Tailored Benefit Plans Strengthen Employee Relationships

The global economy is grappling with a poly-crisis, which poses a potential threat of an economic recession that could undermine the hard-earned gains made by Mexican households in the second half of 2022. With a general lack of an economic safety net and limited financial education, it becomes imperative for companies to prioritize the maximization of benefits and compensation for their workforce that should not be focused on monetary compensation but consider the real needs of each worker. 

According to a poll conducted by Minu, seven out of 10 human resources professionals said a lack of resources is the main challenge to launching compensation and benefits programs. Additionally, the lack of strategic personnel to evaluate employees’ individual needs is the second biggest challenge.

Niell highlights that in Mexico, compensation strategies are still traditional and therefore not flexible enough since they only focus on delivering the worker a payroll, a meal voucher card and other dispersed, often unused benefits. 

“Living paycheck to paycheck with little to no financial education has consistently forced people to defer to loans with alarmingly high annual percentage rates (APR), trapping thousands into crippling debt cycles. This situation is known to have a direct detrimental effect on people's mental and physical health, which in turn undermines the productivity of companies and the country’s overall competitiveness,” Nima Pourshasb, Co-Founder and CEO, Minu, told MBN. 

Companies should continuously evaluate what the preferences of workers are for compensation plans. According to Mercer’s Evolution of Total Compensation study, the 10 most valued aspects of compensation are medical insurance, life insurance, having a doctor in the workplace, personal leave, workspace activities, savings plans, growth opportunities, a Christmas bonus and a healthy balance between personal and working life. These aspects are not limitative, so Niell recommended launching specific surveys in each company.

In terms of workers' financial health, compensation plans can be a major boon. Over 69% of Mexican workers live without savings to face unexpected problems, and around 33% of workers are forced to ask for loans to cover their day-to-day expenses. Services like on-demand salaries, of which Minu is a pioneer in Latin America, can help workers access a part of the salary they have already worked for, which may prevent the need to loan. It could also improve their mental health and empower them. “Using our anonymized data, a Harvard Business School study found that our platform helped boost employee retention by 20% annually, representing an important time and cost-saving measure for organizations. Meanwhile, companies can also leverage the platform’s automated reports to inform and develop an integrated benefits and compensation strategy,” Pourshasb said. 

Digitalization has settled new paradigms in team management. It also allows companies to stay connected with workers and listen to their actual needs to develop proper compensation plans, ensuring they use them and at the same time, make them feel more like part of the company. HR directors must start thinking outside of the box and understand that workers and their needs often vary.