In every sector and in most countries around the world, attracting and retaining talented staff has become an extremely difficult endeavor: hence the reason that it’s front-and-center of many HR managers’ thoughts right now.
It wasn’t so long ago that offering some extra salary to an employee or candidate would normally be enough, but the labor market has changed. Employees now want more from their employers, particularly in terms of how work fits in with their personal lives and well-being, and how they can get more enjoyable and rewarding experiences from their careers.
This means that human resources managers are having to diversify their employee benefits and compensation and benefits packages so that they can recruit and retain happy, motivated, and productive staff. This blog highlights the range of options available and some of the enterprises leading the way.
Benefits to offer employees
These benefit plans sit outside of normal salary, but can still have significant intrinsic value to an employee, and there are many different opportunities here. Which ones will resonate most will vary substantially from employee to employee. They can include (and aren’t necessarily limited to): private medical care or health plans, dental plans, life or disability insurance, pension and retirement plans, allowances for education and career development, parental leave, or transport allowances to help with the cost of commuting.
Benefits that help employees maintain their physical and mental health are particularly popular in the United States, and employers can also benefit from the reduced absenteeism of a healthier, happier workforce. Initiatives in this area can include gyms and fitness centers on business premises, active team-building activities, and the provision of healthy food options in the lunch room, including fresh fruit.
While financial rewards are no longer the be-all and end-all from employees’ perspectives, they still have a considerable part to play. There remains a range of incentives that employers can offer to motivate and reward their workforce, over and above their base salary. These can include bonuses (which are increasingly awarded at a group or team level rather than individually), stock options that allow long-serving employees to take a stake in the company, and profit-sharing schemes that give everyone a slice of the pie if the business is running successfully.
Work/life balance has become a much bigger priority for employees all over the world post-pandemic and in the wake of the great resignation. Many employers have responded by building more flexibility into working arrangements so that work can sit alongside personal commitments more easily. This includes flexible working hours, so employees can take their kids to school or fulfil doctor’s appointments, and the possibility for remote work on a certain number of days a week (and in many cases, all the time).
Employers are also looking at different ways to compensate employees in ways that will help their money go further. One is through Non-Qualified Deferred Compensation (NQDC) plans, where a proportion of earnings are deferred to a later date to be more tax efficient, or help employees with retirement savings.
Another is the use of an Earned Wage Access (EWA) platform, where employees accrue wages day-by-day, can view how much they’ve earned online, and then withdraw however much they need whenever they need it. The latter is especially important in the current cost of living crisis: our research has found that 60% of employees have difficulty finding money in the event of an emergency. EWA solves this problem without employees having to rely on credit and get into a debt spiral.
Which companies lead the way in employee benefits and compensation?
To help you understand the difference that a new approach to employee benefits and compensation can make, these examples demonstrate what’s possible:
Google: free food on campus, cooking classes, a gym with free classes, massage therapy, and generous death benefits (50% of salary to the partner of a deceased employee for ten years)
Hubspot: unlimited holidays, flexible work options, reimbursement for career development, extra paid leave for long service, generous parental leave, and financial assistance for egg freezing for would-be parents
Campbell Soup Company: 100% healthcare coverage, fitness centers, healthy meal options, kindergarten, daycare centers, and after-school programs for kids up to 12 years old
Starbucks: free dry cleaning, Spotify subscriptions, extensive healthcare, reimbursement for tuition, and one free pound of coffee or box of tea per week
All these perks require a certain level of investment, but the return has never been higher. Whether it’s keeping a workforce healthy, keeping them engaged, keeping them motivated, or keeping them happy, a business will always stand to benefit through greater productivity and loyalty. At a time when talent attraction and retention is a real challenge, employee benefits and compensation initiatives can be the game-changers.