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More flexible Payroll flexibility and its impact on productivity

Increasingly, employees have the “payroll flexibility”, a formula that combines the traditional with the money wage supplements paid in kind. A system that benefits all. Cars, laptops, insurance, pension plans … Many workers already receive these products as part of their salary. The rest, of course, perceived in hard cash.

This system, from the United States, is called “flexible payroll.” Until recently this “payroll flexibility” was a practice almost exclusively to large companies and multinationals. Over time, the combination of monetary compensation and payment in kind (non-monetary remuneration) begins to spread to businesses of all sectors and all sizes.

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The pace of introduction, however, is still slow in the case of small and medium-sized organizations. This is mainly due to the fact that SMEs lack an adequate human resource department to manage the system as small businesses, unlike large ones, are unable to recruit or retain top talent.

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But is a system applicable to all types of workers? The flexible remuneration was until recently the preserve of the managerial class, but now many middle and base employees enjoying this possibility. This is a salary formula that benefits both the company and the worker. In fact, companies often use it to motivate employees, to avoid leaking the best talent or to steal them to competition.

This “payment in kind” is not particularly burdensome for businesses, as they can get a very advantageous price for the products and services that then offer their employees. The great advantage is to them is that they always increase their net salary. First, get products or benefits that will actually need for your personal or household consumption at prices more favorable than the market. And second, has a tax advantage, or is free to declare in his income tax if they are within limits set by law.

The payment in kind has a tax advantage, or is exempt from income tax if statement is within legal limits. Another feature to be truly effective this system is that it is not an imposition of the company, but is the worker who decides if he wants to receive a portion of their wages in kind and what type of products or services will be used.

It may also periodically change the composition of their pay according to their personal needs at every moment. For example, during one year the employee may opt for health insurance, but the next can opt for the installation of ADSL, or a computer for your child. This condition is defended by Delgado and Groves, authors of “Pay me what I want!”.

According to these experts, “flexible remuneration is a compensation formula that is primarily pursued the employee that you can decide each year how to perceive: in cash or in kind, through certain goods or services previously defined, and of course, within the legal limits established for that purpose. “

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