities, qualifications etc.
Let’s take an example. Two companies are offering roles with similar levels of responsibility. Company A offers a salary of £70,000, 20% bonus and “standard” benefits i.e. mandatory annual leave, standard pension contribution, sick pay, minimum maternity leave. Company B, however, offers a lower salary at £60,000, the same bonus opportunity (20%) but a series of very attractive and tailored benefits to suit their employees - flexible working hours, remote working, childcare vouchers, gym memberships, training opportunities and more.
Is it obvious that candidates will take the offer of a greater salary, and go with Company A? Well, this might have been the case 20 years ago, but Millennials place much greater value on non-pay items such as work life balance, with 40% of Millennials stating that a benefits package is more important to them than a basic salary.
As a Growing Company, one might believe the Company A approach is the way forward, but it is important to consider what your current and prospective employees actually value, and perhaps offer a Company B approach (or hybrid).
This raises the question, what does an attractive flexible remuneration package look like for an employee? Well, this very much depends on an individual’s personal circumstance and the companies’ strategy. However, the new working generation will certainly expect more than just standard benefits. Below, we provide examples of what can be included in flexible remuneration packages:
- Competitive remuneration – this includes a salary in line with market standards as well as performance based variable pay i.e. annual bonus or long-term incentive plans.
- Flexibility / work-life balance – COVID-19 proved that remote working is possible, therefore most employees will expect some flexibility in how they work whether this be the hours, or location. This aligns with offering work life balance and a culture that promotes this.
- Benefits – employees will expect standard benefits such as health insurance, retirement plans, annual leave etc but additional benefits are more frequently being offered, such as “unlimited” annual leave, gym memberships, childcare vouchers, discounts on services / equipment company offers, dental care, mental health counselling etc.
- Non-monetary benefits – these typically include small regular perks such as lunch allowances, recognition prizes, gift cards, team away days etc. These provide a “feel good” factor to employees and allow them to feel valued.
There are a many different benefits to be offered in a flexible remuneration package, therefore its important that your company’s offer aligns with your strategy, and also makes you stand out against peers when it comes to recruitment and retention.
Incentives for Growing Companies
This article is part 3 of 10 of our new occasional series of podcasts, videos and articles on incentives for business growth. Covering everything from salary benchmarking to managing compensation in times of change.