Employees today increasingly look beyond money and job satisfaction – they look for additional benefits, too. A generous employee benefits package is an essential component in attracting and retaining the industry’s top talent. Glassdoor’s Employment Confidence Survey in 2015 found that about 60% of people consider benefits and perks a significant part of deciding whether to accept the job, while 80% of the employees would prefer to get additional benefits from their employers rather than a pay raise. While multi-billion-dollar organisations like Google and Twitter offer the most attractive perks including yoga classes, massages, etc., not all can afford them. For such companies, the good news is that not all benefits are expensive. The benefits that make employees happiest come at relatively low cost to the employers, like flexible hours, more paid vacation time, and work-from-home options.
The digital revolution has made everything evolve vastly from the situation just a decade or two ago. So it comes as no surprise that employee expectations and benefits have also evolved and are markedly different in today’s digital age than they were before. For instance, working-from-home was practically not an option, and neither were flexible work hours, with no secure means of communication to manage either. Other aspects are different now too – like the fact that medical expenses and college tuition costs are hitting the roof, making related benefits attractive to employees. With the increasing significance benefits have, even over a higher salary, it is becoming essential for employers to understand employees and their issues and give them attractive benefits and retain a skilled workforce.
History of Benefits
Employee benefits first came into the picture in 1636, when the first pension law was enacted in Plymouth (part of what is now Massachusetts).
- This was followed by the first profit-sharing plan proposed in the US Marine Hospital Service more than a century later, in 1797.
- The 1800s saw notable developments like the first private pension plan, the first group insurance policy and the first wage payment law.
- The 1900s saw many new benefits plans, where employers became more proactive in giving their employees incentive to work with them. This, combined with separate government initiatives including health and retirement programs and other incentives, resulted in a new era of employee benefits.
- Notable developments in the 1900s include the introduction of workers’ compensation and the minimum wage law. Other benefits in the earlier days include employee stock purchase plans, paid leaves, severance pay and services like canteen, transport, accommodation, healthcare, etc.
While some of these benefits continue in today’s digital age, some are now obsolete and do not offer the same value. Employee benefits are essentially meant to attract and retain employees, and employers will need to keep up with the times and offer employees the benefits they desire if they wish to retain talent.
Importance of Attractive Benefits
source: Patriot Software
Multiple studies and surveys have indicated that a majority of salaried employees prefer better benefits and perks over a pay raise:
- A 2016 survey by Aflac found that having a benefits package is extremely or very important to their employer loyalty for 60% of employees. According to the same survey, 36% of employees say improving their benefits package is one thing their employers can do to keep them in their jobs.
- Another survey by MetLife in 2017 indicated that 72% of employees said that the ability to customize benefits increases their loyalty – meaning that employees prefer to choose benefits to match their lifestyles.
Of course, this leads to lower attrition, amongst many other business advantages – such as better productivity, and better attendance. Finances, family commitments, and health issues are the major reasons for absenteeism, and these can be taken care of via benefits like flexible work hours and health benefit plans.
Benefits Desirable in Today’s Age
While some benefits of earlier times are no longer popular, some are given a great deal of importance. These benefits include:
With medical costs skyrocketing globally, health insurance and medical benefits are becoming increasingly important to many. These are one of the most expensive benefits to provide, but they remain the most desired for employees.
The youth of today are increasingly aware of their future and wish to start their retirement plan as soon as possible, understanding that it is important to ensure survival when they can’t earn anymore. So attractive retirement plans are quite important as benefits go.
Increased vacation time and more paid leaves per year are certainly desirable to employees, with breaks a necessity rather than a benefit due to increased stress at the workplace. Of course, a lot of executives end up leaving vacation days unused. In such cases, employees can either carry forward their leave days into the next year or opt to cash-in on their leaves, depending on the company policy.
The above benefits have been around for a while, and are still important to employees. However, with the changing times, many new benefits have been introduced, the most desirable among them including:
Flexible Work Arrangements
Flexible work arrangements have only become feasible due to recent tech advances. With meetings possible through video conferences and clients just a call away, it’s become possible to only turn up for work when needed and spend unproductive work time doing something productive at home. Similarly, working from home is also possible in some professions, and these are the benefits many employees look for and even prefer over a higher salary package.
With increasing importance accorded to stress relief and relaxation, workplaces have become more interesting and colourful, with places for fun and games, and even full-fledged gyms. As part of stress relieving initiates at workplaces, many employees desire yoga or fitness sessions, or well-equipped gyms at the office.
Student Loan Assistance
Education costs are now hitting the roof, and most students try to meet these costs by taking loans. While a high salary would definitely help to pay off these loans, freshers prefer loan or tuition assistance over a higher paying job. Providing such benefits might be costly, but companies can use it to their advantage and avail tax benefits on tuition fee provided to employees. Services like School FeEs from EarlySalary are tuned to meet exactly these needs.
Investment is an significant factor in building one’s savings, and the youth of today is realising this fact faster than previous generations. However, a large number of people remain financially unaware and have no clear ideas as to where to invest or what kind of investment would bring them the best returns. In this situation, a benefits package which includes financial advice, investment assistance and help in financial management is highly desirable.
In today’s fast-paced digital age, employers making work easy for them is accorded a higher priority rather than a higher salary, although good pay certainly remains desirable. Work-life-balance, as well as the reduction of some of its related stress through financial benefits plans, are coveted perks in the markets. Further, employees also like to be cared for, and attractive benefits packages show that the employers care. Employee benefits are, therefore, very important to attract and retain a skilled workforce.