Benefits remain a vital part of an employee’s total remuneration and can distinguish businesses from their competitors and help to attract and retain talent. But do employers really know what their employees value as a benefit?
Lifestyle benefits, such as free meals, games rooms, yoga classes, nap pods, casual dress codes, birthday leave, being able to bring your dog to work and pawternity leave (that’s right...time off to look after your new pet!), are becoming popular and fashionable. In certain industries, companies offer these types of benefits to promote the culture, build the brand and attract new talent.
It is easy to see why employees are attracted to (or, rather, distracted by) these lifestyle benefits, which are novel, tangible and can be enjoyed from day one rather than saving for retirement or being covered for events which may never happen. However, do employees really value these lifestyle benefits over the traditional core benefits we are used to, such as pension and medical cover?
Tech companies in particular seem to be at the forefront of offering these types of benefits, most of which admittedly sound more like staff perks than real benefits. But they are also championing family friendly benefits and promoting the importance of work-life balance. For example, Netflix offer 12 months’ full pay maternity and paternity leave; Air bnb offer its employees travel coupons to stay at its listings; Spotify contributes to the cost of egg freezing and fertility treatment for its employees; and Adobe shuts down their offices two months every year, forcing employees to go on holiday.
Many tech companies also treat stock as a core benefit over higher base salaries and pension contributions, which can be extremely lucrative for employees in the long-term. But in today’s property market with hefty deposit requirements to buy your own home, being able to take your pet to work with a promise of stock vesting at some point in the future is not going to win over the bank manager.
What is clear is that employees often underestimate the value of their total benefit packages and many employers lack a clear understanding of what benefits their employees really want. What employees value on day one might also be different to what they value in the future.
Not every company can offer these types of lifestyle benefits or perks, but such benefits can help to attract and retain talent and build the brand. When companies decide which benefits to offer employees, they should bear in mind that the cost/volume of such benefits will increase along with the size of the workforce - do you really want 100 dogs wearing jeans running around your office on a Monday morning?
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