We constantly hear about companies that offer “competitive benefits packages”, but what does that really mean? What is it that constitutes a valuable benefits package? From unlimited massages, exercise facilities, & free food to 401k plans, PTO, & health insurance — good benefits can play an important part in attracting and retaining top talent, increasing company productivity, and creating a great employee experience. Before defining a valuable benefits package, it’s important to recognize the difference between benefits and perks.
Benefit: non-wage compensation provided to employees. Employees would normally have to self-fund these if not provided by the employer (U.S. Department of Labor’s Bureau of Labor Statistics)
Perk: things that are nice to have, in addition to salary + benefits. Perks tell more about company culture and values, and typically go above and beyond traditional benefits offering (ex: covering a gym membership as part of healthcare ). (HR Insights Blog)
Together, benefits + perks make up a company’s Benefits Package.
Don’t get us wrong, we wouldn’t say no to Airbnb’s employee perk of $2,000 annually to travel and stay in any Airbnb in the world or Gentech’s onsite space and car wash, but we understand that not every company can afford to give their employees these extraordinary perks and not every perk will have a great impact on the company.
So, what is it about an employee benefits package that can make it so impactful on an organization? According to SHRM’s (Society for Human Resource Management) 2018 Employee Benefits guide, “organizations that use benefits as a strategic tool for recruiting and retaining talent reported better overall company performance and above-average effectiveness in recruitment and retention compared with organizations that did not.” In SHRM’s use of the term benefits here, they’re talking about both benefits and perks.
Although not astronomical, the percentages in company performance and effectiveness in recruitment and retention were both higher for companies that use Benefits Packages as a strategic tool compared to those who use it non-strategically.
Think about your own performance. Does it drop if you’re unhappy or distracted? So it must be obvious that if employees are happy, they perform better. Providing a comfortable company Benefits Package makes employees feel more secure in their livelihood. Taking care of important life matters means that employees won’t have to worry about them providing more time to produce quality work and increase company performance.
When you look at a company’s “careers” or “culture” page on their website, what do you see? Certainly not a photo of a solid 401k account. You see photos of the people or perks like snack bars and in-office gyms –you see the culture. Showcasing your perks will hook talent. The benefits you offer will close offers.. Both are important in today’s market, and they work together throughout the entire recruitment lifecycle.
Are you having a hard time retaining employees? Having an attractive Benefits Package can make it even harder for your best employees to leave. After looking at some common statistics, you might be further ahead of the game than you thought. For full time employees, 83% of companies share health care costs with employees. Only 16% of health care costs are fully paid by organizations. If you have the extra money, fully covering benefits like healthcare or adding in a perk like covering gym costs (if it aligns with your values) can be beneficial.
Where to Begin
To start, organizations need to know what employees actually want. According to a survey taken by Fractl in 2017, these are the benefits and perks most valued by job seekers.
Insurance benefits topped the list with a whopping 88% of employees saying they would consider their options for a lower paying job if they had better insurance benefits. According to the 2018 Employer Benefits Survey by the Kaiser Family Foundation, on average, company-based health insurance costs $574 monthly for individual coverage and $1,634 monthly for family coverage. Cost is obviously important but considering the coverage levels can help your organization stand out from its competitors.
Coming in second is flexibility in where and when employees work, including perks like flexible hours, PTO, and remote options. Working remote has been shown to boost efficiency and productivity as well as decrease real estate costs. Unlimited paid time off shows that you trust your employees and can actually cut costs — HR will never have to repay someone for not taking enough vacation days again! If you’re looking for new and easy ways to update your Benefits Package, these can be great, easy options.
Towards the bottom of the list includes several perks, like free coffee & snacks, a complimentary gym membership, day-care stipends, and free company outings. These perks go above and beyond traditional benefits offerings and while they aren’t necessities to complete a job with high quality, they can certainly improve an employee’s overall quality of life which will translate back into your business over time.
Having a great Benefits Package not only attracts and retains top talent but keeps your employees invested and productive thus impacting your bottom line. If you’re trying to enhance your employee experience, consider adding perks, like Ohana, to your Benefits Package. Reach out to an engagement specialist today!
Originally published at www.tryohana.com on January 21, 2019.