Why employee benefits for mobility are becoming increasingly popular

Why are employee benefits important for companies?

Employee benefits are not just a nice gesture, but a crucial tool for employee retention. At a time when competition for talent is intensifying, benefits are a decisive factor in employee recruitment and retention.

The shortage of skilled labour continues to grow. It is therefore necessary to actively recruit qualified specialists. The tide has turned for many applicants, they have several offers and can choose their employer. Modern employee benefits answer the question for applicants as to why they should work in this or that company. According to the "Job Search in Focus" study by the StepStone job platform, attractive benefits are one of the most important factors for 72% of skilled workers when deciding on an employer.

Attractive employee benefits also have another advantageous effect: they improve the workplace for existing employees. This can significantly increase motivation and productivity. Companies are very likely to recoup the costs incurred by benefits. Usually by a multiple of the costs.

For these reasons, employee benefits are important today:

  • Demographic change has fundamentally altered the labour market.
  • Employee benefits are a key tool for companies to present themselves as an attractive employer.
  • Employee benefits therefore play a decisive role in employee recruitment and retention.

What are employee benefits? Definition & examples

Employee benefits - also known as employee advantages, employee offers or corporate benefits - are voluntary perks and additional services that employers offer their employees - usually in addition to their salary - in order to increase their well-being, satisfaction and motivation. These offers can cover a wide range, from health and education benefits to mobility advantages, and usually form part of the overall employee remuneration and motivation package.

Employee benefits can vary and cover different areas of employees' lives, including health, pension, working hours, training, food, childcare and mobility.

By offering attractive corporate benefits, employers can improve the corporate culture and employee satisfaction, increase the loyalty of current employees to the company and win over future employees in the recruitment process.

Employee benefits are part of the overall remuneration package and range from financial benefits to services and leisure activities. Here are some examples of employee benefits:

  • Health benefits
  • Pension and retirement plans
  • Holiday and leisure benefits
  • Education and training benefits
  • Financial benefits
  • Family benefits
  • Workplace health promotion
  • Insurance benefits
  • Employee benefits
  • Social and team-building activities

What benefits are there for employees?

There are different types of employee benefits. They are often roughly categorised into three incentive systems: Entry Incentives, Performance Incentives and Retention Incentives. Each of these systems serves a specific purpose to attract and retain employees.
The three incentive systems

Entry incentives

These benefits come into effect for all employees at the start of their employment with the aim of attracting more applications in recruitment. Such benefits are designed to attract new employees. Examples include signing bonuses and welcome gifts.

Performance incentives

Employees receive these benefits when they achieve a predefined result with the operational goal of achieving better performance. These benefits are awarded based on the employee's individual performance. Performance bonuses and recognition programmes are examples of this.
According to a survey by Deloitte, 78% of employees surveyed stated that they are motivated by performance-related benefits such as bonuses and rewards.

Retention incentives

Employees (usually) receive these benefits the longer they work for the company with the aim of reducing staff turnover. These benefits are intended to bind employees to the company in the long term. These include share options, company pension schemes and mobility benefits.

Example: Employers who offer company bike leasing or job tickets promote the mobility of their employees and at the same time contribute to the sustainability of the company.

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Use of employee benefits

Employee benefits as a means of combating skills shortages

Example: Company bike leasing

The young generation of employees wants to work in a healthy, sustainable and flexible way. The integration of corporate benefits and mental health into the company portfolio is becoming increasingly important in order to master the balancing act between the demands of today's applicants and the prevailing shortage of skilled labour due to demographic change.

One particularly relevant aspect is individual mobility. This is also shown by the Statista study "Mobility in everyday life", according to which employees want to be as flexible, independent and fast as possible when travelling. In this context, the introduction of mobility services as a corporate benefit is a sensible step.

Among other things, company bike leasing is becoming increasingly popular and brings together all the primary demands of employees: Health, cost efficiency, flexible travel and sustainability. Interest in owning a company bike is high in Germany: almost one in two Germans find company bike leasing attractive. This is the result of a quantitative Statista study of 1,000 employed participants aged 18 to 67 on the topic of "Company bikes and sustainable mobility". The survey, conducted by company bike leasing provider Lease a Bike, took place online in Germany between 21 and 25 February 2022 and examined mobility behaviour and the use of bike leasing. Younger respondents between the ages of 18 and 29 in particular can imagine using a company bike in the future (55%). As many as 91% of users are convinced that they will continue to use their company bike, and 97% of users are (very) satisfied. Health and environmental aspects are particularly important to employees (both 66% in favour). The lack of a company bike scheme is the main obstacle to using one for 68% of respondents.

In order to overcome the challenges of recruiting and employee retention in the context of New Work, companies must keep an eye on the needs of young employees and adapt their employer branding accordingly - there is no way around the introduction of sustainable employee benefits.

