In today’s candidate-driven market, employee benefits and perks can be the difference between attracting and retaining top-performing talent and losing them to the competition. So you’re probably concerned with whether your company’s offering is attractive enough.
57% of senior leaders today are assigning higher priority to care benefits to better support their employees. This change was brought forth by the pandemic. Employees realize that benefits and perks improve their quality of life by supporting their health, work-life balance, and long-term professional development.
The good news for hiring companies is that 40% of employees say their employer isn’t currently offering employee benefits that help. If you play your benefits and perks cards right, you can gain the lead in employee appeal, and use this edge to build a strong, thriving workforce.
But which employee perks and benefits matter most to your current and potential employees? Let's find out.
Employee benefits are indirect forms of compensation that employers must contractually honor
in addition to a worker’s annual salary or wages. Health insurance, dental and vision insurance, and retirement and pension plans are a few popular examples of employee benefits.
Benefits can also be an incentive in making new hires. For example, if you offer more paid time off than the legal minimum, you can call it a benefit.
Employee perks (short for ‘perquisites’) are the non-wage offerings that go beyond salary and employee benefits. Gym membership reimbursement, wellness activities, and free food are common examples of employee perks.
A common distinction between benefits and perks is that perks are part of the employee’s remuneration. If an employer fails to honor a benefit, they are in breach of contract. Perks are part of company culture and are given at the company’s discretion.
The rule is simple: The higher your investment and better your benefits and perks, the bigger the return on employee retention, productivity, and morale. In fact, 78% of employees reported they're more likely to stay with an employer because of their benefits program.
Employees need benefits and want perks. But both can be considered investments an employer makes in them. Prospective hires, therefore, use benefits and perks to determine whether an organization will appreciate their efforts in the longer run.
Here are five reasons why offering employee benefits and perks are effective at retaining high-quality employees:
With the unemployment rate being at an all-time low, job vacancies are abundant, and top-tier candidates are scarce.
This has created a highly competitive landscape, with companies doing anything and everything they can to attract, engage and retain top-performing employees — employees that studies claim are up to eight times more productive.
Offering a benefits package attracts top talent for two reasons:
So, if you want to attract and retain top-notch workers, make sure you’re offering top-notch benefits and perks.
Your employee benefits package holds a much deeper meaning for employees because it shows them your willingness to support them and their goals.
For example, if you offer paid sick leave, you encourage employees to stay at home when they feel ill. Not only will this give the sick person enough time to recuperate, but it will also prevent them from infecting their co-workers. When they come back, they’ll feel refreshed and ready to go, which is much better than having them struggle at the job and feel resentment towards the management.
By offering health insurance and other wellness benefits, you’ll have a healthier workforce that will lead to a healthy, high-performance business.
As Richard Branson famously said, “Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.“
So, offering a good employee benefits package can help you land healthy, talented workers that are likely to stay around for the long term. The natural result of this situation? Higher productivity.
Think about it: You’ve successfully hired top-performing employees who know how to get things done. You’ve taken the measures to ensure they're healthy, giving them the physical ability to be present at work each day. You’ve also kept the employees long enough to develop a good workflow and processes.
And that’s just the physical impact — your employees are also doing better mentally. Employees who don’t have to worry about healthcare expenses, save for retirement, or worry about taking care of their children, are in a better headspace to focus on their work.
Even studies confirm that happy employees are 20% more productive.
A Harvard Business Review article states employees only care about three things:
Post-pandemic, mental health has become a top priority. Be sure to provide your workforce with a better work-life balance, flexibility, and mental health assistance. Support your employees' journey towards achieving these three desires by giving them the right benefits and perks.
For instance, offering Toastmasters memberships or holding company-sponsored sports events can make them feel part of a community. Paying for specialized training offers them the opportunity to achieve more in their careers, enabling employees to have a more significant impact on the company’s mission.
Company benefits and perks aren’t the sole influencing factor in your employees’ happiness and engagement. However, these offerings can be a strategic move to fulfill their personal requirements and boost morale.
In the past, HR managers chose employee benefits and perks without too much strategic thought. Instead of creating a customized plan according to employee requirements and preferences, they took the “everyone is offering this, so we’ll offer this too“ approach.
