Hybrid Model: How does the system combining flexible compensation and social benefits work?

When it comes to designing an employee compensation plan, many companies face a difficult decision.Should we opt for company-funded social benefits or allow employees to manage part of their pay through flexible remuneration? Each option has its advantages, but it is not always easy to determine which best suits the needs of the team and the objectives of the company. 

If you find yourself in this situation, on mixed model can be the ideal solution. This strategy combines the best of both worlds, allowing the company to subsidise certain essential benefits while offering employees the possibility to supplement their compensation with tax advantages. This creates a more equitable, flexible and attractive system that benefits all parties. 

Mixed Benefit Model: What is it?

The mixed model is a comprehensive compensation scheme that combines two essential elements: the social benefits in subsidy and the flexible compensation.  

It is based on a flexible approach that allows employees to tailor their compensation package according to their personal needs, while the company can strengthen its value proposition and enhance its attractiveness in the labour market by also offering extra-salary compensation.  

How does the mixed model work?

As already mentioned, the mixed model works by combining rflexible remuneration and social benefits in subsidy to optimise employee compensation. With flexible remuneration workers spend part of their gross wages on products and services (with all foreseen limits). These amounts are exempt from personal income tax., This increases the purchasing power of the employee without generating an additional cost for the company. These services can be managed by the company through platforms such as Edenred Flex.  

On the other hand, subsidised social benefits are benefits that are fully financed by the company over and above the basic salary.. These benefits can include services such as meal tickets, transport tickets, childcare and more. What differentiates it from flexible pay is that the company bears the full cost of the service, whereas flexible pay is within the basic salary and therefore the costs are borne by the employees.  

In short, with the mixed model, the company gives its employees the possibility to use part of their salary for flexible remuneration on the services of their choice. In addition, it adds an extra amount to their salary so that employees can spend it on the same or different services. 
 

Advantages of implementing a mixed model in a company

Today's professionals are not only looking for a good salary, but also for a good job. benefits package that provides them with security, flexibility and a better quality of life. In this context, the blended model is positioned as an innovative solution that brings benefits to both companies and employees. 

Advantages for the company

• Loyalty of talentBy offering supplementary remuneration that other companies do not provide, employee loyalty is fostered. 

• Improving corporate imageImplementing such plans reinforces the company's value proposition, image and reputation.  

• More (benefits) with less (costs)The company can offer a significant wage increase to its employees without having to bear the full cost, but only the social benefits part of the subsidy.  

Advantages for the employee

• Increased purchasing powerTax exemptions on products such as meals, transport, childcare and money for social benefits increase the employee's take-home pay. 

• Flexibility and customisationFlexible remuneration: Thanks to flexible remuneration, each employee can tailor benefits to his or her specific needs, choosing which services he or she wishes to invest in.  

• Better work-life balance: By having tickets such as childcare, transport or restaurant tickets, the worker can better balance their work and personal life, reducing stress and improving their quality of life (e.g. by buying a healthy meal without having to cook it). 

What solutions can be included in the Mixed model?

Some of the Edenred options that can be integrated into this model are: 

• Ticket Restaurant: A solution to facilitate access to daily meals, both for face-to-face work as for teleworking, with tax benefits. 

• Edenred MobilityA way to cover transport costs and promote sustainable mobility. 

• Edenred Nursery: A grant to cover part or all of the cost of childcare for children from 0 to 3 years of age. 

• Training: Support for professional development through courses and certifications. 

• Health insuranceMedical coverage guarantees wellbeing and peace of mind for employees. 
  

The mixed model is presented as an innovative and balanced solution for workers' compensation. Implementing this model not only strengthens the employer-employee relationship, it also contributes to a more competitive and sustainable working environment. 

Still not sure which employee benefits scheme to choose for your company?Contact with us and we will provide you with all the support you need to choose the right one for you!