Banking giant ABN Amro is to introduce a revolutionary approach to reward under which fixed agreements on pay and benefits are replaced by a flexible system.
The system, being piloted in The Netherlands from next January, will see all 26,000 Dutch employees receiving an amount of money on top of their regular salary every month, instead of fixed agreements on benefits such as holiday pay and profit-sharing.
The amount will be equivalent to the fixed agreements, but staff will be able to spend it on whatever they need – for example, childcare, extra holiday or a mobile phone – online. The purchases will be automatically processed in ABN’s HR system and settled the same month.
Robert Charlier, head of HR at ABN Amro Netherlands, said: “Labour agreements come down to time and money. Collective agreements just don’t fit individuals any more.”
Charlier estimated that the online system will save the bank millions of euros on administration.
“It also reduces the pressure on HR, which is good,” he said. “HR will be able to focus on strategy instead of on operational tasks.”
FNV Bondgenoten, the largest trade union in The Netherlands, has welcomed the new system, despite some initial reservations.
“I don’t know of any other company where all labour agreements can be valued monetarily,” said Huug Gorter, an official at FNV. “At first we had a feeling the new system would lead to economisation, but we have been assured that won’t happen.”
If the system proves successful in The Netherlands, ABN Amro will consider implementing it in other countries, including the UK.