We are continuing with our list of the top 10 HR trends for 2022 and this week we are looking at employee benefits.
Employee benefits or compensation packages is something that is becoming increasingly important in the world of work but have been around a long time.
But what exactly are they?
What are the benefits of benefits?
How can we ensure that the package provided is fit for purpose?
What are benefits?
Actually, this can be split into two: benefits and perks. Benefits in a work sense, are all the added extras that are separate from pay. Some benefits are core no matter someone’s position or tenure in the organization; others can depend on experience & role.
Employee benefits can range from what you could call job benefits such as insurance (medical, dental etc), to being able to buy shares in the company. Other benefits could be training opportunities. Some of the baker’s dozen of benefits that could be featured in a benefits package in 2022 include:
- Health insurance
- Paid time off
- Dental
- Vision
- Life insurance
- Retirement plan
- Relocation help
- Stock options
- Tuition/loan assistance for study
- Parental leave
- Remote work options
- Home office allowance
- Employee referral bonus.
In addition, organisations could also include perks. The difference between the two is that benefits help address core needs such as health and work life balance. They can impact livelihood & wellbeing. Perks on the other hand can make the workplace more enjoyable (and not just a coke machine or a ping pong table). Benefits tend to have industry standards whereas perks are more individual and bespoke as they are at the discretion of the company. The top 10 perks include:
- Bonuses
- Complementary meals or snacks
- Retreats or away days
- Fitness perks (gyms -on site or membership, subscription to wellness apps etc)
- Employee recognition (awards, employee of the month, dedicated car parking space etc)
- Discounts on service or products (money off your morning coffee or savings on car hire, holidays etc)
- Childcare assistance
- Development opportunities
- Travel reimbursement
- Care packages
Some of these things you may consider to be part of a contract, or a right and not a benefit or perk as such i.e. development opportunities or away days.
What are the benefits of benefits?
Throughout history (even in days of coal mining towns or fishing ports) people have never worked for pay alone. There has always been some sort of additional benefit or perk attached.
Workers for Quaker Cadbury family were housed in the “Bournville Village”. The trust, set up in 1900 by George Cadbury, featured 313 homes which were known as the “ten shillings” or “sunshine homes” as they had an affordable rent to help those on a low income as well as to house those who worked in the factory. In addition, the village featured parks and recreation areas to encourage swimming, walking & sport to look after the physical & mental health of the residents.
Up to date benefits packages, are one of the most basic employee engagement and retention strategies, but more recently have also been used to support talent attraction.
A competitive benefits and perks package can sway someone’s decision to work for and stay working at an organisation.
As well as attracting the right talent and ensuring a reduction in avoidable turnover, the additional benefits for an organisation can also include productivity. As, if wellbeing is ignored ,this can lead to drops in performance as well as over time increases in presenteeism and absenteeism.
A good benefits package can also see a decrease in health and safety issues too.
Perks can be used to tempt people to join as well as raise the morale of existing employees. Perks can be a way for an organisation to show that it cares about its people.
Benefits packages are generally delivered via a platform, these can be rewards, salary sacrifice schemes or linked to wellness. Some examples can be found here:
What should be included alongside the industry standards will likely depend on location and company dynamic. They could also be structured in tiers – the benefits differ between pay grades or levels of seniority.
How can you ensure that the package provided is fit for purpose?
Here are my top 3 tips for you:
#1 The simple answer here is to ask your people what they would like to see included.
#2 You could use a benefits analysis package like Qualtrics which can help you look at your existing package, its usage and how it lands with your people to help you measure the effectiveness.
#3 It is important to continue to monitor the effectiveness, people’s needs and wants change so the benefits and perks should be regularly reviewed.
Perks and benefits do not replace company culture, but they can form part of it.
Perks and benefits are not standalone; they form part of the employee value proposition (EVP).
The EVP is the full set of benefits that your organisation offers to its people in return for the skills, experience, and qualities that they bring.
The EVP generally includes:
- Benefits/perks
- Financial rewards
- Career development
A good EVP can help you to build your employer brand.
The EVP is aligned to the organisation’s values & vision. Think of the EVP being what will make people want to work, and be proud to work for your organisation.
So, the reason why benefits are now more important than ever is that many people will look at an organisation whose values match their own and provide a reason to work for them.
For more information on employee benefits Workable have created a handy guide.
If you are not sure where to start with your EVP? Well, we here at People Lab can help. If you want to get in touch to say hello and find out more, please contact us.
@Karen
