Employers will not push back the traditional perks and benefits offered to their employees, such as meal vouchers, despite the wrenching financial crisis that has put pay packages on ice.
“I don’t think employers will freeze their benefits policies, as they are clearly defined in the employment agreement. It is very likely to see legal actions proceeded by employees, if companies would resort to this cost-cutting measures”, said Alina Popescu, manager at Reward Information Service at Hay Group Romania.
Over the past few years, an increasing number of companies started to add benefits and perks to the Romanian employees’ base salary, PayWell-Salary and Benefits 2008 survey conducted by audit and advisory firm PricewaterhouseCoopers found.
If in 2004, the fixed salary accounted for 75% of the pay packages, the variable components had a 13% share, fixed components -5% and benefits – 7%, in 2008, the fixed salary would account for merely 65% of an employee’s monthly income. The most popular benefit offered to employees has become the lunch ticket.
However, the benefits such as gym membership or private nursery rooms or daycare facilities have been increasingly used by companies to retain workers. “Not even these less usual perks will disappear from the structure of the pay package, because it represents an important cost for employers. When a companies freezes its salary policy, taking away some of these perks would lead to lower levels of motivation and retaliatory behavior”, said Popescu.
More than a quarter of companies operating in the local market have decided to freeze salaries this year, in contrast with other European states where roughly 37% companies will act similarly, a recent Hay Group research found. “Freezing salaries is a good strategy amid financial crisis, especially because companies who choose to do this provide high se
