The economy is doing better. This is reflected in the labour market, as demand is picking up. Even though employers usually no longer have life-long contracts on offer, they still need people with the right skills who are willing to commit to their organisation for a short or longer period of time. Flexible employment conditions are a must in order to attract these people to your company. The new ‘captivation’ happens flexibly. The Technical University of Delft (TU Delft) has understood that.
The basis of the system of flexible employment conditions, also known as the ‘choice model’ or ‘cao à la carte’, consists of exchanging one employment condition for another. Sometimes there is also talk of exchanging resources such as salary and leave hours for purposes such as pension, travel allowance, extra leave or extra income. Most collective agreements include provisions on this.
Personalize to taste
Those who work with flexible employment conditions give employees the opportunity to put together their employment conditions package partly according to their own taste. Of course in compliance with laws and regulations, think for example of the minimum wage. The advantage for the employee of swapping wage components for other remuneration benefits in a choice model is that the goals are often taxed at a lower rate or not at all.
A (higher) reimbursement for travel expenses, extra leave, life-course savings plan, company fitness or a company bicycle; an employer may offer all of these to his employees instead of gross salary. In doing so, the employer does more justice to the individual situation of self-confident employees who are looking for a clear balance between work and private life.
Present day intriguing
Flex benefits are a good way of engaging employees in the modern world. Because people are most happy with terms of employment that suit their situation. Moreover, flexible employment conditions are a system that cuts both ways. By introducing a cafeteria model or à la carte benefits, the staff can not only choose a suitable package themselves, but the costs for the employer also remain limited. The employee is prepared to relinquish one or more benefits such as a bonus or end-of-year bonus and in exchange receives, for example, an extra (untaxed) reimbursement of travel expenses or a fitness subscription and thus receives more net income.
The administration of flexbenefits is a tricky business; the Tax Authorities want it done properly and, as an employer, you don’t want to get all sorts of additions because you haven’t applied the free margin from the Work-related Costs Regulation properly, for example. The many changes in the law and new regulations have a great impact on the HR departments of organisations’, Vincent Wongsowinangoen knows. As an advisor on employment conditions and legal status at TU Delft, he is partly responsible for the correct implementation of the many legislative changes in his employer’s policy. Many recent changes – such as the Work-related Costs Regulation – are, according to the general opinion, more about government savings than about easing the burden on employers. If ever it was important to administer properly, it is now. Because it costs money if you exceed the standards set in the WKR’.
In order to make the exchange of employment conditions easy, within the possibilities of the employer and the limits of the law, automation offers a helping hand. Not only for employers, but also for employees, who can easily make, view and adjust their own choices 24/7 with employee self-service (ESS). TU Delft goes one step further; the institution also offers employees the opportunity to calculate the consequences of their choices with Pointlogic’s inspire tool. This way they are not faced with financial surprises and they know exactly what they are choosing.
Demands and needs
The TU had already been offering employees a calculator with the à la carte employment conditions in order to facilitate ESS as transparently and effectively as possible, but the maintenance contract for that system expired. We took the opportunity to build a future-proof application that meets our requirements exactly,’ says Wongsowinangoen. We did some research in the market and found Pointlogic to build this application for us. We are now working with it for the second year.
Why Pointlogic? Because they scored well on our Program of Requirements’, says Wongsowinangoen. We saw that a lot had to be set up in the system – customisation was unavoidable – and in a very tight timeframe, but the provider has lived up to our expectations. The system does what we want it to do, despite the small points for improvement that remain. That is ‘work in progress’ and we are solving those points in good cooperation with the provider in order to be able to optimise further.
Inspire creates a win-win situation for both the employees of the TU and the organisation, says Wongsowinangoen, with insight and ease for all parties. He sums up what the win-win consists of in practice: ‘The system is quick and easy to use and guides employees through the programme when filling in the choice model. Layers of checks are built in to prevent errors. This is very efficient, it saves us time and money and it increases quality,’ he says. The tool does the calculations in the way we want. Application reports are automatically added to the personnel file. Pointlogic was also able to meet our requirements for the look and feel of a new system, which not only had to be appealing, but also more user-friendly for our employees.
In addition, the benefits specialist emphasises, the system contributes to a more positive image of the employee about the employer. We at TU Delft have made an effort to set up a good system that helps employees and takes the pressure off them. This is important in this labour market. One of the goals of the HR profession is to build a positive image of the organisation so that talented people want to work here. In that respect, we believe in ESS, but the prerequisite is that the facilities meet expectations’.
No matter how good the à la carte system is, it is not easy for everyone. The HR department therefore also organises help with filling in the menu. Even in a playful manner, by driving electric Toek-Toeks around the campus during an action week. Employees can get in and get answers to their questions, or be transported to HR Services to ask questions and/or get help in using the application’, says Wongsowinangoen. The fact that we are doing something like this is generating positive feedback. We also get positive feedback on the à la carte system itself, even unsolicited. Employees are happy with the application.
The TU provides education to approximately 19,000 students and has between 4,500 and 5,000 employees. These employees all make use of the à la carte system for the exchange of employment conditions. They can choose to sell leave hours in exchange for extra income, but also for other purposes such as mobility allowance (travel expenses), union membership, extra leave, membership of the professional association, life-course savings and extra pension. They can also use their salary, holiday allowance and end-of-year bonus as sources for these purposes. The mobility allowance, which is calculated using a built-in route planner, and extra income are goals that employees like to tick in the system.
Strategy and vision
Delft University of Technology conducts top-ranking scientific education and research and strives to achieve a top position in global rankings. Knowledge valorisation is an important pillar; the TU wants to produce technological developments that contribute to sustainability and an economically flourishing society, and offer solutions for today’s and tomorrow’s society. The support functions are also committed to this vision,’ says Wongsowinangoen. HR facilitates employees in arranging their terms of employment quickly, well and easily so that they have more time for their core business: teaching and research. In our HR strategy, ‘Freedom to Excel’, it is stated that quality and innovation are two of the spearheads. inspire, baptised ‘IKAPP’ at TU Delft, is about quality and innovation and fits very well with TU Delft’s vision.
As an example, he points to the effects of ESS on the goal of ‘sustainability’. Thanks to the digitalisation of the à la carte system, we no longer have any paper applications. With 5,000 employees who submit a number of applications per person per year, that saves a lot of trees. That, in turn, contributes to sustainability.
Vincent Wongsowinangoen has some good advice for HR professionals who also want to start optimising their flexible employment conditions system. What always applies in these kinds of processes is: map out your own wishes and requirements and record them well so that you can always fall back on them during the process. And don’t be deterred in the first instance by assumed impossibilities. Sometimes much more is possible than you think and talking to the system provider can make this clear.
This article was published before here.