FLEXIBLE BENEFITS PACKAGES: OPTIONS AND RECOMMENDATIONS FOR AN INTERNATIONAL AIRLINE

Sandrine Bardot – CompensationInsider.com

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This assignment was given to me as a case study during the recruitment process for an international airline company from the GCC a few years ago.

The content has been sanitized to delete any reference to the specific employer. New name is “Fly Right”.

Agenda

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A – The approachDiversity at Fly RightThe current package structureObjectives of flexible benefitsChallenges in implementationProposed approachB – Some initial ideasDeciding on levels of flexibilityCustomisation within the current packageTravel-relatedWell-being and securing incomeFinancialEducation and career growthHome and family

A – The approach4

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Today and tomorrow – diversity is the key word

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5 Geographic diversity :

54 country destinations at the moment, 86 destinations Around 60 outstations from Australia to Belarus, Canada to Sudan

Cultural diversity : Around 6,000 employees, over 100 nationalities. A young workforce 3 main lines of business : airline, cargo and holidays Very different jobs : flight crew, cabin crew, ground, corporate

Aggressive growth plans : The Middle East is among the strongest airline growth regions (IATA) Fly Right operates 79 aircraft and has over 100 on order

This results in increased labour competition, with employees being sourced globally, and risking being poached by regional competition

Current package structure (as per the recruiter)

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Basic salary Housing allowance or company-provided

accommodation (depending on the grade) General or transportation allowance Settling-in allowance

Assumption : Fly Right also provides the 2 other main package components that are prevalent in the industry : Some form of profit-sharing plan Discounted / free travel

Objectives of flexible benefits

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Facilitate attraction of candidates in a tight labour market

Improve employee retention Meet needs of the employees Recognise and celebrate employee diversity Emphasize package value to maximise

employee appreciation (understanding of total rewards)

Maintain competitiveness of compensation packages

Be recognised as an employer of choice Maintain control over costs

Challenges in implementation

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Disparate populations (jobs, salaries, locations) Technical and compliance Administration of plans (link to payroll system) Process management (choosing and changing

at specific dates, estimate take-up rate of specific benefits, reach out to outstations and away-from-home employees...)

Leavers and outstanding balances Lifecycle changes (marriage / divorce, child

birth, death of dependant, long-term sickness, promotion...)

Continued PR to maintain participation

Proposed approach

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Step 1 : feasibility study and decision Collate and analyse employee views (focus

group, questionnaire, manager interviews...), get feedback from other key stakeholders

Integration with rewards philosophy : How protective do we want to be towards employees What proportion of the package should be flexible How hierarchical our rewards are What is our desired market positioning

(competitiveness) How open do we want to be about rewards Do we want core + options, opt-up/opt-down

approach... Understand specific implementation challenges

and scope out deployment plans (Pilot ? Progressively or at once ?...)

Quantify the financial business case

Proposed approach – cont’d

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Step 2 : implement Find an administrator and HRIS provider Roll-out comprehensive communication and

engagement plan, targeted at all eligible employee levels and with many different media

Step 3 : monitor and adapt

B – Some initial ideas11

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Deciding on levels of flexibility

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Introduce flexibility within management of current package

Set-up new benefits with some degree of choice within

Set-up a fixed allowance for employees to choose which benefits to elect

Set-up additional, voluntary benefits with or without salary sacrifice

Mix and match approaches for best-fit to company culture and desired outcomes

Customisation within the current package

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Housing : Could give the choice of upfront cash,

company-rent (rent within a budget and any buy-up is deducted from payroll) or company accommodation, with support from the in-house property management department

Profit-sharing : Could be proposed full cash immediate, or

with some form of company-matching if retained for a minimum period

Travel-related

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Propose interlined discounted travel Free currency and buy-back Executive Lounge access Airport retail discounts Holiday discounts (car hire, hotels, dining,

tours, cruises...) Personal / business travel insurance Earn buddy passes (eg : Southwest up to 4

per quarter depending on number of hours worked)

Wellbeing and securing income

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Dental / vision care Health screening Wellness programme Increase in life insurance cover Dependants life insurance Different levels of medical cover / long-

term disability insurance / ADD Long-term saving plan (eg Emirates : 5%

basic / 12% employer) or addition to End Of Service contributions for pension purposes

Financial

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Introduce a share scheme Give-as-you-earn charitable

contributions and carbon-footprint offsetting

Financial planning education (budgeting / personal finance, debt management, retirement planning, investment advice...)

Education and career growth

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Tuition reimbursement Personal development programs Days of shadowing “Lunch and learn”, online training, after-

hours workshops...

Home and family

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Maternity leave (paid or unpaid) Childcare vouchers Administrative support for nanny visa etc Retail or leisure activities discounts / vouchers Gym membership Flexible working hours and telecommuting Buy or sell annual leave Paid-leave bank On-site and concierge services : dry-clean,

on-site restaurant / ATM etc Employee Assistance Programme

Free resources from my blog

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http://compensationinsider.com/the-shelf-life-of-compensation-plans/

http://compensationinsider.com/7-steps-to-compensation-programme-design-the-basics/

http://compensationinsider.com/are-you-benchmarking-or-copying

http://compensationinsider.com/reader-question-what-drives-employee-discretionary-effort/

http://compensationinsider.com/relocations-do-you-offer-cash-or-services/

Thank you !

Sandrine BardotConsultant,

trainer, speaker, blogger

+971 566 172 864Sandrine@Compensationinsider.co

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