Employee benefits as an incentive to return to the office

The world of work is constantly changing. The pandemic has brought hybrid working models and remote working even more into focus. Employee benefits that adapt to these changes are invaluable. Mobility benefits, such as company bike leasing or job tickets, are particularly relevant in this context.
Example: Companies that promote hybrid working models can offer mobility benefits to give their employees the flexibility they need to organise their work.

What are the most popular employee benefits?

In this list, we have compiled ten benefits that today's modern employees want:

  1. Home office and remote work
  2. Flexible working hours
  3. Company bicycles and Germany ticket
  4. Further training opportunities
  5. Life coaching
  6. Lunch vouchers
  7. Sports and leisure activities
  8. Sabbaticals
  9. Days off for voluntary work
  10. Company childcare

These modern benefits for employees will be important in 2024

In times of a tense economic situation, benefits that provide employees with optimal relief become important. This also means that a benefit should ideally appeal to and involve all employees in the company.

Benefits in the area of mobility are therefore well received by employees. Not only are the topics of the environment, climate protection and sustainability becoming more and more important to employees, but the efficient management of the journey to work affects every employee in the company. They want to be relieved of financial burdens. This is becoming even more relevant in view of the fact that many companies are looking for incentives to encourage employees to return to the office. After all, flexible working time models and the option to work remotely have not only become established, but are also highly valued by employees.

Companies that therefore want to focus on flexibility and sustainability can offer employees a mobility budget. This can be used for a means of transport of their choice, whether public transport, car sharing or e-scooters. Employees also appreciate the option of leasing a company bike. There are two options available here: a company bike via salary conversion or as a tax-free option if the company bike is provided in addition to the salary already owed.
The 49-euro ticket is well received by German companies. Many companies offer their employees the Deutschlandticket job ticket as an alternative to a company car. According to the Association of German Transport Companies (VDV), around 15 per cent of the 10 million Deutschlandabos sold to date are Jobtickets.

More than half of the large companies in Germany offer their employees the Deutschlandticket subscription as a discounted job ticket. In a survey conducted by the environmental organisation Greenpeace among the 90 companies listed in the Dax and MDax, 46 of the companies surveyed stated that they provide their employees with a Deutschlandticket Jobticket. 31 companies stated that they do not use the job ticket scheme. One company is planning to introduce the Germany Job Ticket. Twelve companies have not yet responded to Greenpeace.

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How can employers offer employee benefits?

Providing employee benefits requires careful planning and implementation. Employers should understand the needs of their employees and select the appropriate benefits. In addition, proper communication and efficient administration of these benefits is crucial. Software solutions such as mobility budget platforms or benefits platforms offer companies the opportunity to manage employee benefits efficiently and make them easily accessible to employees.

When are employee benefits tax-free?

Employee benefits sometimes also represent a tax advantage for employees. For example, companies can invest 600 euros per year and employee in employee benefits free of income tax. The easiest way to offer benefits is via benefits in kind, for example vouchers, products or services. Benefits in kind of up to 50 euros per month remain tax and social security exempt.

Examples of benefits in kind

  • Lunch vouchers or other meal vouchers
  • Vouchers and cash cards that only authorise the purchase of goods or services
  • Voucher cards for a limited network: e.g. for certain shops, retail chains or even regional city cards
  • Voucher cards for a limited range of goods: for a single product category, such as cosmetics, fashion or fuel
  • Voucher cards for a specific social purpose: e.g. for food or for company health measures, such as burnout prevention

Employers must also observe the following regulations when granting employee benefits in the form of benefits in kind to employees:

  • Benefits in kind may not be offset against wages.
  • The benefit in kind may not be given in lieu of an agreed salary increase.
  • The benefit in kind must be included in the pay slip in addition to the salary.
  • The amount of 50 euros is an exemption limit per month and not an allowance. As soon as this amount is exceeded, income tax and social security are payable on the entire benefit.
  • Employees receive the benefit in kind per month; i.e. it is not permitted to save up the amount for an annual total.
  • Unused amounts cannot be used in another month.

How do employee benefits affect salary?

Introducing employee benefits is generally more cost-effective for companies than a salary increase. Employee benefits are also usually tax and duty-free for employees. This means that employees are also satisfied with a lower salary if the right employee benefits are offered. In general, it can be said that salary satisfaction increases with the number of employee benefits offered. According to the Mercer study "Benefits & Wellbeing 2020+", more than 60% of young employees would give up part of their salary for an attractive benefits programme.

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Stefan Wendering
Stefan is a freelance author and editor at NAVIT. Previously, he worked for startups and in the mobility sphere. He is an expert in urban and sustainable mobility, employee benefits, and New Work. In addition to creating blog content, he also produces marketing materials, taglines, and website content, as well as case studies.
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