Small and growing organizations typically can’t offer the comprehensive benefits packages that large ones can. They have to be more strategic about choosing which benefits are most important to their current workforce, as well as the talent they want to attract. So, what are the most important benefits to employees?
Most Sought-After Employee Benefits
The most sought-after employee benefits in 2020 were:
- Remote work. While Covid has made remote work a necessity, there are benefits for employers and employees alike. Employees save on commute times, while employers can save on office space and expand their talent pool to anywhere across the globe. To be sure, post-pandemic, many positions will still need to be onsite — and organizations will be challenged to adapt high-performance cultures and collaborative work to a distributed paradigm. Time will tell if we are in the midst of a transition.
- Healthcare. Always a key benefit, healthcare has never been more important than it is during the midst of a pandemic.
- Paid time off. Employees need to recharge and employers want employees focused on their work, so it makes sense that paid time off is a key benefit.
- Flexible hours. The Covid pandemic has made flexibility more important than ever before. As parents struggle to deal with keeping kids at home—or juggling between home and schools as schools close and reopen and groups of children quarantine, flexibility has shot to the top of the list.
- Paid family leave. According to the annual benefits survey by The Society for Human Resource Management, the number of employers that offered women paid maternity rested at 34% in 2019. At the same time, 30% of companies provide fathers with paid paternity leave, and 29% offer paid adoption leave. Companies that choose to provide paid family leave have an edge when it comes to hiring.
- Four-day work week. Microsoft Japan recently let employees work four days a week with the same five-day paycheck. The experiment was a success, resulting in a 40% increase in productivity, as well as savings in electricity and printing costs. To make room for the lost time, the company also encouraged cutting meetings to 30 minutes and limiting their attendance, saving valuable work time.
- Free food in the office. Free snacks and beverages are on the rise, with 31% of companies now offering them in the office, up from 20% in 2016. Around 13% of companies offer a free or partially subsidized cafeteria. While 56% of employees are “very” or “extremely happy” at work, 67% of workers with free food at the office express the same satisfaction. Many companies offer free lunches — with “lunch and learns” — that give them an ROI through workforce education.
- Student loan assistance. Companies that wish to attract the best young talent need to consider establishing a student loan assistance program. Some of the companies already moving in this direction include Carhartt, GlaxoSmithKline and Pure Insurance.
- Pet insurance/pet friendly offices. Pet-friendly perks are attractive to both ends of the age spectrum. For younger people who choose to start families later in life and for empty-nesters looking to fill a void after the children have moved out, pets are a popular option. Anyone who has ever owned a pet knows how expensive veterinarian bills can be. Employees in this situation view the opportunity to purchase pet insurance as a big positive.
- Fitness perks. Gyms and yoga studios have certainly struggled during the pandemic. Even so, many find great value in fitness and diet challenges, and employers benefit from a healthy, active workforce.
Most of these probably don’t come as a surprise.
After all, there are baseline employee benefits that most industry experts say are needed to attract talent competitively: healthcare, paid time off, and possibly a retirement savings option. And then there are specialty benefits and workplace perks that help employers even small ones become an Employer of Choice. But, as tempting as it is to keep up with the Googles of the business world, here is a word from the wise:
Do not invest in benefits your employees do not value.
It sounds simple, but we often get wrapped up in the latest benefit or workplace trend. Pause, take a step back, and then ask employees what they value in benefits and compensation. Their answers might surprise you.
Employees increasingly value flexibility and health benefits
To add to the mix, studies show what employees value is changing. It’s not surprising that the Covid pandemic has made remote work and flexible hours top options. Going forward, employees want the flexibility to choose whether to work from an office or home. In a survey, half of all employees want that to continue working from home even after the pandemic is under control.
Health benefits are always important and it’s no surprise that the Covid pandemic has placed them front and center. According to a recent employee benefits survey, when choosing between a high-paying job and a lower-paying job with quality health benefits, 88% of employees would consider the lower paying job. A whopping 54% of employees would “heavily consider” this tradeoff.
What is meant by “quality” isn’t always clear and, when it comes to group health insurance, small and midsized organizations have few options and may struggle to get participation rates that will allow them to offer a plan they can afford. It’s easy to understand why many small and mid-sized companies are turning more frequently to health reimbursement arrangements (HRAs). These health benefits let employers control costs by offering employees a tax-free allowance to employees who, in turn, purchase exactly the health benefits they want.
Employee benefits are key to attracting and retaining top talent for your workforce. For smaller companies, however, finding the right mix of benefits to create a positive return on investment is a challenge. To attract and retain excellent people to represent your company, consider the types of benefits that employees truly value. Then, look for cost-effective ways to offer the most important benefits to employees.
What do you think are the most important benefits to employees? We’d love to hear from you. Leave a comment or question below!
This post was originally published October 9, 2015. It was last updated November 27, 2020.