Attractive Fringe Benefits Draw Top Talents to Austrian Businesses
- Organizations pay up to 2,125 EUR for fringe benefits
- Companies value own portfolios as in line with the market or better
- Company vehicles and home offices remain popular, sabbaticals less so
Vienna, July 3, 2018
It is a well-known fact that monetary incentive systems are effective, but in most cases they are finite. So what can an organization offer top talent to lure it to the company and keep it there? And what communication channels should companies be using to draw attention to their attractive benefits portfolio, both externally and internally? HR and management consultancy Kienbaum Vienna surveyed more than 100 Austrian companies on their existing and planned fringe benefits. The resulting study gives companies and businesses an insight into what today’s top talent wants and expects.
The growing significance of fringe benefits
Within their overall compensation strategy, nearly four out of five of the companies surveyed place moderate to major importance on fringe benefits, and the trend is rising. The growing desire of many employees to organize their own working time and personal workspace, combined with increasing workplace and job flexibilization of workplaces in general, means companies are more likely to consider these wishes.
“It’s not only the provision of benefits by a company in and of itself, it’s also the company’s intention that’s important. Satisfaction goes up when employees feel valued by their organization,” explains Alfred Berger, Head of Compensation and Performance Management at Kienbaum Vienna. In particular, for those individuals for whom motivation has only minimal correlation with growing income or with possessing status symbols, a higher salary has only a limited incentive effect. “An increase in salary is not a guarantee of a medium-term or long-term relationship with a valuable employee,” explains Alfred Berger.
Asked about the goals attached to developing their own program of benefits, respondents cite employee motivation, employer attractiveness, and employee retention as the most important. Expenditure for attaining these goals correlates well with hierarchy levels: for executive directors, companies spend on average 2,125 EUR a month, while the figure for upper management is 2,000 EUR. The gap then widens, with average monthly amounts of 600 to 800 EUR or middle managers.
The attractiveness of benefits portfolios is rarely quantified
Forty percent of companies surveyed considered their own benefits portfolio to be in line with the market, while a third considered it to be lower than the market. Only 22 percent considered their benefits portfolio to be above the market average. However, none of these assessments can be fully evidenced since no more than 20 percent of companies have a structured system in place for measuring their portfolios. Amongst those companies that do measure their portfolios, nine percent rely on traditional surveys and eight percent on unstructured dialog with employees, while only six percent commission external studies, and two percent look outside of the box and to their competitors. “Irrespective of the costs to the organization, the mere offer of fringe benefits does not necessarily enhance employees’ engagement with the organization. The key is to offer fringe benefits that employees consider important,” concludes Study Director Alfred Berger, adding, “Communication too offers the potential for professionalization. The majority of companies do ensure that their existing offer is communicated within the company in a targeted way, but this is typically ‘one-way’ over the company intranet or in one-on-one meetings. Even today, digital media and social media platforms that are conducive to dialog are seldom used.”
Flexible benefits are still in the minority
In more than three quarters of companies, “traditional” fringe benefits such as a company cell phone, company vehicle, and meal vouchers still have priority. Other established standards such as company pension schemes and home offices are offered by more than half of companies. More unusual fringe benefits such as company childcare or shared ownership programs are offered by around one quarter of companies but, when compared to more established standards, show lower uptake. Alfred Berger evidences this in his comment, “Flexible leave from work, an anchoring point in the majority of portfolios, is offered by half of companies but used only very rarely.”
By contrast, additional fringe benefits, such as free drinks and snacks, are used frequently to very frequently, but are a matter of course by forty-three percent of employers. According to the study, these additional fringe benefits are, therefore, on the agenda in many organizations. “Most popular are health-related services, from vaccinations to massages, followed by food and financial services. Interior design also plays an important role,” reports Alfred Berger.
Truly flexible benefits packages that can be designed by employees themselves are very uncommon. Individual bespoke packages perfectly tailored to meet individual needs are not yet on the cards in more than 90 percent of all companies surveyed.
Kerstin Wandt – T.: | E-Mail: Contact@kienbaum.de