Naturally, they didn't get the desired results.
A strategic approach to perks and benefits gives your company a competitive edge. One way to do this is by offering perks that strengthen the company's unique purpose or core values.
When you choose benefits and perks that reinforce company values like shared learning or empathy, you reinforce the company’s core rules into the employees’ everyday lives, resulting in a more pronounced culture.
Airbnb, for example, has an excellent tactic to reinforce its unique culture. It offers employees $2,000 a year for travel allowance — provided they stay with an Airbnb host while traveling. As this puts the employee in an Airbnb customer’s shoes, they develop greater empathy and understanding of the company’s target audience and their needs.
Not a bad tradeoff, right?
Employee benefits and perks run the gamut from nearly necessary to arguably over-the-top. It’s up to you to decide what will draw in and keep your target talent for the long run.
Fractl conducted a study of 2,000 people, asking participants to weigh in on various benefits when deciding between jobs. While better health, dental, and vision insurance were the top benefits employees desired (88%), other perks like student loan assistance and paid parental leaves were also a priority.
Here are some of the best employee benefits and perks to make your employees feel appreciated and motivated:
Not having healthcare in the United States can be a nightmare considering one has to shell out thousands of dollars just to ride in an ambulance. Employees are likely to choose (and stay with) companies offering solid health and wellness benefits plans to ease the financial burden.
Close to 90% of U.S. employees in large and medium-sized businesses receive healthcare benefits. Here’s how you can support your employee's well-being:
Health insurance is the premium you’ll pay to the insurance provider for your employee’s medical expenses. If you offer a health insurance plan, it will likely cover:
Health insurance plans vary from company to company. Some pay the full premium on the employee's behalf; some only contribute to the cost along with a deductible that comes out of the employee's paycheck before taxes.
If you want your employees to feel even more comfortable at work, consider offering them mental healthcare benefits. This can include therapy, mentorship, and coaching.
83% of employers believe their company’s wellness program helped improve staff members’ health. The same study found that 84% of employees saw a positive impact on productivity and performance after implementing mental health clinical services and preventive care programs.
Offering free lunch is a great way to motivate employees and increase productivity.
As lunchtime approaches, employees start to lose focus, thinking about the logistics of getting lunch. What route should they take to avoid traffic? Will their favorite restaurant have a long line?
Offering them a free, well-balanced meal at the office will take away these worries. Plus, they'll have more energy to continue working efficiently. As a bonus to business, food-centered social gatherings, such as eating lunch together, help foster a sense of camaraderie and encourage collaboration.
Offer daily wellness options to employees to keep them focused and energized throughout the day. This can include offering free snacks, tea, coffee, and water. If you want to get more creative, create a running club or nap room and offer ergonomic office furniture that shows employees you care about their health.
Weekly massages and yoga classes during work hours are great ways to help employees feel comfortable, happy, and creative throughout the workday.
Today, 49% of Americans worry about not having enough retirement savings, and 34% of employees spend at least some of their work time managing personal finances. COVID-19 and the subsequent layoffs and pay cuts have depleted the savings of several workers, creating financial stress and insecurities.
And let’s not forget the mental and potentially physical toll financial stress can have on employees and, by extension, their productivity. Keeping this in mind, here are some financial wellness benefits that are highly appealing to employees:
An SHRM study concluded retirement is the most important financial wellness benefit to employees.
The main reason why employer-sponsored retirement plans work is that it’s easier for employees to save for the future. Not only does it fill financial knowledge gaps, but it also offers employees a means to improve their financial wellness.
If you want to take things a step further and gain a competitive edge, offer retirement plans with contribution matching (401(k)). Employees recognize the value of contribution matching towards the total compensation package and are, therefore, more motivated to stay with the company.
Consider offering employees a stake in your company or annual profits to attract top-level talent.
Company equity gives employees a sense of ownership. They also have a financial incentive in seeing the business succeed, making them more invested in the company’s growth, development, and profitability.
Giving your employees paid time off in the form of vacation time, sick leave, personal days, and paid parental leave is a valuable offering to improve their work-life balance, quality of life, and mental health. You can also give employees a chance to earn more time off based on the number of hours they work or years they’ve been at the company — a great incentive to stay.
