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News

Employee Benefits: Costs or Motivation?

5.03.2017
Company: Amcham

Meal vouchers, sick days, 5 weeks paid annual leave, multisport cards – these are some of the benefits offered by employers in the Czech Republic. But do benefits play an important role when employees choose an employer these days? Or do they make a difference when it comes to retention, engagement or motivation? If so, why do we see such frequent job-hopping or number of people choosing to move to the public sector? What can companies do to retain talent in the workplace? On February 28, more than 70 AmCham members gathered to discuss these topics with experts from ČSOB, Radisson Blu Alcron Hotel, Amazon EU and SAP Services at Radisson Blu Alcron Hotel Prague.

For the most part, employees are rational and realistic about their needs. They hope to add value and receive fair treatment from employers. The downside to our rapidly-expanding Czech economy is that the demand for talent is at an all-time high. Our low unemployment rate- combined with a decreasing number of people in the workforce- contributes to talent-scarcity and we see structural employment issues nowadays. The largest Czech employers, in facing these challenges, must work harder to stand out in order to attract prospective candidates. Therefore, employer differentiation must be audience-specific. Employers must ask themselves: “What is my target group of candidates and what should I offer to them”?
 
“Even the world’s best fitness center will not motivate a person who does not like to exercise”, claimed Michal Chour, GM of Radisson Blu Alcron Hotel. “Benefits need to be more targeted.”
 
Targeted incentives are the first thing employers can do to offer real value to their staff but the quality of benefits offered is also imperative.

“At Radisson, the hotel canteen is free for our employees and we keep working on the selection of meals, improving the quality of food. In past, we provided our people with filtered coffee. Recently we thought, why don´t we offer them the capsule coffee we give to our guests? And employees liked it,” continued Mr. Chour.
 
Attracting new talent
 
In June 2014, Amazon opened its Shared Service Centre in the Czech Republic and was flooded with CVs from candidates responding to job vacancies. After some time, however, this influx of candidates began to decline and Amazon saw a 30% downturn in applicants, partly due to their benefits package. “We could not motivate people to join for what we offered when other companies were offering more benefits. It was not easy for us to adjust to this, because these sorts of benefits common on the Czech market are very unusual in America. After a few months, however, people could see something had to change, because our operational goals could not be met. The company now successfully implemented more benefits that were the most sought after and still trying to get more in to increase the attractiveness on the market,” said Vendula Daniels, HR Services Manager CEE of Amazon EU.

In contrast, ČSOB experienced a very different set of problems in response to their comparatively lavish benefits program. They had almost everything in the market available. What came to be appreciated was cheaper mortgages and other product benefits and the option to trade a percentage of the bonus for more free days (based on management’s discretion) which will be tested this year. Additionally, flexibility in both work hours as well as work location turned out to be crucial to employees. A healthy work-life balance means that work is simply done when it´s needed, not on regular basis.

“To those who cannot take home office, a flexible way of working can be  the main benefit. That´s why it´s hugely appreciated by our “sandwich generation” with small kids and older parents. I appreciate the flexibility in managing my time. I can work Sunday evening and be able to use Friday afternoon for the family needs”, added Jolana Kalábová, HR Business Partner of ČSOB.

Not all the companies are really in favor of home offices for different reasons, such as lagging collaboration within teams or personal discipline. “Personal discipline and accountability is crucial when it comes to home offices and flexible ways of working,” mentioned Michal Chour.

Home offices are not the only tool that can be used to increase the flexibility and therefore the attractivity of an employer. Part-time and shared jobs are the way how to engage mothers coming back from parental leave or students looking for some extra money to earn. Exceptions exist but in general Czech companies have a lot to do improve in this area.

Another highly appreciated benefit is relocation packages, as an increasing number of employees are relocating from outside of the Czech Republic. One of Prague’s service centers employs 35% foreign workers. At Amazon, it’s a surprising 45%. Even with the vast EU recruitment pool, many companies struggle to operate because they cannot find enough workers with region-specific skills, such as Middle Eastern language knowledge. As such, Amazon has plans to employ an immigration agent, to assist incoming employees with details such as accommodation, opening bank accounts and setting up the necessary meetings with local authorities.

Other factors influence employee perception of job-place gratification besides a satisfactory salary. The quality of one's work environment and opportunity for professional development are also critical to today’s workforce. Youngsters/millenials also appreciate volunteering programs offered as a part of benefit packages. While some companies offer their employees few days to do some pro bono work, SAP Services goes even further. “We offer so called social sabbaticals. Top talents can go to organized missions- that could last between three to six weeks- to help people in need,” mentioned Andrea Hepnerová, Managing Director of SAP Services.

What else motivates employees to jump ship?

“Since the crisis, business has become harder and harder, and some of the people who have been with us for a long time are deciding that they do not want the pressure, and leaving us for the public sector. About 25% of the people who have left our company left for the public sector,” claimed Ms. Kalábová.
 
AmCham Prague’s workforce report concerning the development of the ratio of private to public sector employees and the comparative wage levels confirms this conclusion. Many feel the need to seek alternate circumstances due to increasing pressure from ever-growing work demands. Employees in pursuit of a new position within the company are usually given the opportunity to do so annually. The company’s internal system tracks those employees who want to rotate to another position.
 
Contesting the lingering perception of the Western world
 
Many American companies still view the Czech Republic as “Eastern Europe”; in other words, an economically depressed locale where workers have few rights and low salaries. This inaccurate impression often makes it difficult for local subsidiaries to validate to the need for stronger benefits packages to headquarters. The message gets through only when headquarters are proved that HR is unable recruit adequate staffing to meet operational requirements. One solution that could ensure strategy fits available or attainable human resources could be to strengthen the voice of Human Resources within local branches.

Andrea Hepnerová commented: “On a global level, our chief human resources officer has joined the board. Likewise, in the local management, my closest peer at work is the HR Director. Human Resources  play a  vital role in driving the transformation work forward.”

This article was prepared based on the discussion during Employee Benefits event held on 28 February with following speakers:

Panelists:

  • Michal Chour, Radisson Blu Alcron Hotel, General Manager
  • Andrea Hepnerová, SAP Services, Managing Director
  • Vendula Daniels, Amazon, HR Services Manager CEE
  • Jolana Kalábová, ČSOB, HR Business Partner

Moderator:

  • Ladislav Kučera, Managing Director of Hays Czech Republic

During upcoming months, AmCham´s HR Committee will address the issues related to the Employment market such as motivation, engagement, employer branding etc. Check our calendar to be informed on time.

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