Discounts and Benefits for Employees = Lower Rotation at Low Cost

More than one Human Resources professional could say that the time of discounts and promotions in shops was spent as a strategy of employee benefits, but in my humble opinion, the opposite is true!

In fact, I would say that they are a great retention tool given the current scenario of economic uncertainty and low satisfaction among employees in the region, in which Human Resources receives pressure to retain New Register talent at a low cost.

Gallup statistics show that the job satisfaction index in the region reaches only 21%. Mexico is at the bottom of the table, with 12%, preceded by Argentina (16%), Peru (17%), Uruguay (22%), Chile (24%) and Colombia (26%) and Brazil (27%).

According to the 2015 Glassdoor Survey, almost four out of five employees would prefer new or more benefits to a salary increase.

Employee Discounts Encourages them to Work More Efficiently

While there are numerous factors that influence employee satisfaction, especially total compensation, the good news is that benefits such as employee discounts and exclusive promotions are much more powerful than you think.  

More women (82%) than men (72%) fall into this category, as do employees between 18 and 34 years old (89%), 35-44 (84%), 45-54 (70%) and 55- 64 (66%).

And what benefits do they value that does not represent a greater financial burden for the company?

  • Paid free time (37%)
  • Hourly flexibility (30%)
  • Lunch vouchers, casual attire (19%)
  • Exclusive employee discounts (17%)
  • Membership in gyms (16%)

I recommend that you visit the link above to view the full report, and then read the comments posted by users of these benefits. Here are two that I found extremely eloquent:

  • I think the company’s profits are much better than bonuses. Bonuses are rare, but I can use the benefits all year long.
  • The benefits for employees are very important. I would accept a job for less pay if the benefits are good. They also show that the company cares about its employee’s registration.

This is consistent with a CareerBuilder survey, where 26% of respondents said employee benefits are an effective way to improve talent retention.

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The benefits for employees communicate concern for their well-being and satisfaction. Therefore, experience shows us that employee discounts and exclusive promotions for employees are a win-win for everyone involved in the times.

Benefits for employees:

  • Intangible value in terms of exclusivity perception
  • Tangible value in the sense of savings or Tangible value as “extra income” that must not pay income tax.
  • They can extend to the family of employees and be used inside and outside the country, on business trips or vacations

Benefits for the company:  

  • They are included in the compensation of each employee
  • They have no cost to the company. The associated businesses earn for the purchases that the employees enrolled in the program make in their stores.
  • If the offer is attractive enough to influence the attraction and retention of talent, they become an important employer branding asset.

According to a study by Metlife, employees very satisfied with their benefits are three times more likely to feel satisfied with their jobs, compared to those who feel dissatisfied with the benefits of the company (79% vs. 22%).

By “professional deformation”, if there is something I always look at, it is if the collaborators are happy or satisfied with the way they are treated. Therefore, I believe that corporate benefits such as company employee discounts and exclusive promotions for employees are an effective and cheap way of saying “I care about you”.

These Are the Discounts You Can Make to Your Salary

Not all workers know what discounts can be made to the salary, some mandatory and others can be used in benefit payments.

All discounts must be informed by the employer, but not all of them require employee authorization, among them, are the legal basics App stipulated in the Substantive Labor Code.

The discounts established by law are 4 percent of the salary for health; 4 percent for pension and the percentage corresponding to the Pension Solidarity Fund, for those who earn four or more current minimum monthly wages.

In health, the employer pays the remaining 8.5 percent of a total of 12.5 percent. In pension, the employer pays 12 percent of the total 16 percent. Those who receive more than four current minimum wages (2,757,820 pesos this year) must pay an additional 1 percent for the Solidarity Fund.

If the person has a contract for the provision of services, he pays out of his pocket 12.5 percent of health and 16 percent of his pension over 40 percent of his monthly payment. On the other hand, of the agreed fees, according to the type of activity, the contractor must pay the withholding tax at the source if there is a place.

Other Payments

Those who receive 16 minimum wages or more (11’031.280) have to make an additional contribution to pensions on their base contribution income. This payment is made according to the ranges shown in the graph.

On the other hand, withholding at the source on wages is made for those who earn 3,836,817 this year, equivalent to 128.96 UVT points. The employer does not need worker authorization for that discount.

Occasionally, employees with a salary lower than the one established in the table are withheld at source. This happens because, over time, aid, premiums and other ordinary payments received by the worker are taken into account.

Labor lawyer Leonardo Mejia, from Mejia Lopez Estudio de Abogados, explains that with the authorization of the worker, credit discounts and savings values ​​in employee or cooperative funds or payments for liberty are allowed.

There are also discounts in cases of embargoes. “The minimum wage is unattachable, but the rest can be done by order of a judge. Only one-fifth of the surplus of the minimum wage can be garnished, with the exception of food and cooperative debts, which can be made even up to 50 percent, ”explained Mejia.

Likewise, discounts for fines imposed for being late are allowed, provided they are stipulated in the internal regulations, and also absences for work without excuse. These fines cannot be greater than one-fifth of the one-day salary, and the money must be allocated by the employer for awards according to article 113 of the Substantive Labor Code.

“In the case of union dues, these are set by the same union and it is the entity that must notify the employer about the discount. Discounts for insurance, voluntary contributions to pensions and prepaid medicine must be expressly authorized”, Mejia said.

Among the costs that a company must assume for its employees are social benefits, an additional benefit that the law or the company grant, such as service premium, interest on severance, extra-legal premiums and endowment.

Among the additional payments to the salary and benefits, the companies must fully assume the payment to professional risks, amount that in the contribution to the System of Occupational Risks cannot be inferior to 0,348 percent, nor superior to 8.7 percent of the Base Income of Contribution (IBC) of workers.