Nowadays, there are lots of ways to entice and keep employees in a competitive job market.
Health insurance is great. But it’s the price of entry. Nowadays, top talent wants more.
As per 2023 Paychex Pulse of HR Survey, providing enhanced benefits offerings, increasing pay, and allowing flex scheduling are all potential components of keeping great employees.
Furter than that, they want something that impacts their life in a way they can feel.
To give them that, you can offer all sorts of things from gym memberships to concert tickets.It’s important to strike the right balance between benefits and cool perks.
Which means, if you want to increase your employee retention and attract top talent, you need to know the difference.
In this blog, we’ll dive into the nitty-gritty of creating the ideal blend of employee benefits and perks, considering the ever-evolving landscape of employee expectations and the dynamic nature of the modern workplace.
Getting on the Same Page: The Difference Between Perks and Benefits
Employee benefits and perks have subtle yet important differences. Getting on the same page here will provide helpful context for the next section of this article.
What Are Employee Benefits?
Benefits are part of the total compensation package offered to employees. While salary provides monetary compensation for the work an employee performs, benefits help meet basic needs and improve quality of life.
These are things like:
- Health insurance – Covers doctor visits, hospitalization, prescription drugs, dental, vision, and more. Helps employees pay for medical expenses.
- Retirement benefits – 401(k) matching and pensions help employees save for retirement. Money invested can grow tax-deferred.
- Life insurance – Provides income replacement if an employee passes away. Spouses and dependents can receive survivor benefits.
- Disability insurance – Replaces a portion of income if an injury or illness prevents an employee from working.
- Paid time off – Allows employees to take vacations, get sick, or deal with personal matters while still getting paid.
- Family-friendly benefits – Parental leave, adoption assistance, childcare discounts can help with major life events.
Think of them as “needs” rather than “wants”. Employees would have to pay for these things even if employers didn’t include them as part of the overall compensation package.
Why Are Employee Benefits Important?
Companies that offer good benefits packages like health insurance, retirement plans, and paid time off are not only helping their employees stay healthy and financially secure, but they are also attracting and keeping talented people.
In a competitive job market, having good benefits can set a company apart and make it stand out. This way, it can attract skilled professionals and reduce employee turnover.
In addition, offering excellent benefits is key to having happy and focused employees. It makes them feel supported in their work and personal life. In the long term, prioritizing employee benefits leads to a more satisfied, reliable, and dedicated team.
What Are Employee Perks?
Perks are extra amenities or nice-to-haves that go above and beyond standard employee compensation and benefits. They’re additional, non-wage compensation that is “wants” rather than “needs”.
These are things like:
- Gym memberships
- Flexible hours
- Snacks and food
- Childcare
- Equipment (laptop, standing desk, etc.)
- Tuition assistance
- Adoption assistance
- Insurance discounts
- Travel discounts
- Formal employee recognition programs
Perks are quickly rising in popularity among both employees and employers. According to a study done by Clutch, 53% of employees whose companies provide perks say the perks have given them a better quality of life.
Now, companies are jumping on the perks bandwagon because they’ve seen how powerful they are in gaining a competitive edge in a cut-throat hiring market.
Our clients at Abenity consistently see an increase in employee retention after implementing one of our perks programs.
Why Are Employee Perks Important?
Having cool employee perks is super important for creating a happy work environment and keeping employees satisfied.
It’s not just about their salary, it’s about the little extras that make them feel valued and show that the company cares about their well-being.
Perks like flexible hours, wellness programs, social events, and discounts on services can help attract top talent and keep current employees from jumping ship.
When employees are happy, they’re more likely to stay engaged, pumped, and loyal, which means they’ll work harder and the whole office will benefit from a great vibe.
Employee Benefits and Perks Trends in 2024
Focus on Healthcare
Employee benefits prioritized healthcare in the last year and will continue in 2024. With costs rising, employees looked to their employers to provide quality and affordable health insurance options. Comprehensive medical coverage for employees, spouses, and dependents continues to be highly valued.
Importance of Family-Related Benefits
Family-related benefits also grew in importance in 2023. With many employees caring for children and aging parents, benefits like paid family leave and childcare stipends make a big difference.
Employers that provide support for employees’ family responsibilities tend to have higher retention rates. In fact, 81% of HR professionals say they are more tolerant of employees caring for family members.
Mental Health Matters
Health benefits aren’t just about doctor visits anymore, mental well-being is stealing the spotlight. With nearly 2 in 5 employees dealing with a mix of mental health issues, performance challenges, and stress, it’s become a hot topic.
And from a hiring standpoint, mental health benefits are a game-changer, with 60% of surveyed employees noting its influence on job selection.
Flexibility, Work-From-Home Arrangements
Finding work-life balance is one of the most effective ways to improve employee mental health and well-being. Some employers have helped employees find this balance by offering remote and hybrid work.
People seem to be way happier and more productive when they work from home. This also helps companies keep their employees longer since they feel more valued and appreciated. Plus, companies can save some money on office space and stuff. It’s a win-win situation.
Skill Boosting and Career Growth
Professional development is a hot ticket, especially for the growing Gen Z workforce. According to a 2023 special report from Paychex, it’s all about meeting employees’ hunger for growth. To stay ahead and stay attractive, consider reskilling or upskilling your team.
Think of learning opportunities, job rotations, expansions, and peer coaching to keep everyone thriving.
