Rethinking Employee Benefits to Attract and Keep Top Talent
Employers continue to struggle with finding and retaining employees as unemployment is still near all-time lows and the Great Resignation rolls on. To address these challenges, one area that employers need to closely examine is benefits, specifically their total benefits package. One’s total benefits package spans wider than the traditional view of benefits being comprised solely of medical, dental, and vision coverage.
In an employee-centric environment, successful businesses are exploring and implementing other benefits that both hold value for their employees and drive strategic outcomes (e.g., improved engagement, accelerated hiring, better retention, etc.) for the company. Here, we examine an array of broader benefits that employers are advancing, the drivers behind them, and what this means for human resource functions.
The pandemic triggered an epiphany for many parents who found that it would be more cost-effective or simply better for them or another parent to stay home instead of commuting to work and incurring burdensome childcare costs. A recent podcast featured one such parent who calculated that her net take-home pay would be a mere $2.00/hour after factoring in caregiver expenses. She, like many others, determined that this was not an acceptable arrangement. For many employers, remote and hybrid work models have helped to ease this issue. Many companies, however, need employees to be on-site or away from their homes to serve their customers. These organizations are turning to childcare subsidies or partnering with organizations such as care.com, Learning Care Group, and others to ease the burden on these employees.
Student Loan Repayment
Millennials now comprise 50% of the workforce, and trends show that number is expected to rise to 75% in the next few years. One of the biggest issues many millennials face upon entering the workforce is being saddled with significant education-related debt that acts as an albatross in their lives for years and years. The Consolidated Appropriations Act of 2020 now allows employers to offer up to $5,250 in student loan repayments tax-free. Here too employers are working with providers like futurefuel.io and ISTS to support these programs, as well as related benefits like tuition assistance or reimbursement.
Innovative PTO Programs
A study conducted for Fortune magazine found that “50% of workers in the U.S. would prefer access to unlimited PTO to earning a higher salary.” Unlimited PTO can indeed be a fantastic benefit in company cultures where time off is genuinely encouraged and respected. However, some organizations with unlimited PTO in place either consciously or unconsciously make it hard for employees to actually take time off and introduce stressors when time is taken. The result is that many employees with unlimited PTO take less time off than their counterparts who don’t have this benefit.
To help their employees unplug, recharge, and avoid burnout, LinkedIn gave its workforce of nearly 16,000 a simultaneous paid week off in April 2021. This collective approach helped LinkedIn demonstrate its value for and encouragement of time away, and at the same time lessened common PTO employee stressors of returning to a larger pile of work, new meeting requests, and fires to put out. Mental health days are also growing in popularity with other employers seeking to alleviate the issue of employee burnout.
A Strategic Shift for HR
The need for broader benefits programs like those described here is rising in tandem with the need for more strategic HR leadership. Executive teams are increasingly articulating the outcomes and objectives they want to achieve and then relying on an HR leader to develop the strategies and plans necessary to bring them about. This approach adds more value to an organization and makes HR more impactful than simply a tactically-oriented function that centers on administrative tasks and one-off employee events.
HR also needs to play a lead role in how benefits programs are communicated. This includes what programs are rolling out, how to use them, key parameters, and where to go with questions or for more detailed information. Parameters may involve limitations, caps, or what certain benefits can be used for. For example, wellness stipends may be applied to a narrow set of items (e.g., health club membership), or be used at the discretion of the employee for virtually anything that they determine will support greater wellness for them. Communication approaches also must consider the mediums for reaching employees depending on their work environment (e.g., dispersed field-based teams, in-office, work from home, etc.).
For the Benefit of All
Employers cannot afford to leave any stone unturned when it comes to creating a workplace that prospective employees want to be a part of and that existing employees want to stay with. That’s why companies must embrace a strategic approach to HR and assess whether they have the best possible plan and programs in place when it comes to employee benefits that support desired business outcomes.
Employers and employees alike need HR to maintain a steadfast focus on the needs and well-being of employees. Thoughtful and tailored benefits programs are a highly impactful vehicle for employers to show their employees they genuinely value their well-being and appreciate their contributions. When employers succeed in creating a culture where employees feel valued, they are rewarded in turn with tangible results that typically include increased loyalty and retention, reduced absenteeism, higher productivity, stronger financial health, and more.
Request a Free Consultation from a vcfo expert for strategic insights into rightsizing your benefit offerings to best fit your objectives while working within your available budget. As an experienced HR consulting firm, we can help plan and execute on all initiatives. We’ve worked with more than 5,000 business teams in our 26 years. We would love to hear your story and concerns, and share how our experience and collective wisdom can help.