The data is in: Employees Benefits are valued by employees. In many cases, they value them even more than an equivalent increase in cash compensation.
According to data from Glassdoor, 57 percent of workers now report that employer perks and benefits are among the most important factors they consider. And eight out of ten of them want benefits or perks more than they want cash.
Meanwhile, the fiercely competitive market for talent has never been more intense. Employers are responding by sweetening their benefits. According to the Society for Human Resource Management, 72 percent of employers increased their benefits offerings just in the past year. Furthermore, smaller employers are competing by offering benefits that were formerly available only at the biggest corporations. Employers are selecting and offering benefits not just for the purposes of increasing their employer value proposition with current and prospective employees, but also to make statements about their corporate values and culture.
Are you keeping up? 72% of employers increased their investment in employee benefits in the past year (Society for Human Resources Management)
1.) Employee Wellness Programs
Just a few years ago, corporate wellness programs focused on smoking cessation and weight loss goals. After all, success in just these two endeavors would clearly lead directly to substantial and measurable savings in employer health care costs.
What happened? The success with well-implemented programs was overwhelming. When employers put some leadership oomph behind their employee wellness programs, and cared enough to measure results, they experienced so much ROI that they began doubling and tripling down – expanding their basic wellness programs to include more and more dimensions of employee well-being.
Now, wellness programs have taken on new dimensions: They are no longer focused solely on the direct ROI of reducing smoking and obesity-related health care costs, but also at increasing employee engagement and fostering a sense of community among employees and between employees and employers.
60% of employers report wellness programs improve employee retention; 61% say these programs enhanced employee performance and improved business profitability.
According to the Deloitte Global Human Capital Trends report, only about 23 percent of corporate leaders who sponsor wellness programs said their primarily goal was simply to reduce direct health care costs. 43 percent said they designed their programs to reinforce their company’s mission and vision. At the same time, a solid majority, 60 percent, said their wellness programs improved retention, and 61 percent said their programs improved employee productivity and business profitability.
Today’s most forward-looking wellness programs have evolved beyond smoking and weight loss programs and now frequently include:
· Health coaching
· Stress reduction (onsite stress reduction program sponsors quadrupled between 2014 and 2018, rising from 3 percent to 12 percent)
· Incentives for meeting various fitness and weight loss/body fat percentage goals
· Support for athletic and sports participation
· On-site fitness and yoga classes
· Certified nutritionist support
· Diabetes counseling
· Non-traditional PTO
· Anti-sedentary programs (standing desks, treadmill desks, digital reminders to get up and walk around)
· Relationship and interpersonal skills training (think someone in the office could use this?)
As economies of scale artificial intelligence technologies evolve, many of these benefits are becoming increasingly affordable for smaller companies.
Implementation tip: Get senior management to lead by example. This isn’t a program you can delegate solely to HR staff to implement and then forget about. Culture is a leadership function, and leadership starts at the top. The more senior management actively participates, the better your outcomes will be throughout the organization.
2.) Unlimited paid time off.
Since 2014, the percentage of employers offering unlimited time off has increased by 400 percent, according to information from the Society for Human Resources Management.
In recent years, it’s been smaller companies taking the lead in offering bold, innovative new perks and benefits. But in this case we saw early adoption from a true global industrial giant, General Electric, which rolled out the benefit for 43 percent of its salaried work force – about 30,000 employees — in 2015.
Unlimited isn’t really unlimited, of course. Employees still have to perform. Time off in these programs is still cleared with supervisors and approved provided all the employees’ responsibilities are taken care of. Since only about 2 percent of employers formally offer this benefit, it can be a potent differentiator for the right company.
Employers who have rolled it out so far have found a number of benefits:
· Reduced liability for unused vacation days, which no longer have to be set aside and paid out in a lump sum when an employee with a huge bank of unused PTO leaves the company. According to research from Project: Time Off, this savings alone averages $1,898 per employee.
· Less administrative headache: Managers no longer have to track vacation, sick and PTO days for their workers and can focus on core tasks that actually generate revenue.
