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It's sculpturally official - angels DO use mobile phones - should your employees be any exception?

TGC have sent the following Legal Alert

Dear Quoracy.com subscribers,

In recent weeks two business breakfasts were held about additional employee benefits and latest trends in non-cash motivation. Both meetings were met with enormous interest from our clients and key issues were the subject of heated debate. The meetings were led by TGC Group experts in HR management, labour law and taxes. We have set out below a summary of the main topics of discussion. In case of you are interest in these subjects, we will organise the next meetings in our new, much larger conference centre at ul. Hrubieszowska 2.

Revival on the labour market

The Polish economy has not been affected too much by the global economic crisis. During the second half of 2010 companies recruited more staff than a year ago, and from the beginning of 2011 the amount of job vacancies in recruitment portals have gradually increased. According to various research, half of Polish employees plan to change jobs in 2011. Mostly these will be the best qualified and mobile people: mid-level professionals and managers.

During the economic slowdown people looking for new jobs are motivated by the fear of job loss due to economic problems of their current employer. However, during the market recovery employees are determined to improve their situation by achieving a higher salary or position. There is also higher pressure for salary raises or increase of non-cash benefits, as in 2008/2009 a large number of employers reduced benefits and cut labour costs.

The most popular non-cash benefits

The ranking of the most popular non-cash benefits in Poland has not changed for many years:

1. Mobile phone
2. Private medical care
3. Laptop
4. Free sport and recreation (swimming pool, gym, etc.)
5. Subsidy of training costs
6. Additional insurance
7. Company car
8. Additional pension plan

In the opinion of employees the most attractive benefits are currently various forms of subsidising training and professional development. More and more employers see training not as a cost but as a long-term investment in company development.

After the amendment of the Labour Code provisions on developing professional qualifications of employees, which entered into force on 16 July 2010, it is in the interest of employers to regulate in writing any situation where professional training of an employee is supported. This way in future there can be no doubt as to whether there is implied consent of the employer to incur costs and to provide time off for training. Also, the employee’s obligation to reimburse the costs of education in case of termination of employment should be regulated in writing.

Tailor-made motivation systems

The essence of the motivation is to find such resources and solutions to properly hit the individual needs and expectations of employees. The starting point for the conscious use of incentive mechanisms is to identify those needs.

The main motivational factors are salary, working conditions, professional development and personal success. The strength of individual factors varies with the level of education, type of work and employee’s position in the company. The lower the level of education, the less complicated the job in the company will be, and the stronger the factor remuneration will be.

However, in case of well educated employees performing more responsible jobs key factors in motivating are non-cash incentives such as acquiring new knowledge, the possibility of personal self-fulfilment, career development, broadening the scope of autonomy and responsibility, and the prestige of the position.

Employee preferences also change with age and seniority. For young workers beginning their careers the most important factors are the opportunity to perform interesting tasks, the use of modern tools of work, good relations within the company and regular feedback on work results. But for workers with several years of experience important factors are attractive salary and benefits, career opportunities, independence and stability of employment.

Whom and how to motivate during economic crisis?

The first reaction of employers to the global economic crisis was control of labour costs, which are a significant part of total operational costs. Today, companies structure remuneration systems in such a way that they are part of the risk management system, allowing for flexible changes in salary and non-cash benefits in accordance with the needs of employees and the financial situation of the company. That is the role of various types of performance-related bonuses, but it is not the only role.

When revenues fall due to economic slowdown, management boards and HR departments face a difficult challenge: how to dispose of fewer incentives to avoid loss of key employees during difficult times. The most commonly used solutions include i.e.:

• Retention bonus for key staff

• Performance pay for best results

Employers can also use a wide range of possibilities to motivate staff without additional cost, but only with greater involvement of managers. Such solutions may include e.g. greater differentiation of duties, flexible working time, mentoring or simply more frequent and more detailed feedback provision.

The future of non-cash benefits

During the period of recovery the pressure on salary increases begins to force employers to seek other methods – than simple pay raises – of attracting and retaining employees. Especially young employees of Generation Y appreciate the ability to fulfil their passion and work-life balance. In the nearest future good salaries will not be enough to attract young professionals and managers.

More and more employers are coming to understand that they must take care of their staff not only just as employees, but also as people. Global companies are starting to carry out HR policies promoting balance of work and private life as well as personal development.

Contact

Should you require additional information or advice on these matters, please contact our experts:

Dorota Strzelec

Consultant/ Occupational Psychologist

HR Management Department

T: +48 22 295 33 28
E: dstrzelec

Marcin Eckert

Legal Adviser

Director of Tax Department

T: +48 22 295 33 80
E: meckert

Agnieszka Janowska

Legal Adviser

Director of the Labour Law Department

T: +48 22 295 33 30

E: ajanowska

TGC Corporate Lawyers

ul. Hrubieszowska 2

01-209 Warsaw, Poland

T: +48 22 295 33 00

F: +48 22 295 33 01

E: tgc

W: http://www.tgc.eu

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