Meta4 Presents 10 Keys to Saving Costs in Human Resources Policies

• Implementing compensation plans, adopting measures for more flexibility or analyzing the social security allowances and rebates are some of the most effective measures for ensuring cost savings in organizations today.
• This decalogue was extracted from the conclusions made in the last “HR in Process” seminar organized by Meta4 in 2010, and to continue in 2011, with the purpose of sharing HR management experiences, best practices and recommendations with clients and HR professionals.

Madrid, 19 January 2011.- Meta4, a world-class leader in managing and developing human and intellectual capital management (HICM) systems has compiled a list of the top ten keys for streamlining costs in organizations today. These recommendations have been extracted from the conclusions made in the last “HR in Process” seminar organized and led by Meta4. This was focused on sharing with clients and HR professionals, Meta4’s experience in rolling out solutions in this area together with best practices which allow companies to cut costs and optimize their balance sheets without having to take drastic steps.
In the current downturn, Meta4 has listed 10 recommendations to encourage business savings that support HR staff when designing their strategies:

1. Implementing flexible compensation plans The implementation by the company of a flexible compensation plan leads to fiscal advantages and tax savings for the company and users. Besides, these plans boost corporate image and attractiveness for capturing and retaining talent.

2. Adopting flexible measures Such as reducing the working day, restructuring departmental functions, streamlining departments, outsourcing processes that are purely administrative like payroll or personnel administration, transferring and/or mobilizing employees to concentrate on the most critical areas of the business, etc…

3. Social security allowances It is common for companies not to apply all the allowances they are entitled to, and there are many circumstances in which they can benefit from them. It is vital to be aware of the legislative updates in this context.

4. Applying exemptions To reduce salary costs, companies must analyze their payroll and review their payroll items to find exemptions (complete or partial). Specific labour conventions may also have exemptions which companies must be aware of and apply.

5. Social security contributions Several years ago, the Spanish social security system paid contributions per 30 days monthly for employees and per calendar day for day labourers. Currently, it allows rebates on contributions per calendar day for both day labourers and monthly employees. Although some companies continue to work with the old system, it is wise to review how these social security contributions are calculated.

6. Analyzing compliance with data protection laws With the purpose of avoiding possible sanctions, depending on the degree of severity, this could lead to fines ranging from 600€ to 600,000€ in Spain for example.

7. Reviewing the collective labour agreements Reviewing the clauses in collective labour agreements on rebates and applying them, helps companies save costs. Certain clauses, particularly those on reducing employee payments, usually go unnoticed and are not applied. These clauses, usually included in these labour agreements to reduce the rate of absenteeism, can be applied to achieve the purpose for which they were created.

8. Processing deductions with accrual periods greater than one month The Spanish social security system requires companies to prorate the deductions of payroll items with an accrual period greater than a month, across the months in which the item is due. This is particularly complicated in the cases where the amount to charge is unknown upfront. The items with an accrual period greater than one month must be reviewed, and analyze how these deductions are being made and make sure this is right. If not, then the right modifications must be rolled out for the correct deductions, particularly as the Spanish social security has been showing special concern over these kinds of payroll items over the last few months. There are more and more inspections that lead to heavy sanctions for companies that do not comply or only comply partially with this liability.

9. Comparing the prorated extra pay against the extra pay check earned Salaries in some countries may not be earned as 12 monthly payments, but instead in 14 payments for instance, like in Spain, where employees are paid an extra pay check in the summer and at year end.
   In these cases, this analysis indicates if more or less is earned via prorating. A correctly adjusted proration reduces social security costs.

10. Using technology The costs of distributing confidential information (pay slips, certificates and others) on paper can be prohibitive. Implementing technology tools that make it cheaper to disseminate information while ensuring confidentiality lead to a significant saving, for example, the Employee Self-Service portal is a solution that helps companies covert into more dynamic, flexible and innovative organizations, allowing them to systematize and streamline administrative processes and improve communications between employees and managers.

“The crisis is forcing companies to make tough decisions which at times affect their organizational structure and imply instability and insecurity for employees. Before taking drastic measures, there are many initiatives that managers and human resources staff can launch to improve the profitability of the company,” said Eva Louzao, Director of Services at Meta4.