Employees are looking for more than a paycheck. As unemployment falls and the labor market tightens, employers must provide more than cash to recruit and retain workers. This enticement comes in the form of both benefits and perks.
It’s tempting to lump benefits and perks together, but they are actually two distinct things. Benefits should be seen as additional forms of compensation, such as health insurance, retirement plans, company 401(k) matches and stock options. Perks, on the other hand, are focused primarily on things that help employees be happier, healthier and more productive. Common perks include gym memberships, company cars, staff parties and — at some companies — kegs and foosball tables in break rooms.
In general, benefits are what an employee would expect from any employer, while perks can vary greatly from company to company. It’s typically the perks that get the most attention in the media — lots of people know about the free gourmet food at Google, but fewer people pay attention to the internet giant’s retirement plans.
Both benefits and perks are important. Glassdoor reports that job seekers are doing more research as they evaluate potential employers, and benefits and perks are major factors. In fact, 57 percent of job seekers said benefits and perks are their top considerations before accepting a job.
What Benefits Do Employees and Job Seekers Want?
Fast Company says the top five benefits employees want are:
- Healthcare and insurance: Employees want the reassurance that they can take care of themselves if they’re sick. Most employers offer a variety of high- and low-deductible plans for individuals, couples and families.
- Vacation/time off: While Americans fall well behind the rest of the developed world when it comes to paid vacation, workers nonetheless expect to be able to take time off in addition to having company, state and federal holidays.
- Performance bonuses: Employees want to know that they’ll be rewarded if they do a good job. A formal bonus program lets workers align their performance and compensation expectations.
- Paid sick days: The U.S. doesn’t require employers to provide paid sick days, although people can get unpaid leave through the Family Medical and Leave Act. However, this has become an expectation. Some forward-thinking companies even provide unlimited paid sick days.
- Retirement plan: Companies have been moving swiftly from defined benefit plans — traditional pensions — to defined contribution plans, in which the employee elects to assign a certain portion of his or her paycheck to a retirement account, and the employer matches some or all of that contribution. Defined benefit plans are more expensive for employers than defined contribution ones are.
Monster reports that healthcare and vacation time are considered the two most important benefits by employees. Employers should remember that certain benefits might be seen as more or less important based on salaries — those with lower incomes are likely to place a greater weight on healthcare, while those with higher incomes might prioritize vacation time. Gender also has an impact: men tend to place more importance on compensation and bonuses, while women tend to prioritize vacation time.
The list of benefits that employees desire goes beyond this top five. Life insurance is very important to some employees, and paid maternity and paternity leave are also considered valuable at certain life stages.
Don’t Forget About the Perks
Compared to benefits, perks might be seen as the icing on the cake. But what good is cake without icing! Five perks that can improve recruitment and retention, as ranked by Robert Half International, are:
- Workplace wellness programs: This includes discounted or free gym memberships, on-site boot camps and yoga classes, health screenings and nutrition programs.
- Free food: Not every company is going to emulate Google’s free food and snacks for everyone. At the very least, make sure the coffee is good.
- Mobile working: Savvy employers are breaking down the walls in the workplace, allowing employees to work anywhere in the office instead of assigning them a desk that they must report to every day. This can encourage collaboration and innovation. Of course, the ability to work from home is highly prized by employees.
- Concierge services: Employees are grateful for any perks that save them time. On-site dry-cleaning pickup and car washing services mean less time is spent running errands, and more time can be spent with family and friends.
- Travel perks: Employers can’t make commutes any less painful, but they can lessen the financial burden by providing parking or public transportation reimbursement.