Opinion Piece – The fact that wages are set to rise significantly next year may seem like good news for employees. Yet the gap between salary and job satisfaction appears to be widening. Is there, alongside the wage gap, also a “happiness gap”? And what can be done about it? The Federal Planning Bureau forecasts a substantial increase in wages. According to its calculations, by the end of 2024, an impressive 26% rise over four years will have been achieved.
Never Before So Much Absenteeism and Turnover
Most employers have also made significant efforts in recent years to make their compensation packages as attractive as possible. Yet absenteeism continues to rise, and I see insufficient improvement in employee engagement. Companies need a new approach to thrive and remain successful.
Many companies approach their compensation policies purely from a financial perspective. Reward structures are designed to minimize taxes and social contributions, both for employers and employees. The question is whether these tax-friendly benefits actually have a positive impact on employee engagement. Is there a correlation between offering tax-free rewards, such as vouchers, seniority bonuses, or profit-sharing, and the intended outcome? Perhaps we need to critically examine the so-called “tax-friendly solutions” provided by the government.
60 Percent of Vouchers Never Used
Over the past decades, an abundance of “vouchers” has been created. The most well-known are meal vouchers, initially introduced for employees without a company canteen, but they have evolved into a way to provide extra pay in a tax-efficient manner. The same applies to other vouchers: sport and culture vouchers, consumption vouchers, gift vouchers, and eco vouchers. A C&B director in the food sector (1,000 employees) calculated that only 40% of employees actually redeemed their vouchers. That means 60% of the value simply went up in smoke.
Hundreds of millions of euros disappear this way every year. The only winners are the voucher issuers. It is therefore questionable whether this truly contributes to employee appreciation and motivation.
Pay Not Linked to Work
What about collective rewards provided by the government, such as the CAO90 wage bonus? Or the tax-friendly profit-sharing bonus that can only be given at a group level? How motivating is it for employees when they see that not everyone works equally hard but still receives the same reward? Moreover, using such collective systems through collective labor agreements (CLAs) seems to leave little room for individual rewards, especially with automatic indexation. The only alternative appears to be an individual bonus, but this is strongly discouraged as less than half remains after taxes. Today, legislation provides no tax-advantageous structure for rewarding individual performance.
Legislation also allows tax-free seniority bonuses after 25 years of service. However, it is questionable whether this actually promotes retention and engagement, especially if no other milestones were ever celebrated. Why should loyalty be rewarded purely for tax purposes? The link between performance and seniority is not necessarily proportional.
Innovative Rewarding is Punished Administratively
More and more companies are choosing to integrate points-based systems so they can immediately reward positive behavior and retain employees for the long term. Employees can earn points and redeem them for gifts. Gallup research shows that this form of reward positively contributes to engagement and results. Unfortunately, uncertainty and fear of extra administrative complexity discourage many companies from implementing this approach. Belgian legislation is lagging behind for innovative reward methods and the tools to simplify their administrative processing.
Make Rewarding an Experience
In a time when salary increases are no longer feasible for many companies, we need to focus on how employees experience rewards. We cannot continue to rely on limited tax-friendly options without seriously evaluating their impact on engagement. Companies struggle to attract and retain talent despite “tax-free” reward schemes. Absenteeism continues to rise despite all initiatives taken by companies. We are undeniably in a context of wage cost management and optimization, but that is only half the story. Appreciation is not about giving more financial rewards—it’s about how we make people feel.
In other words, we must move from finance-driven to experience-driven solutions for rewarding performance.
Individual Rewards
Our government only provides tax-friendly solutions to reward employees collectively. Even underperforming employees receive the same rewards as those who go the extra mile. Would it not be fairer to allocate an amount per employee, fully exempt from social security and taxes, that can be used to reward them personally? This would be in addition to collective reward options. In this way, the employer can take initiatives to personally motivate, appreciate, and support employees—even in difficult times. The advantage is that this tax-exempt allowance per person can be used for a more effective appreciation strategy, focused on engagement and experience.
Only in this way can companies create a sustainable impact on social, financial, relational, and mental well-being.