· In practice, workers have generally not taken very much additional PTO under these programs than before. The companies that offer this perk tend to have a lot of people who like to work.
· Improved recruiting and retention.
· Significant boost for employee morale
Telecommunication technology and ubiquitous internet access has made this policy more realistic – workers can take extended periods away from the office and still stay in touch, and virtually attend important meetings and functions. However, employers must still track the hours worked by non-exempt employees in order to stay in compliance with the FLSA and state wage and hour laws.
Additionally, some states may require you to keep this program separate from your sick days. So consider tracking vacation and sick days separately – especially if you have workers in California and Oregon.
It’s not for every employer, obviously. It works best for companies with highly-motivated, self-starting workers with a passion for the mission of the company, project-based workers and those with jobs that don’t have to be done on-site.
A programmer can take advantage of this policy a lot without significantly impacting his or her network performance and output. Your custodial and plant maintenance staff probably can’t.
Don’t call it “unlimited PTO.” In practice, companies have found that using this name caused confusion among employees. Use terms like “flexible time off,” “work-life balance program” “responsible time off” or something else.
Also, take care to ensure equity among different departments and duty positions. Some jobs simply have to be done on site. These workers may become resentful of a generous company perk that only other people seem to be able to take.
It gets worse when these people come back from their amazing vacations and start sharing photos and stories of their epic odysseys with the workers who couldn’t go.
3.) Pet health insurance.
Visited Portland lately? There’s a trendy gastropub serving craft beer and artisan vegan burgers on every corner – and the outdoor areas are filled with dogs, accompanied by their caretakers.
But nuts can make great employees, too, and employers have decided that we need them. The percentage of employers offering veterinary medical insurance has nearly doubled over the past four years.
These plans are increasingly popular, particularly among companies seeking to attract younger workers, because the administration of these plans is very hands-off: There’s no open enrollment period headache, and your HR people have no paperwork to do. Once you make an arrangement with a vendor, all you have to do is communicate the benefit. Employees sign up on their own on the vendor’s website, and they’re off to the races.
How it Works
Benefits are on a reimbursement basis for now. Covered pet owners must still pay the veterinarian for services. But at least one vendor makes it easy to get reimbursed simply by downloading a mobile phone app, logging in, taking a photo of the veterinarian’s invoice, and uploading it to their system.
Employees may be able to customize their deductibles and coinsurance to arrive at a premium that suits their budget – but your HR staff wouldn’t be involved in that process. All that is offloaded to the pet insurance vendor.
Employers can handle premiums by payroll deduction, along with their other employee benefits, and pay premiums monthly in batches. This vastly reduces administrative costs for the pet insurance vendors, and so employer plans are offered to workers at a discount not available for individual buyers (typically 10 to 20 percent. Multiple pet discounts are sometimes available, depending on the vendor. There are typically no minimum participation requirements to worry about.
Premiums depend on the pet’s breed, age and medical history. Pre-existing conditions are generally not covered.
Benefits for Employers
Clearly, people love their pets. Since only about 11 percent of employers currently offer pet insurance as an employee perk, this benefit is still a useful differentiator that can set you apart from other employers in your community.
And the potential retention benefits are obvious: When an employee’s beloved pet has an accident or injury that requires expensive treatment, and they submit that first claim via their workplace-sponsored plan, they’re going to remember you.
Consider combining a pet insurance rollout with a corporate benefit or paid volunteer program with animal-focused charities. This will be a big hit with some of your animal-loving employees.
4.) Student Loan Repayment Assistance Programs
The average college graduate who leaves school with student debt owes more than $30,000, and some of them graduate owing over six figures. That translates to the equivalent of a good-sized car payment, every month, when these recent graduates are just entering the work force.
You can offer the most generous 401(k) match in the world – and tons of voluntary benefits. But it won’t reach this cohort. They couldn’t take advantage of an employer match if they had to – because the student loan payment is sucking up all their spare dollars. And generous in-office day care and expanded parental leave, adoption and fertility treatment isn’t doing them any good: Their student loan burden is causing them to put off starting families.
