Only 1 in 5 Belgian companies fully optimises remuneration to lower wage cost
Vlerick Business School and Attentia have studied HR & well-being policies in Belgian companies
A study by Vlerick Business School and Attentia involving 130 Belgian companies has provided new insights into remuneration and well-being policies. Very few companies today are making optimum use of wage optimisation opportunities to reduce wage costs. For example, only 1 in 5 organisations are operating a structural optimisation policy and only 15% makes use of flexible remuneration, also known as the ‘cafeteria plan’. Although over 80% regard well-being as a crucial element, not everyone has implemented it in communication or actions. While anyone investing over 3% of the HR budget in actions concerning well-being, has observed positive effects in a very short term.
Via an online questionnaire, presented late 2015 to HR directors and managers of 130 different Belgian companies in various sectors, Attentia and Vlerick Business School studied the maturity of the policy regarding remuneration and well-being. This was done on 3 levels:
- the basis: are the legal obligations being observed correctly?
- the optimisation opportunities and other ways to improve the policy, for example by means of benchmarking
- the strategic level: is there a clear policy regarding remuneration and well-being in order to raise employee engagement? And is this policy fully in line with the corporate strategy?
Optimisations in remuneration policy not fully utilised
The majority of the HR managers are convinced they are observing all legal obligations and that they have sufficient knowledge of remuneration policies.
Prof Dr Koen Dewettinck, Vlerick Business School, explained: “Apparently, most organisations manage the remuneration processes in collaboration with an external partner. Some 65% of the companies partially or completely outsource these tasks. On the other hand, optimisation through internal or external benchmarking, a job classification system, automatic and efficient fiscal optimisation, and flexible remuneration plans are insufficiently made use of, even in major companies. Which is surprising, especially in Belgium, where wage costs are very high, and considering the positive effects of optimisations on corporate profitability, the competitive position, and the opportunities to improve employee remuneration.”
There are levers strategically speaking as well: although 65% has a policy on paper, few measures are taken that support the corporate strategy or that are KPI driven, or which are taken via an HR dashboard.
Investing in well-being will pay off
Among the positive results is the fact that 80% of the people surveyed consider well-being an important point of attention. Since the new act was introduced in September of 2014, there has been increased attention to psychosocial risks. Still, fifty percent of the companies have indicated their doubts as to whether they meet all legal obligations. Active health promotion primarily concerns physical well-being, rather than mental or emotional well-being. And very little attention is given to internal corporate communication or systematic follow-up of the impact of the actions. 70% does not, or not yet, measure the ROI of well-being initiatives. While two thirds of those who do are observing a positive impact. Therefore, investing in well-being does pay off - especially for those who invest over 3% of their HR budget in actions. In 15% of the companies surveyed, investments involve over 5% of the HR budget.
An integrated approach regarding HR and well-being pays off
Carine Huysveld, delegated manager of Attentia, stated: “Naturally, every executive manager wants to comply with legal obligations and wants an HR and Well-being department that is as efficient as possible. But that is only the bare minimum. Our clients who go beyond that minimum, reap the benefits: they translate their company strategy into a remuneration policy combined with a well-being policy. First, we listen to the company objectives. Then we develop a policy together with the client, including an action plan and regular KPI measurements.”
Attentia is a Belgian HR services group that provides professional assistance to businesses, the self-employed and starters for their development. Prompted by our years of expertise, we offer a wide range of HR products and services, with a focus on Reward (from personnel administration to strategic wage policy) and Well-being (from prevention & protection to corporate vitality).
Attentia has 40 offices spread throughout the country with over 750 employees. We are a financially sound company with a growing turnover of EUR 80 million. In 2013, 2014 and 2015, our strategic focus won the prestigious HR Excellence Award.