Housing subsidies seen as ultimate weapon in luring labor
With the Hungarian economy struggling with labor shortages, employers can increasingly be expected to offer housing subsidies in order to attract and keep talent.
Due to overall labor shortage in the country, Hungarian employers are forced to dangle more and more incentives before workers. Housing subsidies have been a popular item on the bonus list for a while now, since in this way companies can contribute up to 30% of total costs, or a maximum of HUF 5 million in a period of five years, to their employeesʼ home-related investments such as house purchase, enlargement, modernization or renovation.
According to a recent survey by Cafeteria TREND Magazine and Szent István University that polled 342 employers, such subsidies are currently provided by only 44% of the respondents in 2015, while another 5% of them were planning to apply the measure this year. As cafeteria expert László Fata told the Budapest Business Journal, it is mainly large corporations that have integrated the tool into their human resources policies with a view to projecting a positive image of their brand on the labor market.
“Firms like housing subsidies because it is a tax-free method, as opposed to making payments into home savings schemes. Such subsidies can also help workers repay their home loans,” Fata pointed out. The incentive can be combined with workers’ own home savings plans, of course, and together that can mean the opportunity of buying an apartment in a matter of a few years.
According to Fata, home subsidies should gain in popularity and firms are expected to make them available in large numbers. What often puts them – and employees – off is the amount of paperwork connected with the procedure. “The volume of documentation may look discouraging at first, but the scheme works and there are also third-party service providers getting the paperwork done if necessary,” Fata said.
Upcoming changes in relevant legislation should also facilitate hiring workers from remote places, as employers will have a tax-free amount they can pay for migrant workers’ rent. But the expert does not think home subsidies will lose out as a consequence. “Providing financial means to buy a home can be a huge plus as it solves a basic problem. It not only creates value for workers, but making a purchase also means making a long-term commitment. Once they [employees] have bought a place, the chances of them staying in the long run are a lot better,” Fata said.
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