How to Find the Right Balance Between Benefits and Perks
When deciding how to allocate your compensation budget between standard benefits and fun perks, it’s important to take a strategic approach. Here are some steps to find the ideal balance for your particular workforce:
Assess Workforce Demographics and Needs
Get to know your employees and what matters most to them. Look at factors like average age, gender split, marital and family status, income levels, and more.
Then, map out the benefits and perks that would be most meaningful. For example, student loan repayment assistance may resonate more with millennial staffers.
Survey Employees on What Matters Most
Send out an anonymous survey asking employees to rank various benefits and perks by appeal and importance. This gives you direct insight into their preferences. Follow up with focus groups or interviews to dig deeper into motivations and needs.
Compare Industry Benchmarks
Research what peer companies in your industry offer in terms of compensation packages. This provides context on norms and emerging trends. You may find creative ideas to adapt as well.
Prioritize Must-Haves vs. Nice-to-Haves
Make a list of all potential offerings and categorize them as essential benefits or discretionary perks. Focus first on the must-haves like health insurance and retirement plans. Then layer on nice-to-have perks once the core elements are covered. Budget accordingly.
Real-Life Examples: How Do Companies Strike a Balance Between Perks and Benefits
Explore real-life examples of how companies strike the right chord between perks and benefits, creating a workplace that caters to diverse employee needs.
Google aims to provide strong benefits along with unique perks to attract and retain top talent. On the benefits side, Google offers comprehensive medical coverage that employees can customize for themselves and any dependents.
The company promotes work-life balance by giving employees 20% of their work time to focus on passion projects or other interests. Google also provides up to $12,000 per year in tuition assistance through its Education Assistance program.
When it comes to unique perks, Google uses a hybrid work model that allows employees to work from home two days per week. Employees also get four “work from anywhere” weeks each year.
Free lunches, on-campus fitness facilities, and mental health-focused employee assistance programs round out Google’s desirable perks. With this mix of traditional benefits and innovative perks, Google hopes to keep employees healthy, engaged, and productive.
What Employees Think:
Pamela, a researcher in the Google Cloud space expressed her thoughts on one of Google’s employee benefit programs, “The moment the check cleared for the student loan repayment benefit, I started to dance in the living room… Just that little help (from Google), it feels like I’m not being left alone.”
At Facebook, employees have access to a wide range of benefits and perks focused on wellness, family support, and competitive financial packages.
On the wellness front, Facebook offers holistic well-being programs to help employees boost their physical health, build resilience for mental health, and stay healthy in all areas of life. Some of the wellness benefits include onsite gyms, healthy food options in campus cafeterias, resilience training, access to mental health resources, and health insurance plans.
For family support, Facebook provides generous paid parental leave for mothers and fathers. New moms can take up to 20 weeks of leave with full pay, while new dads get 8 weeks of leave.
Facebook also offers elder caregiving services, childcare support through the Bright Horizons network, and the ability to use pre-tax dollars in a flexible spending account for dependent care.
The financial benefits at Facebook are also strong. Employees get a 401K match of $1 for every $1 contributed, up to 7% of their salary. The vesting schedule for employer contributions is immediate.
Facebook provides life insurance, legal support services through MetLife, employee stock purchase plans, and bonuses. While unlimited PTO is not offered, employees receive 21 days of PTO, 12 paid holidays, and additional paid time off based on years of service.
By focusing on wellness, family, and financial security, Facebook aims to provide a balanced mix of perks and benefits that support employees at work and at home. The generous offerings help attract and retain top talent to the company.
What Employees Think:
A former integration specialist at Meta said, “The company has great benefits and really makes sure you and your family have everything you need. The benefits and flexibility at the company make the job great.”
Zappos
Zappos is well-known for their fun and flexible work culture. They offer employees comprehensive benefits as well as generous perks.
Health insurance is a key benefit at Zappos. Employees have access to medical, dental, and vision plans to take care of themselves and their families. Zappos pays 100% of employee premiums and 50%+ of dependent premiums.
Another area Zappos invests in is work-life balance and flexibility. Employees enjoy 5 weeks of PTO to recharge. Zappos also provides paid maternity and paternity leave beyond FMLA requirements. For day-to-day flexibility, roles at Zappos are eligible for hybrid or fully remote work.
One of their most popular perks is the generous employee discount program. Employees get a 40% discount on Zappos products and 20% for friends and family. With free shipping and returns, employees have easy access to the latest styles.
The focus on benefits, perks, and culture makes Zappos an attractive place to work. As they’ve grown from a small startup to a subsidiary of Amazon, they’ve maintained their commitment to supporting employees. The investments in well-being and work-life balance foster loyalty and satisfaction.
What Employees Think:
Megan, a full-time employee at Zappos is eligible for medical benefits such as hospital care and services, and mentioned, “It’s nice to know that when you go in for hospitalization, everything is covered. You never think about it before you need it.”
How to Start Offering Cost-Effective Employee Perks Quickly
Offering employee perks can be a great way to attract and retain top talent, but it can also be time-consuming and costly to implement. One way to quickly and easily offer great perks to your employees is to use an employee discount program like Abenity.
Abenity gives you access to a wide range of exclusive discounts on everything from subscriptions and insurance to hotels and pizza. It’s a quick and cost-effective way to offer employees valuable perks that can help to increase satisfaction and retention.
Interested in seeing how Abenity can immediately boost your compensation packages and give you a competitive edge? Click here to schedule a demo with one of our perks experts.
