Employee Benefits in 2016: Perks or Expectations?
Are employee benefits today considered perks, or are they expected? It’s a question many ask these days. Not surprisingly, the history of employee perks involves World War II, the burgeoning tech industry and women. I say not surprisingly because these same key elements like a reduced workforce, new technology and women in the workforce are still driving factors in why many businesses today are upping their game when it comes to employee perks.
But let’s back up a minute. When World War II broke out, Hewlett-Packard’s David Packard, at the request of the War Department, stayed behind to run HP’s test and measurement instrument program. HP ran 24 hours a day, and with the men away at war, Packard quickly learned that he had to trust his female employees to run the company. He also had to accommodate the working moms among them, which included flex-time for sick children, doctor’s appointments, and school runs.
Post-war, the company continued these programs, and added others such as profit-sharing, annual bonuses, stock options, Friday afternoon beer-fests, coffee, fruit and donut breaks every morning and afternoon, and eventually, even camping and picnics at their private company retreat. Fast-forward a few years, and HP was soon boasting record-breaking high levels of employee satisfaction.
Gradually other companies followed suit regarding employee perks as more women entered the workforce, as Millennials took over the business world, as jobs became more and more specialized, and as work-life balance eroded due to our digitally driven work world.
Today’s Top Employee Benefits and Perks
Language morphs and evolves, and today there are blurred lines between terms like “benefits” and “perks.” While there are certain employee benefits most organizations are legally bound to provide, such as social security benefits, unemployment insurance, and workers’ compensation insurance, today’s employee looks for much more than that.
In fact, according to employment recruiting and review site Glassdoor, “With nearly three in five (57 percent) people reporting benefits and perks being among their top considerations before accepting a job, some employers are raising the bar even higher to help attract talent.”
While health and wellness, financial considerations, and retirement benefits have remained at the top of the list for job searchers, other additions such as family issues and time off show an increased desire to try and reclaim that elusive work-life balance.
The Millennial Impact
Millennials are the largest demographic in the workforce today. They will make up 75 percent of the workforce by 2025, and they want more from work than money. They want to make an impact. Deloitte’s 2015 Millennial Survey shared insights from 7,800 Millennials from 29 different countries, and they were clear: The business world is getting it wrong. Seventy-five percent of respondents felt business could do more to help improve society. Only 28 percent felt their current company makes full use of their skills. For a generation that thrives on mentorship, inclusivity, giving back, and professional growth, those are shockingly sad numbers.
Millennials are also notoriously fickle, and more prone to job-hop than any generation before them. According to a recent Gallup report, “…21 percent of Millennials say they’ve changed jobs within the past year, which is more than three times the number of non-Millennials who report the same.” Gallup estimates Millennial turnover costs the U.S. economy $30.5 billion annually.
Millennials also show less willingness to stay in their current jobs. Half of Millennials, compared with 60 percent of non-Millennials, strongly agree they plan to be working at their company one year from now. For businesses, this suggests that half of their Millennial workforce doesn’t see a future with them.
In today’s world of work, employee benefits are expected. So, when you’re wondering how to recruit and retain this important cohort think about paid education and training, an active mentorship program, company sanctioned time-off for volunteering or charity work, and opportunities for work-life balance—things like flex-time for family appointments or school meetings, extended parental leave and opportunities for remote work.
Employee Perks: Trends in 2016 and Beyond
Some of the biggest trends in employee benefits and perks revolve around family, especially parental leave and baby bonuses. Netflix caused a ripple through the business world when they announced they were offering employees a year of maternity and paternity leave to new parents. Those same parents are also given the flexibility to return either part-time or full-time, and they can take leave as needed throughout the year. Other companies have taken note, and alongside generous parental leave policies, today you’ll find egg freezing and fertility assistance, counseling for new parents returning to the workforce, lump-sum “baby bonuses” for new parents, even breast-milk delivery services for traveling working moms on employee perks lists.
Another hot new trend is helping new hires pay down their student debt. Student debt load is spiraling out of control. The class of 2015 graduated with an average debt of $35,051, about $2,000 more than their peers in 2014. If you want to stand out from the crowd when it comes to hiring and retaining the best and brightest in your field, consider following in the footsteps of Pricewaterhouse Coopers and other organizations and start working on a student-loan relief repayment benefit as part of your corporate employee perks package.
However, you don’t have to offer pricey perks like three catered daily meals, unlimited paid time-off, on-site dry cleaning, free shuttle buses, gender-reassignment surgery or hefty yearly vacation stipends to recruit and retain the best employees. In fact, many in the start-up space, including DropBox, which drops roughly $25,000 yearly per employee for perks, are scaling back the lavish benefits the tech industry has become known to offer. If you’re a smaller organization, consider less expensive treats like a monthly manicure or massage service, a small health and wellness stipend, or varied start times to help reduce commuting stress.
Consider adopting more flexibility regarding job sharing and remote work. Or incorporate team outings or time for volunteer work into your employees’ schedules. While you don’t have to break the bank with your employee perks and benefits in 2016, you must recognize the employee benefits game has changed. Pivot and incorporate some of these benefits if you haven’t already. Because it’s likely your competition already has.
What do you think? Have employee perks and benefit packages gone too far? Do you have an employee benefits package that’s the envy of your industry?