By Alexis Alcalá, Director Wealth Mercer Mexico
One of the questions I frequently receive from organization leaders is how they can improve retention in a certain sector or how to strengthen the attraction of talent that has interesting challenges, such as millennials either centennials, which are usually focused on issues of social responsibility, transparency, opportunities and, above all, flexibility, and how to accentuate the culture of diversity and inclusion. Although the answer may not be so obvious, one of the ways that have given excellent results strongly challenges the status quo of the organizational culture. We need to evolve the offer of benefits and benefits taking into account the new vision of the employee, their individuality and requirementswithout losing sight of the cost and return on investment that the company seeks to establish in its value proposition.
Employee perception
Company HR and compensation managers often ask themselves:What new benefits can I offer my collaborators?? The traditional solution used to respond very well to the need and was at the same time wondering: what is the market doing? While surveys have shown trends across industries and regions, it’s always been in hindsight, perhaps looking at the last year of business, where we see for cash compensation little movement over the last 10 years. In the case of benefits, a before and after is perceived with the situation of the health crisis and what people were looking for or valued when analyzing an organization’s offer. The needs changed or escalated to a level of demand from the collaborator never seen before, where we are faced with the situation in which a person can reject or leave a position in a few months, if they get a job where the benefits are better aligned to what who values more.
Today, the answer is much simpler: “!Let’s ask employees what they need or even what they crave!” Although many organizational cultures refuse to open Pandora’s box, where asking for the opinion of their teams could generate expectations, experience has shown us otherwise, and we can even understand what benefits or efforts generate more engagement. When we want to improve the work environment, find areas of opportunity or increase the value proposition for the people of our corporation in an inclusive objective, the most accurate path would be, without a doubt, open communication and understand what excites them, beyond what market surveys sayand that this fulfills the desire or expectation of continuously improving their quality of life and supports them in achieving the goals they pursue.
When we dare to listen to our teams, very valuable information will be generated and this can be analyzed by different cutoffs such as age, seniority, gender, results by different entities or regions of the corporate group, up to groups or levels of interest.
Evolution of compensation
Through a proven model, we can obtain very valuable data, which helps us understand which of the current benefits are the most and least valued by a certain interest group and which, from the perspective of the collaborator, the ones that have been the focus attention or investment by companies, and we can classify our value proposition into four groups: first, the benefits that we can call “Banner”: those that the worker values the most, but that according to how he perceives it , the company does an excellent job in administration and monitoring. These must be a fundamental part of the offer when we want to attract or retain our talent. As an example we can mention the GMM plan in which the participants are grateful for the benefit knowing that they are protected in case of any eventuality in the health of a beneficiary or staff that could affect the economic stability of the family.
Other benefits that we label as “Communication”: those that are not valued by the employee, however, there is a very well-established strategy by the firm for these schemes, since there is a fundamental and real reason to improve the quality of life of the people, but we may not have the answer, understanding, or input, so it may just require some effort to better communicate or clarify the intent of these benefits. For example, we can have the case of financial vehicles such as the Savings Bank or the Pension Plansince they are very valuable tools for saving in the short, medium and long term, although people, having different economic situations, do not take advantage of them, losing investment opportunities and preparation for such an important stage as retirement.
Benefits with “Areas of Opportunity”: Important for people, but the company may not be making adequate efforts. We can state the programs of wellnessin which physical and emotional stability have become an essential part for employees, but after the complex proposal that started in the NOM and the challenges that were generated with so much information, it requires a deep analysis of the strategy.
Finally, the benefits that may be under a status of “Feasibility Analysis”: considering a perspective in which they are not important to the collaborator and there is no clear strategy on the part of the firm. In this case, it is necessary to review whether the efforts are maintained or the possibility of eliminating and reinvesting or promoting benefits that do cover a real need and investing in efforts to adequately communicate them is analyzed.
A vision for the near future
Derived from the reforms that we have experienced in recent years and regulations that have generated intense activity from corporations to adapt to changes and comply with new requirements, a primary issue for their finance team is how to optimize expenses and , from the perspective of human capital, how to provide the greatest value with each peso that is delivered to people. Taking into account all the changes generated by the reform of outsourcing/insourcingpensions, vacations, and those that are in process: 30-day bonus by law, compliance of 5% of employees aged 60 and over (under review by the Senate since March 14, 2023), seniority bonus considering the payment of 15 days (instead of 12) and payment for voluntary resignation with at least 13 years (instead of 15 years), and reduction of working hours from 48 to 40 hours (it was pending in the Chamber of Deputies until the next ordinary session of sessions in September 2023), it is very important to review that all the advantages of how the benefits package is designed and whether there are tax advantages are being taken advantage of.
A possible solution is to carry out analysis in which different scenarios are found, through iterations in changes to confirm that the different tax advantages are being taken advantage of and how they affect the flow of the company, wage taxes, deductions, to find the optimal proposal.
Considering the above, I would like to invite you to reflect on some of the ideas that have emerged seeking to present a proposal for an inclusive culture, which incorporate, without limitation, the training of leaders focused on the eradication of discrimination; For example, that the benefits package is not only focused on additional coveragebut that it is extensive to more family members and that they focus on needs that impact people, for example, language schools, daycare centers, student scholarships, a gym, laboratories, medical consultations, webinars, medical, veterinary, financial or nutritional assistance.
The foregoing has been successfully addressed with deep benefits flexibility programs which add listening to the collaborator, in addition to a financial strategy and administration of the benefits to be offered. In that same sense, as organizations we must bring inclusive benefits and volunteer activities that support and are aimed at vulnerable demographic groups such as older adults, with disabilities and single parents. In addition to other examples such as having support programs for before, during and after pregnancy and days pet-friendly. Always keeping in mind, active listening to our collaborators.
Editor’s Note: This text belongs to our Opinion section and reflects only the author’s vision, not necessarily the High Level point of view.
MORE NEWS:
mercer Leading consultant in Human Capital, Investments, as well as in the Health and Benefits market, with headquarters in 43 countries and operations in 130 nations.