The 2015 Welfare Report has recently been presented in Milan by OD&M Consulting, a Gi Group society specialized in HR and flexible benefits. In order to realize this report, two web surveys - one addressed to enterprises and the other one to employees - have been proposed. Between March and April 2015, more than 300 employees and 112 employers have been involved in order to map welfare’s progress in Italy as well as to understand companies’ objectives and verify the results in those that have already implemented particular measures. Also, interrogating employees has helped to comprehend the extent to which beneficiaries were satisfied.
Occupational welfare is spreading in Italy
More than 50% of Italian enterprises declared to have a welfare plan and, among these, half of them decided to introduce such measures between 2014 and 2015. If it is indeed true that interest for welfare measures has risen both among private enterprises and the public sphere, the problem that needs to be faced today is the lack of welfare measures diffused among micro, small and medium enterprises which constitute the center of our country’s productivity. Small enterprises lack appropriate financial resources as well as administrative and organizational skills to explore and successfully implement welfare plans. In fact, statistics show that the two principal variables that determine whether welfare plans can correctly develop are the enterprise size and the composition of its workforce. Only 21% of small enterprises declare to have a welfare plan in action. The share of medium and large enterprises offering welfare benefits reach, respectively, 60% and 69.2%.
Interestingly, more than 30% of small enterprises and more than 40% of the medium ones have announced that they want, in the next two years, to introduce some welfare measures. At the same time, within the 47% of small enterprises which have no welfare plans and which do not envisage to establish any of such measures, only 23% are truly disinterested. In fact, 69,2% fear managerial complexities and 38% are afraid of the costs.
Interestingly, 82% of the enterprises that took part in the survey ended up instituting some welfare measures. What are companies’ final objectives? It appears that the predominant reasons behind such a move are improving enterprise’s performance through providing a new form of incentive to the workforce (58%) and the commitment to “take care” of employees (49%). Reputation, both external and internal (depending on whether it is targeted towards consumers and public opinion or to their own workforce), is another important factor that determines the establishment of welfare measures. Finally, 34,5% of firms indicate cost containment as a priority. Nonetheless, 49,6% of the employees that have been interviewed believe that welfare measures are firstly introduced precisely for cost cutting reasons. Even if workers’ suspicion can at first be surprising, the exploitation of financial incentives allowing companies to reduce costs through the provision of benefits instead of cash should not be underestimated: 76% of CEOs who have, at some point, introduced some welfare measures are aware of it.
How should a welfare plan be put into practice?
What are the prerequisites for introducing an appropriate welfare plan? First of all, it is important to understand what the underlying logic is and to establish, from the very beginning, effective communication tools to convey information to employees. Are welfare plans instituted to to attract new talents or to retain key actors? Or maybe is it just to obtain more engagement from the staff?
Secondly, it is important to choose benefits and services. These can include healthcare, nursery schools and summer camps, but welfare plans can also provide school fees’ refund and scholarships. According to the report, food services (e.g. cafeteria), time management (e.g. working time flexibility) and healthcare contributions are the services that enterprises provide the most. The more utilized ones are however those that are related to education and services that allow access to health insurance funds and pension funds. Some services such as healthcare and food concessions are more ‘cross-cutting’ since they are addressed to everybody. Other services are dedicated to specific categories such as families with children or women. Still, they prove to be fundamental for those who receive them.
78,2% of the enterprises reserve an ad hoc financing to welfare measures while 10% exploit cost containments from incentives. 21,8% look for co-funding opportunities coming from public projects and calls for selection. It is fundamental that welfare plans are tailored upon the specific needs of the workforce, its necessities and the available resources and already existing structures on the territory: 65% of the enterprises construct their welfare plan on the basis of tax regulations’ opportunities while 81% take into account social-demographic analyses and recipients’ needs from surveys or focus groups.
According to Miriam Quarti, Senior Consultant of OD&M, firms employ two different approaches. The ‘strategic’ one foresees the introduction of welfare measures to improve the performance of the enterprise and at the same time bulid up a “brand reputation” though effective communication and local engagement. The “tactic” one aims at containing costs and it is focused on savings’ strategies offered by tax regulations.
It is also important to understand how the service will be offered and, considering the advantages that tax regulations can offer, which category of people will enjoy such a service. Services can be voluntarily proposed or there could be a refund for the employee, depending on his expenses. 41.8% of the enterprises provide the same services to the entire workforce while 47% differentiate them. Among this 47%, 68,8% use job levels as a criterion and only 28.1% customize services in each branch depending on the needs of the local area in which it operates. 45% of the enterprises have declared to provide a personalized flexible benefit plan to employees while 54% still offer equal services to everybody
It appears that firms’ satisfaction tends to rise significantly when - before implementing any type of welfare plan - a serious analysis of employees’ requests is carried out. At the same time, employees are more satisfied when welfare plans permit high flexibility regarding the choice of benefits.
Employee benefits are spreading in Italian enterprises. Compared to 2014, an increasing number of firms are participating to projects aimed at developing welfare schemes. These are becoming more customized and consequently more complex to manage. Contemporarily, decentralized bargaining is also expanding among enterprises from 29% in 2014 to 38% in 2015. Time managing, work-life balancing services and healthcare benefits are likely to be the most developed areas in the years to come. Internal communication is also becoming increasingly important, since it fundamental for reaching companies’ strategic objectives.