Recruiting and holding on to quality employees is becoming increasingly difficult for employers and competition between companies is constantly on the rise. In order to succeed in this pursuit, employers become more and more crafty and offer their employees a number of material stimuli to tip the scales in the company’s favor. Employees, on their part, are paying more and more attention not only to the gross salary they are being offered, but also to financial and social bonuses which would improve their quality of life.

Financial stimuli for an employee’s personal achievements or for the company’s results

Financial stimuli in the form of various bonuses are well-known to most employers and often take the shape of additional salary on top of their base salary. On the one hand, employees can receive a bonus based on their individual results and achievements which motivate the workers to give it their all in the workplace. On the other hand, more and more companies offer bonuses related to a scheme developed in advance and to the company’s particular financial results which stimulates not only the personal-, but also team-based accomplishments and facilitates the optimization of expenses and the company’s work processes.

Stock or shares options for employees. Some companies go the extra mile to impact the employees with the organization’s creed by offering them the opportunity to buy stocks or shares in the company at preferential conditions or below market price. Turning the employee into the ‘owner’ who directly shares in the company’s viewpoint and successes helps nurture a sense of belonging and motivates workers to contribute as much as possible to the company’s development and growth.

One-off bonuses. In order to strengthen their bond with the employees, employers will provide financial stimuli for specific occasions not directly related to the work process. Besides Christmas bonuses, many companies will offer one-off salary bonus for different momentous occasions in the employee’s life – birthday bonuses, birth of child bonuses or marriage bonuses. That way the employer can share in joy of the occasion or happiness of the workers and creates a sense of belonging to the company family.

Social supplements

Stress, time pressure, life ‘in the fast lane’ and burnouts or the ‘fear of missing out’ (FOMO) are phenomena who appear more often in recent years. Striking a balance between work and personal life is of paramount importance to highly qualified employees and many of them view social supplements as one of the ways to improve their quality of life since such supplements save time, effort, cognitive energy, and – oftentimes – one’s nerves. Therefore many of the employees will pay special attention particularly to social supplements when choosing who to work for, and the availability of a particular bonus or lack thereof can be crucial for the employee’s decision.

Most employers, especially in areas such as IT, engineering etc. take bonus plans such as food vendor vouchers, drink and snacks at the workplace, physical activities subscriptions or additional healthcare coverage as essentially the bare minimum to offer to their employees. Besides the incredibly popular physical activity subscriptions, some companies also offer subscriptions for pre-paid cosmetics services, dry cleaning, dancing classes and various other activities. Due to the fierce competition on the labour market, employees offer a number of additional supplements:

Provision of accommodation for employees (in close proximity to the workplace), especially when workers are recruited from out of town and the new position requires them to move cities. This saves the worker not only money, but a lot of time and effort otherwise necessary for finding a new home.

Kindergarten and schools for the employees’ children – oftentimes employers will fully or partially cover the admission fees provided that the employees enroll their children in a private facility, particularly when that facility is located close to the workplace. This relieves a substantial financial and logistics burden off the employee’s shoulders while simultaneously showing that the employer is socially engaged and looks after the most important aspect of their workers’ lives.

Legal advice – on the one hand, employees are in need of qualified legal assistance for their personal matters as much as the next guy, but they do not have the necessary experience and time to choose a suitable attorney. Employees will often take a leave and take time off work to utilize legal services and attend the necessary consultation. On the other hand, companies are usually in need of constant legal advice which usually takes the form of monthly subscription. The employer can add a certain number of billable hours to that subscription allocated to consultations for their employees who will therefore enjoy access to quality legal services tested by the employer themselves saving time and effort. Of course it needs to be noted that the attorney will be unable to consult the employee in cases where the employer might end up being the respondent.

Financial and social stimuli are a great tool to motivate the employees. Their proper implementation and management facilitates the improvement of the employer’s activities through optimization of expenses, avoidance of potential non-acceptance of the expenses and fines by the tax authorities as well as potential conflicts with one’s employees.

Each instrument boasts specific tax and legal aspects which the company must carefully consider. The company requires security in treating the various bonuses from an accountant-tax standpoint, all the while utilizing the appropriate strategy in implementing the bonus, which would allow the employer to alter and cancel existing bonuses if necessary.

The team of Obretenovi Law Firm can consult you regarding know-how in the implementation and taxation of various bonuses and supplements you can use to motivate your employees and provide them with a better quality of life.