According to SHRM research, having access to emergency funds is the third most important benefit among currently unemployed Americans. This makes sense considering that 38% of workers have less than $1,000 in savings to deal with emergencies.
Traditionally, companies offer short-term loans or payroll advances to workers. But you can also consider giving employees an emergency savings account funded through payroll deductions.
An emergency savings account is just like any other savings account and can be connected to a debit card that is available for the employee to use. Funds are deducted from employees' paychecks, and they can access these funds during emergencies without penalties.
Employee discounts and rewards can help offset living expenses and reward employees for their hard work. It also encourages employees to engage with the company's product or service, increasing their understanding of the customer experience and service level.
Offer your own products and services at a discount, or partner with other businesses for exclusive offers. You can also give performance bonuses to reward hard-working employees.
Both the employee and employer have a vested interest in seeing talented workers advance up the career ladder.
From an employer's perspective, employees with procedure experience, specialized knowledge, and newly developed skills are ideally equipped to contribute to the company's success. For employees, working for an employer who is ready to invest in their professional development ensures career growth.
To enjoy this win-win situation, offer the following to support your employees’ future career growth and education:
It makes sense for employees to be with a company where they can grow. If they don’t see a bright future at your company, they‘ll leave as soon as a better opportunity comes knocking at their door.
Sit down with employees and create their future growth plans to engage and motivate them. This will give them hope for a solid future career at your company.
Offering tuition reimbursement is a valuable benefit to entice top-quality candidates — and for good reason. The average federal student loan debt is $36,510 per borrower, while private student debt averages $54,921 per borrower.
Now, that’s some serious money!
Offering some form of tuition assistance can help offset employees‘ education expenses, along with giving them the chance to acquire more skills and tools to become better at their jobs.
Alternatively, you can set up a student loan repayment option to support your employees‘ financial and mental health. For instance, you can help them figure out monthly loan payments based on family size and income, which will help them pay off their debts while considering other financial responsibilities and needs.
Many employees lack financial literacy—not because they don’t want it, but because they don’t have the education necessary to understand how much income they’ll need for the future and plan accordingly.
Set up employee financial wellness programs and partner with financial consultants to educate your staff members on budgeting, saving, investing, and paying off or managing debt. Plus, if you plan on providing the financial benefits we discussed, educating employees about the benefits of those programs makes sense.
Offer paid career development training for role-specific skills like coding or MS Excel during work hours. This will enable employees to learn valuable new skills without giving up on their personal time.
Personal development can help your employees reach their full potential, resulting in a productive and motivated workforce. Not only will this type of training make them more self-aware, but it’ll also promote resilience to work-related stress because of their improved cognitive appraisal.
Again, try to provide personal development training during work hours to encourage participation.
Employee recognition and engagement promote morale, build positive relationships, and boost productivity. According to a 2018 Society for Human Resource Management (SHRM) employee recognition study, it positively affects the overall employee experience (89%), employee relationships (87%), and employee engagement within the workplace (84%).
From sharing a few appreciative words with employees to giving employees award titles, small gestures can make a lot of difference. If you want to go further with acknowledging their efforts, offer them the following benefits and perks:
Recognize your employees’ hard work by creating an employee recognition program.
Most common employee recognition programs include thank-you awards, free health checks, work anniversary celebrations, and new office space. But you can customize rewards depending on your and your employees’ unique needs.
If your employees work hard, let them also play hard. In addition to offering the mandatory vacation time (at least three weeks), let your staff members enjoy paid time off on their birthday and a bonus vacation week.
Reward employees for a long tenure. Offer the fourth week of vacation every year for those who have completed four years — or make employees eligible for Friday vacation days during summers after they reach five years of employment.
Working in an office environment works great for bringing employees together and cultivating a sense of belonging. But many employees prefer flexible scheduling or work-from-home opportunities.
Case in point, over 54% of employees want to continue working from home post-pandemic, according to the Pew Research Center.
Offer perks that make working from home easier, like a home office budget or food delivery service. Recently, many companies have started switching to a 4-day workweek, which is again something you should consider to attract talent.
Now, you don't have to go remote overnight—this is something you can ease into.