That’s why a small but rapidly-increasing number of employers are now offering to help employees pay off their student loan balances – not with direct salary increases, but with a focused program of direct payments to student loan service companies.
How they work:
Details vary, and employers are free to design their program any way they see fit. Companies typically provide a monthly or annual student loan contribution for qualified employees over a set number of years – effectively setting a lifetime cap on potential benefits. Some back-load the contribution, giving employees an incentive to stay with the company a certain number of years.
Costs are deductible to the employer, but unlike 401(k) matching contributions and HSA contributions, these benefits are taxable to the employee as ordinary income. Employers should be careful not to throw too much into the program at once and cause employees to get blindsided by a high income tax liability next April 15th, without having received the cash to pay it with.
To recent graduates, this benefit is as valuable as a 401(k), says Meera Oliva, the Chief Marketing Officer at Gradifi. And it’s a big winner when it comes to attracting new talent, says John Samaan, head of human resources the Millennium Trust Company.
New development: Recently, one company received a private letter ruling from the IRS granting them permissionto add a new twist to their 401(k) plan.
Warning: HR geekery follows.
They asked the IRS if it would violate the contingent benefits rules under sections 401(k)(4)(A) and 401(k)-1(e)(6) if they expanded their 401(k) matching contributions to provide matching funds for employees who verified they were paying down student loan balances. That is, under the company 401(k) plan, workers may receive employer matching funds to their 401(k) accounts if they contribute to the 401(k) or if they make verified payments to student loan servicers. The IRS private letter ruling gave them the green light, which potentially opens the door to other employers to offer the same benefit.
5.) Financial Wellness
Despite the overall strong economy, millions of American workers are still under severe financial stress – and that’s disrupting their productivity at work, say experts.
High financial stress levels mean employees are distracted at work, and may even pose a safety hazard in certain industries: 46 percent of workers report they spend at least three hours per week during the workday worrying about or dealing with financial issues. Meanwhile, 60 to 80 percent of workplace accidents are attributable at least in part to stress. Health care expenditures at high-pressure workplaces are nearly 50 percent higher than at other workplaces, and financial pressures are the number one cause of stress.
53 percent of workers reported being under significant financial stress, including nearly two out of every three Millennial workers, according to recent research from Pricewaterhouse Coopers, and
Financial stress also contributes to a host of other workplace problems:
- Interpersonal conflicts at work
- Increased drug and alcohol dependency
- Theft and embezzlement
- Unauthorized moonlighting
- Sleep deprivation
- Job-hopping and high turnover
Employers are in a position to make a difference, not just by boosting cash compensation, but also by helping employees develop the skills and tools they need to make good decisions and help themselves escape from financial stress.
Employers are beginning to take notice, and technology is making it much more efficient to roll out a variety of employer-sponsored financial wellness program initiatives.
47 percent of employers surveyed by the Society for Human Resource Management now offer at least some sort of access to financial education. But the trend is accelerating both in terms of the numbers of employers offering access to a financial wellness program and in the scope of those programs.
- The percentage of employers offering classroom financial wellness training has more than doubled since 2014, from 15 percent to 29 percent.
- The percentage of employers offering one-on-one financial advice and counseling has doubled, from 17 percent in 2014 to 34 percent today.
- The percentage of employers offering online financial wellness programs has nearly doubled from 19 percent in 2014 to 35 percent today.
For example, employers are offering:
- Computer-based training and webcasts;
- In-person classes and workplace “lunch-and-learns” on benefits management, budgeting and investing;
- Access to individualized, 1:1 financial counseling from qualified financial planners and other advisors;
- Short-term installment loans and low-interest or no-interest paycheck advances;
- Access to relationship counseling, including for problems arising from financial stress
- Structure the program in such a way that the company is not involved directly with the employee’s financial decisions. Most employees do not want their boss knowing their personal financial issues.
- Make programs that are relevant to rank and file workers – even those with low initiative or confidence who may not be proactive in joining up with a voluntary program. Historically, many companies offered financial education and assistance to their executive and managerial employees, though this is changing.
- Integrate the program into routine company operations as much as possible, so that participation is not stigmatized.