This article was updated on July 26, 2018.
The latest employee benefits trends aren't about health care or higher wages. Instead, an increasing number of employers are offering free meals on-site, unlimited vacation time, flexible attendance policies and other non-traditional benefits. While the trend may have originated or gained popularity at Silicon Valley tech firms, offering non-traditional perks in an increasingly tight talent market could be the differentiator in recruiting and retaining the top talent in any industry.
Glassdoor reports that 57 percent of modern employees take "benefits and perks" into consideration before accepting a job offer. At some firms, the commitment to notable non-financial benefits has gone far beyond free snacks. Some of the most newsworthy perk policies at major employers nationwide include the following:
- Netflix supports a full year of paid maternity and paternity leave.
- Airbnb offers an annual $2,000 travel stipend.
- Asana covers executive and life coaching services.
Before HR leaders rush to implement free ski passes or macaroon baking classes (which are actual employer-offered perks at major firms), it's wise to consider the risk and reward of implementing these perks.
Is modern talent truly interested in these benefits? Or is it smarter to invest your funds in more traditional total compensation improvements?
What Do Employees Think?
There is a definite correlation between employers who offer perks and employee happiness. Forbes's most recent annual report on the best employers in the U.S. included a lot of names that are known nationwide for their non-financial compensation packages. Google, Facebook and SAS, for example, were all ranked in the top 15 for employee satisfaction.
Business Insider reveals some important insight into employee benefits trends, as well. Studies have indicated that "nonmonetary benefits can make all the difference" in times of talent shortage. However, employers and employees don't always agree on which perks matter most. While 25 percent of CFOs think new hires prefer more vacation days, 23 percent of their staff want to telecommute. Only 16 percent of modern workers feel swayed by "health and wellness benefits."
The most popular perk, however, is probably something HR leadership never thought of as a perk in the traditional sense. Entrepreneur writes that 81 percent of today's talent want "open communication" with their superiors instead of free food or gym memberships. While it would appear that perks certainly matter to employees, HR leaders must work to ensure their perk offerings are in line with their staff and new hires' actual needs.
Perks Aren't a Band-Aid
Although offering perks may have a positive impact on your employer brand, it's important to avoid confusing non-financial compensation with an effective employer branding strategy. For example, CEO and founder of Lendio Brock Blake pulls no punches in an article for Forbes when he says "all of the perks in the world will not improve employee morale if the underlying culture sucks."
Before you invest heavily in an on-site gym or tuition reimbursement program, consider your goal. Are you looking for ways to promote a strong, positive culture? Do perks have the potential to differentiate your healthy organization in an industry that's strapped for talent? Or are you trying to use perks as a stop-gap to cover up existing issues? Understanding the connection between culture and comprehensive employer branding is critical.
How Can You Leverage Perks?
Before rushing to implement expensive perks, HR leaders should evaluate their organization carefully, using culture, reputation and total compensation packages as benchmarks. So if your employer brand and compensation are already strong, implementing perks can be a way to enhance your reputation in competitive industries or regions.
Perhaps most importantly, large organizations should take a cue from employees' desire for open communication in the workplace and let their employees take the lead when it comes to designing a non-financial compensation strategy. By surveying your current talent, you can discover the priorities that matter to them — and then implement perks that will help you retain your best.