It's fair to say that employee benefits have come a long way since the Industrial Revolution; indeed, they have evolved significantly since the turn of the century.
But is the offer of a pension plan, paid maternity leave, and health and life insurance still enough to bring in new talent and retain them? Or should you be investing in better perks to keep employee your staff creative, happy and motivated for longer?
Although a significant investment for any organisation, excellent employee benefits can – and will – save your company money in the long term, primarily through reducing turnover and helping to increase productivity. In fact, a more in-depth look into the attitudes of the current and future workforces – millennials and Gen Z – reveals that many of these new perks, primarily offered by forward-thinking companies such as software startups, are a fundamental requisite.
Therefore, the signs are that, if you want to attract and keep the kinds of employees that will drive success, then implementing such benefits is the way to go about it.
Perks in the Workplace
Although they are a core element of many contemporary HR strategies, office perks are nothing new. Non-wage employee benefits were particularly prominent during World War II as a response to restricted salaries; hence, a variety of benefits, such as healthcare sponsorships, were created to attract new talent and keep staff. Nearly a century later, however, the role of perks has changed significantly, especially as companies seek to mitigate the rising costs of hiring and training new employees to replace lost labour.
Primarily, this is because Generation X and baby boomers are gradually either exiting the labour market or sitting at the top of it, with millennials making up approximately 35% of the global workforce and Generation Z some 25%. These numbers are only set to grow year by year, and so it is futile for organisations to think they can ignore new trends, or still maintain employee satisfaction and loyalty through traditional methods.
For instance, whereas previous generations valued medical insurance and pension plans, new generations take these benefits as standard. Instead, they seek opportunities for positional and salary-based advancement, flexible hours, mentoring and coaching, and implemented programmes that assist them in their personal and professional development. On top of that, they are also swayed (although less so) by various other perks such as discounts, social responsibility opportunities, and regular company outings.
Sounds like a lot to offer, right? Well, given the returns on these investments, not necessarily. Here are some of the ways in which modern companies are securing the best talent.
What Should You Offer?
In an era where, as a society, we are placing more value on our self-development and maintenance, progressive organisations are following suit. They are viewing their employees holistically, considering the "whole person" – their health, their future, their development, and their personal wellbeing and happiness – in and out of the office. Why? Because happy, stress-free, and content employees are always going to perform better in their role, thus improving the performance of your organisation.
As an example of how this can work, consider a common stress trigger among younger generations: finance. Research in the US shows that 62% of millennials are stressed about their finances, and feel unprepared financially for economic downturns. As a result, modern-thinking organisations are now offering financial wellness and literacy programmes to help their staff manage their short-term finances and save for future goals. Additionally, programmes that support student loan repayment – another common financial concern for millennials – are being offered by companies such as PwC, a traditionally large hirer of graduate employees.
Health and wellness benefits now go beyond a basic medical plan, too, especially as awareness around the importance of mental health increases. In addition to medical insurance, many organisations offer paid gym memberships (or invest in on-site fitness facilities), as well as provide access to mental health support, stress management programmes, and healthy snacks or meals (offered free or with a discount).
They are not stopping there, either. Other modern staff perks include:
- Four-day workweeks
- Paid paternity leave
- Paid 'fur-ternity' leave (to care for ill pets)
- Office napping facilities
- Paid and encouraged travel (such as to conferences)
- Paid extended bereavement leave
- Personal care (such as haircuts and massages) on-site
- Free or subsidised housing
- College tuition reimbursement
- On-site childcare
- Assistance in adoption and support for reproductive egg freezing
Although some of these benefits are far more costly than others, they all represent a willingness by employers to ensure that their people are supported, valued and motivated to give everything for the cause.
What Are the Benefits of Offering Perks?
Which brings us to the most important point: what all of this means in terms of productivity and performance for your organisation.
As discussed, workplace perks generally lead to higher employee job satisfaction, which, in turn, is proven to decrease turnover rates significantly. If your organisation's attitude is one of feeling that "nobody is indispensable", then both potential and existing hires will feel that you are only concerned about your bottom line, costing you invaluable talent that will simply look elsewhere.
It is also a question of practicality. If you are spending most of your valuable time hiring and training new employees every few months, productivity will suffer, morale will disintegrate, and your company will struggle to grow in a healthy way. If you are willing to invest more in your existing staff, however, you can then cultivate a healthier culture, with both you and your employees able to commit more time and energy into growing your business.
There is also a connection between job satisfaction and absenteeism. Less satisfied staff tend to be physically absent more often from work, while absent-minded employees also increase the risk of accidents in the workplace (particularly in safety-sensitive environments). This could result in unforeseen high reimbursement costs for a company, which could have been easily avoided.
A key tenet of good benefits is that employee satisfaction often results in customer satisfaction, too. Employees that are happy with their work environment and the benefits they receive are not only more productive and loyal, but also sustain a happier customer base.
I have always believed that the way you treat your employees is the way they will treat your customers, and that people flourish when they are praised.
A concerted effort to provide valuable and helpful benefits means two things: firstly, that you will attract a better level of candidate and, secondly, that these candidates will want to stay at your company. This, in turn, means that your organisation will perform better, grow faster, and be more successful. Conversely, if you are spending most of your time and money training new employees, your company objectives will be significantly affected and delayed. Therefore, it's in your interest to understand the benefit of benefits – and to provide them to the people that will make or break your company's success.
What do you think? Are too many companies paying lip service to perks, or should firms be going even further? Let us know your thoughts – either as a business owner or an employee – in the comment section below.