Source: Brio Benefit Consulting
Published: December 1, 2020
The answers may surprise you
This article was written by our friends at Fringe Benefit Analysts, a valued UBA partner of ours based in Utah.
Offering employees benefits is an intricate balancing act of providing what workers have come to expect from their employers, what they perceive to be valuable for work-life balance and what expenses the business can justify to shell out in perks to keep their personnel happy.
The term “total rewards” has gained steam in recent years to describe both the benefits employees are traditionally offered, such as health insurance and retirement options, and the more progressive perks that have been driven by the Silicon Valley elite, such as free lunches and flexible hours. The right total rewards strategy can attract top talent and keep valuable employees around for the long haul. Really, the terms “benefits package” and “total rewards” come down to semantics. But whatever you call it, the offering needs to make sense for the employer as much as it needs to attract and retain key employees.
So, how are employers to juggle developing total rewards packages that are attractive to employees, and those looking to join the organization, while at the same time being kind to their balance sheets? A recent employee benefits study by Fractl may help guide decision makers in understanding what benefits are most important to employees today.
The survey asked 2,000 people to rank a list of 17 benefits. It asked them to weigh how each benefit would impact their decision when choosing between a high-paying job and a lower-paying job with better benefits. The choices that made it in the top three spots come as little surprise, considering a changing workforce that’s younger and more concerned with work-life balance than their predecessors.
One: Better Health, Dental and Vision Insurance
Not surprisingly, health-related insurance tops the list with 88% of respondents saying they would consider a lower-paying job with better health insurance than a higher-paying job. It’s not just this study by Fractl that highlights the importance of insurance products that helps employees combat ballooning healthcare costs. Survey after survey shows that health insurance is at the top of employees’ minds—no matter their age.
Two: Flexible Hours, More Vacation Time and Work-From-Home Options
The study found that, after better health, dental and vision insurance, employees want more flexible work arrangements that allow for more work-life balance. Actually, “More Flexible Hours,” “More Vacation Time,” “Work-From-Home Options” and “Unlimited Vacation,” were four different options that each made it in the respective four spots under better health insurance. They are compiled into one category here for their close correlation.
Unlimited vacation policies began as a then-controversial policy in Silicon Valley—and have since spread throughout the country in both high- and low-tech companies. Studies show that these liberal leave policies only improve employee productivity. And, there’s no denying that amid the COVID-19 pandemic, work-from-home policies have been essential for employee safety. These largely pandemic-driven policies will be reflected in the benefits employees prefer going forward. In fact, in a different survey, 83% of Millennials (now 50% of the workforce) said work-life balance is the most important factor in evaluating a potential job.
Three: Student Loan and Tuition Assistance
College is expensive. And it’s only growing more so. Therefore, it’s little surprise to see student loan and tuition assistance show up amid the most important benefits to employees. New data from U.S. News shows that average student loan debt has been on the rise for the past 10 years. Those who graduated in 2019 borrowed, on average, $30,062. That’s up from the $23,765 average owed by the graduating classes in 2009. Student loan and tuition assistance can help ease the burden of burgeoning college costs and lead to more satisfied and loyal employees.
While the Fractl study provides a good framework for determining what may be on your employees’ “benefits radar,” there are some other important considerations. First and foremost, the demographic of your employees will influence which benefits are most important to them. Much of the work world has made efforts to accommodate more flexible work arrangements asked for by Millennials. But as Gen Z workers begin to join the workforce, they’re bringing their own unique set of expectations.
Second, a good total rewards strategy needs to attract and retain talent, while also protecting your business interests. In other words, employees may ask for student loan and tuition assistance, but if the financial obligation strains your balance sheet, it’s likely not worth the financial risk. Likewise, virtually any benefit you adopt will need to be sustained as your business grows.
Third, understand employment laws and regulations. Some benefits are great perks to help keep employees happy—others are legally required of certain employers. Ensuring federal and state compliance is a huge responsibility that may warrant a little extra help.
For questions regarding this article, kindly contact Gui Wu (firstname.lastname@example.org)