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Company: Migros Tic.A.S., Istanbul, Turkey
Category: ;Achievement in Compensation Design and Administration

Entry Title: The Flexible Side Benefits Project

Achievement Entry:


Migros, (Last year’s Grand Stevie Winner with 15 awards at SAGE 2017 program), continues its leadership in the retail industry in Turkey by outstanding human resources practices.

For the first time in Turkish retail industry, the company has implemented its “Flexible Side Benefits” project.

With this project, employees are able to manage their benefits and choose the ones that best fit them.

Migros had been providing the same benefits package to all employees without regarding differences such as age, personality, need, life style etc. Although a significant budget was reserved for these side benefits each year it was observed that employees didn’t always use these benefits.

By implementing the Flexible Side Benefits project, employees have the opportunity to flex these benefits and trade them with others that fits their needs better; rather than the company offering the same benefits package chosen by default to all of the employees.

This approach eliminated the company using the budget unnecessarily for benefits that would not be used so that the company could invest these funds in more needed benefits.

Business Need:

The Flexible Side Benefits Project was generated from the critical business needs Migros faces in the retail industry in Turkey.

Project Details:

The Flexible Side Benefits project is a flexible benefits management system in which employees can sell some of the benefits provided to them and purchase various benefits with this budget.

Tried in only the head quarter in 2016, the Flexible Side Benefits system was revised with positive results and applied to all white-collar employees in 2017.

An employee who gets on the Flexible Side Benefits system can see the side benefits the company offers by default and the overall budget corresponding to these. These side benefits are presented to employees in 2 categories:

  1. Fundamental (Unchangeable) Side Benefits and
  2. Flexible (Changeable) Side Benefits

Unchangeable side benefits are ones that the company provides at a minimum to all employees in the company. Changes are not allowed in the side benefits that directly impact the employee’s health and quality of life like private health insurance and individual retirement. This approach secures the health and future of employees.

The flexible benefits are benefits like the sports packet, paid leave days over the legal annual paid leave, fuel assistance, etc. Employees can change these benefits offered to them within the budget that is allowed to them and receive different benefits. As an example; an employee who never sports can purchase market gift checks instead of the sports package and turn the investment the company has made in them to a more useful benefit.

This project not only offers a choice on benefits; but also diversifies the benefits offered with newly added benefits. For example, employees can sell any flexible side benefit they wish and purchase a home market gift check, shopping check, check-up, dental care, etc. for their direct expenditures. Or they can deposit the budget earned by selling flexible default benefits into their retirement fund giving them the ability to save financially.

The Flexible Side Benefits project also provides a serious financial advantage to employees. Migros negotiated for an advantageous agreement on benefit packages with new suppliers. With these contracts, Migros (and employees) are able to use their benefits budget with a 5-20% higher value. For example; an employee flexes her sports package with replacement of shopping gift card. She earns 100TL from selling her sports club, but buys a gift card of 120 TL with this same budget. This difference comes from the contract with the provider market. Therefore there has been a 5-20% increase in the monetary value of side benefit use by employees with this process.

Achievement Summary:

-82% of employees flexed their benefits by Flexible Side Benefits system

-The financial advantage gained by employees using the flexible benefits increased 200% from the first year until the year 2018 rising from 100K to 300 K.

-A total approximate savings of 650K TL has been achieved due to the advantage on suppliers’ contracts. This saving is used for enabling employees to utilize more side benefits.

-50% of the accumulated paid leave days (which were a big burden on the company) sold in the flexible benefits system; thereby saving the company from a significant financial obligation.

-This project enabled employees to see the investment Migros made in them and the monetary value of this collectively.

-Employees’ awareness about side benefits shows a distinct increase

-This practice initiated a change in Turkey retail HR, some followers started their own flexible benefits systems benchmarking Migros.

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