LeasePlan’s data-driven remuneration policy

10/11/22

Listen to your employee when it comes to reward preferences

Which employment terms do staff in my organisation really care about? That was the question that often occupied Max Paping's mind when he started three years ago as director of compensation & benefits at LeasePlan. Together with Steven Hölscher, manager of people insights at PwC, Paping developed a preference survey. ‘By asking questions of employees and combining this approach with the right research methodology, we can understand what drives people and, thanks to the data, we can see where each euro we spend as an employer provides the best return.’

Max Paping en Steven Hölscher

Good opportunity for digital dialogue

‘One of my first discoveries was that we were very focused on pay, such as the base salary and bonuses’, Paping says. ‘All the other things we had properly arranged, such as pensions, as well as gym subscriptions and a more relaxed dress code, we did not highlight enough. That prompted our collaboration with PwC.’

As part of the collaboration, PwC and LeasePlan used The TrueChoice artificial intelligence-driven survey platform. This platform analyses which remuneration elements employees find most important. ‘In the survey, we work with images and try to make it as attractive as possible’, Hölscher says. ‘Ninety per cent of employees completed the survey, which is a very high score. Moreover, we are living in an era of rapid change. The issue is how to give employees stability in uncertain times. It is therefore a good opportunity for organisations to engage in a digital dialogue.’

Max Paping

Young people do care about pensions

LeasePlan's organisation can be divided into three groups of people. ‘Our digital department employs many young people’, Paping explains. ‘Our head office is a bit more internationally oriented and then we have our Dutch office where staff have generally been working longer and are on average older. Our assumption was that there would be many differences between them in their remuneration preferences, but those turned out to be negligible.’

Employees could complete the survey anonymously. Only matters like job level, age group, length of service and working location were recorded. The preference survey first asked how much importance staff attach to certain employment conditions. Employees rate the conditions with a certain score and later in the survey these wishes are compared.

Paping: ‘As a result, employees have to make a choice. For instance, employees were asked whether they would like a better pension scheme or whether they would prefer to receive a higher percentage in salary increase. We thought beforehand that younger employees would attach less value to a good pension scheme than their older colleagues. The striking thing is that the younger generation does consider it important.’

Prior to the survey, Hölscher and Paping considered which subjects they would and would not cover. ‘You cannot review every subject relating to employment conditions’, Hölscher says explaining the approach. ‘You are constantly debating which questions are relevant to the aims of the LeasePlan.

Flexibility just as important as a five per cent pay rise

Flexibility is very important to the LeasePlan staff. ‘The flexibility regarding how and where you do your work and how you arrange your working day received the same recognition as a five per cent pay rise’, Paping says. ‘So if a competitor offers extra flexibility, you as an employer must therefore offer five per cent extra salary. Such insights are valuable because they give you a good idea of how you can retain people for a longer period.

It was also evident that LeasePlan staff attach great importance to personal feedback. Hölscher: ‘It is important that staff feel appreciated. That doesn’t mean having to give your employees a gift voucher when they perform work successfully. You could consider it, but you need to be able to substantiate it properly. It is especially important to compliment your staff occasionally when they have done something well.’

Paping: ‘We take personal recognition for granted and forget how engaging positive feedback can be.’ Not every organisation is the same when it comes to remuneration policy. ‘There are common denominators, but there are also clear distinctions’, according to Hölscher. ‘The degree of flexibility or mobility arrangements may vary. A common denominator is that most employees would prefer a higher salary, especially in times of inflation. But you cannot give everyone more pay, arrange a better pension scheme and offer even more flexibility. The platform therefore ensures that you encourage your colleagues to choose one or the other. For that reason, look at what provides just as much satisfaction as, for instance, a higher salary.’

Uncertain times with many challenges

While the insights are valuable for LeasePlan, Paping is aware that employee preferences can also change. ‘Issues that were relevant in 2020 are less so now and are being overtaken by time. Working from home has become easier since the COVID-19 crisis. And at present, we as a society are having to deal with high inflation. If you cannot pay your energy bill, a free gym subscription becomes less important. We live in uncertain times with many challenges. We are also having to deal with a number of external factors, such as the proposed acquisition by ALD Automotive that we are currently engaged in. Furthermore, I hope we can do something with the pension scheme within our organisation. The entire pension legislation is likely to change in 2025; we will definitely take our employees’ wishes into account in that respect.’

Steven Hölscher