Let employees work from home a few times a week, and do away with the traditional 9-to-5, Monday to Friday work schedule. Talk to your employees to create a flexible schedule, outlining which days and times they will work to avoid confusion.
If you don’t want to give employees control over their work hours, consider other options like giving them an extra day off every month, leaving work early every other Friday, or alternating between working mornings, afternoons, or evenings.
Host company parties celebrating big and small wins during work hours. If your team is remote, have a virtual happy hour or team lunch over Zoom or Skype.
Remote working unquestionably has many advantages, but it can also lead to a disconnect between team members. Luckily, team-building activities can help co-workers bond and create a relaxing, fun atmosphere that also lets them form deeper connections.
Make sure everyone gets a say during a team-building event. Use employee engagement tools to hold discussions and surveys, and encourage everyone to share their opinions.
But simply offering employee benefits and perks isn’t enough — you also have to do it right. Below are the dos and don’ts of effective employee benefits and perks plans:
Many companies have made notable efforts toward establishing an effective employee benefits program that resonates with their employees and increases overall employee satisfaction and motivation.
Here are five companies we believe offer remarkable employee benefits and office perks.
Google is many people’s dream company, and its excellent benefits package is one of the main reasons why.
Besides the basics (health insurance, 401(k), paid time off), the company offers their employees free legal advice, travel insurance, and on-site medical care. And that’s not it — an Insider article reported that Google employees get free meals at work, free workout classes, and free massages.
New mothers get extra cash and vacation time, while other staff members can request help from an emergency travel assistance service. Employees who love sports can enjoy volleyball courts and heated swimming pools. Additionally, Google not only matches employees' charitable contributions, but for every five hours of volunteer time, the company donates $50 to that nonprofit.
Multi-billion Dollar company, Meta, offers employees amazing benefits, including free housing and healthcare coverage, wellness allowances, and several other items in addition to a substantial salary. For context, entry-level interns take home over $7,000 a month.
The company also has some of the most unique and beautiful offices in the world with tons of fun amenities. An on-site barbershop ensures employees always look polished, while an arcade full of video games makes for fun team bonding sessions.
A parent himself, founder Mark Zuckerberg is passionate about offering parents and expecting parents additional assistance. Meta offers four months of paid parental leave, plus a $4,000 bonus to employees who just had a newborn.
Starbucks has a mix of serious benefits and fun, unique perks for its employees.
The company offers a family expansion reimbursement program (assisting eligible partners with specific costs of growing their families), tuition reimbursement, and excellent healthcare and well-being programs, as well as free dry cleaning, Spotify subscriptions, and weekly coffee and tea supplies.
What's more, eligible employees can earn a bachelor’s degree with 100% tuition coverage, coaching, counseling, and advising. Starbucks also takes care of its employees’ work-related commuter expenses.
Salesforce employees enjoy a lot of flexibility when it comes to employee benefits.
The company allows them to set aside a maximum of $510 in tax-free income to cover parking and commuting costs. Plus, they can use special wellness perks or sign up for travel and education programs.
Salesforce also pays university tuition for workers wanting to upskill and gain more expertise in their field and reimburses them for buying textbooks. While the company limits qualified donations to $5,000 a year, it encourages employees to give back to the community by matching their charitable contributions.
Employees can also enjoy $100 worth of massage therapy or yoga classes, along with discounts on cleaning services, concert tickets, and several other purchases.
Airbnb is well known for their employee benefits package, so you know they’re doing something right.
The company offers excellent healthcare options, including medical, dental, vision, life insurance, and disability—all covered 100% for the employee and up to 70% for dependents. It also matches 3% on employees’ 401(k) contributions and allows employees to use ESPP (the option to buy company stock at a 15% discount).
Generous paid time off options and a comprehensive leave policy ensure Airbnb employees are well-rested and enjoy a healthy work-life balance. Office perks include innovative office spaces, local and worldwide travel benefits, and an in-house chef.
The employee benefits and perks you choose to offer your workforce matter. Be strategic in what you offer to cultivate a productive, inclusive culture that supports employee requirements and aligns with your company values and mission.
By ensuring your company offers desirable benefits and perks you also let your employees feel valued, making them more likely to stick around.