Flex Reward: In uncertain times, flexible rewards are even more important
In a rapidly changing world, the importance of flexible rewards is growing. Changing employee needs, combined with changing business and work landscapes, are forcing organizations to be more agile. Moreover, the need for flexibility has been further reinforced by the COVID-19 pandemic and flexible wages and mobility are fast-becoming integral parts of the future. A good digital platform is indispensable to making your remuneration and mobility plan flexible, clear and user-friendly. The Flex Reward Tool from KPMG is an easy solution to help you on your way to implementing an appropriate flexible remuneration plan for your team.
Rewarding flexibly is the future
A one-size-fits-all approach to remuneration is outdated. According to Olivier Vanneste, Partner at KPMG Tax & Legal, flexible pay is the future:
"You can compare flexible pay to a streaming service, such as Netflix or Spotify. Such streaming services respond conveniently to the individual needs of their clients by means of personalization and an on-demand offer. We have been noticing an important trend towards greater flexibility for years. In companies that respond to this desire for flexibility, we tend to see that employees are generally more satisfied and place greater value on their remuneration package.”
Even so, many organizations still work with fixed remuneration packages, which offer little flexibility to employees. According to Pascal Borgoens, Director at KPMG Tax & Legal, there are various possibilities to introduce flexibility into an organization:
"Many companies usually start by focusing on mobility as there is a growing interest in current mobility problems. Many organizations are thinking about lower CO2 emissions, but the costs of the current car policy also usually play an important role. As examples, the amended corporation tax will lead to a sharp increase in taxes on polluting cars from 2020, while the new WLTP standards will also lead to higher CO2 emissions and therefore higher taxes."
It is therefore in companies' best interest to approach the issue of mobility as flexibly as possible by offering environmentally-friendly mobility solutions and highlighting alternative mobility options to employees – such as allowing them to exchange their company car for a smaller model or even a leased bicycle.
"A striking trend is the emergence of the 'short-term car'. As an employer, you naturally want to encourage the use of smaller or electric cars. However, employees who consider such cars may find it difficult to travel all the way to the South of France with this type of car. Within a flexible mobility plan, you can, for example, offer employees the opportunity to choose another, larger car for two or three weeks. This creates a win-win for both parties", Vanneste adds.
A second phase is then often the introduction of a 'mobility plus plan'. This is a plan that goes a step further than just flexible mobility, adding something specific, such as IT material or multimedia. In a third phase, more flexible aspects can then be added to the entire remuneration package. As of this level of choice and flexibility, we refer to the plan as a ‘cafeteria plan’ or ‘flexible remuneration plan’.
COVID-19 underlines the need for flexibility
According to Vanneste, the COVID-19 crisis has further increased the importance of flexible salaries and mobility. Employees worked from home in greater numbers than ever before during the crisis. Even after this period, it is expected that people will work remotely more often. Workers will therefore need to have more flexible mobility choices – for example, with fewer commutes to the office, an annual train subscription may no longer be necessary. This could be replaced, for example, by a mobility app. At the same time, employees may also look for alternative forms of mobility, such as cycling, in order to avoid a busy train, for example.
Vanneste also highlights that more flexible mobility also leads to greater flexibility with regard to the different choice periods in which to avail of extra-legal benefits:
"Some companies limit themselves to one specific choice period per year. During that period, employees can make their choices clear and adapt. COVID-19 has shown that this is actually already outdated. We therefore notice that more and more cafeteria and mobility plans are being made available for adaptation all year round. This, of course, greatly increases flexibility for employees.”
In addition, good infrastructure for working from home is essential. Many employees are asking for better equipment so that they can work from home in a high-quality manner. Via a cafeteria plan, employees can choose office equipment that can be used for remote working. This could be a laptop for use at home, a tablet or other related equipment, such as a printer or an additional screen. This creates a win-win situation for both employer and employee. Employees can make optimal use of better infrastructure when working from home. Employers, in turn, can ensure that employees are able to work remotely and efficiently in a budget-neutral way.
COVID-19 has also led employees to be more focused on health and well-being.
"We have noticed for some time that additional insurance options, such as optional ambulatory and dental insurance, are becoming more popular. The COVID pandemic will only reinforce this", Borgoens underlines.
Offering additional insurance is advantageous for both employee and employer. For example, the employee can enjoy the potentially interesting rates that the employer enjoys. This is often (para)fiscally more advantageous for the employee, as well as being interesting for the employer, as the total remuneration and mobility package can be made flexible without extra costs, which will in turn increase the final valuation of the total package.
Finally, Borgoens emphasizes that the 'war for talent' is still raging, despite the COVID pandemic. That is why it is obviously important to continue to offer an attractive salary package. Moreover, in these uncertain times, organizations are going to take a more detailed look at the cost of remuneration. Flexible remuneration can help to find a good balance between the cost and the valuation of a certain wage element. KPMG supports organizations in their search for a contemporary remuneration and mobility plan with the Flex Reward Tool.
Advantages of the Flex Reward Tool
A good digital platform is indispensable to making your remuneration and mobility plan flexible, clear and user-friendly. KPMG's Flex Reward Tool is a web-based solution for flexible cafeteria and mobility plans. Employees can use this online application to put together their own salary package independently. The Flex Reward Tool is fully customizable and always contains the latest updates on all relevant legislation, offering benefits for both employer and employee.
For employers, the flexibility of the Flex Reward Tool is the biggest advantage. Flexibility can be found in all modalities of the tool, which is also fully customizable. For example, complete personal branding can be integrated into the tool, making the tool extra recognizable and user-friendly for employees. The tool also includes a very extensive car module, including a Total Cost of Ownership (TCO) calculation and downgrade and upgrade module. In addition, the Flex Reward Tool places a strong emphasis on budget neutrality in the broadest sense. This means that not only are fiscal aspects taken into account, but also the impact on other costs such as workload and administration. For example, the tool automates the associated administrative processes, reducing the burden on both employees and the HR department. This is done by means of innovative and very extensive interfaces with external supplier systems, among other things.
The Flex Reward Tool also offers a great deal of flexibility for employees. The tool creates a recognizable and user-friendly environment in which all information and options are centralized. This allows employees to make well-informed choices and helps to ensure that they are committed and satisfied. In addition, the Flex Reward Tool also contains a 'Total Reward Statement'. This offers employees a complete, transparent and real-time overview of the complete salary and benefit package. The many different benefits and associated implications of the salary package are immediately clear. This gives employees a good insight into the total value of their salary package and its associated benefits.
KPMG helps organizations on their way to a contemporary remuneration and mobility plan with the KPMG Flex Reward Tool. In this way, your organization remains an attractive employer in the labor market. KPMG developed the Flex Reward Tool itself and has also implemented it among its own employees. KPMG's multidisciplinary remuneration team is comprised entirely of experts in the legal, operational, financial and communication fields. In this way, KPMG can always offer you and your organization an optimal service in all aspects of a flexible remuneration plan.
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