Employee benefits and perks run the gamut of employer-covered health care and mandatory paid time-off to employee discounts and virtual team bonding activities. They are a key differentiator in employee compensation packages and play a large role in attracting and retaining top talent. According to a Forbes Advisor survey, 40% of employers say workers are willing to leave their job for a position with better employee benefits.
But how do you know exactly which benefits employees want? It is expensive and unhelpful to invest in benefits that employees don’t take advantage of. And how important are perks for employee well-being? In this article, we’ll explore which benefits and perks are in high demand among employees, and how you can invest wisely.
Employee Perks vs. Benefits
Before we continue, let’s talk about the difference between employee perks and employee benefits.
Employee perks are small, fun, complementary products or services that bring joy or convenience to an employee’s life. Employers often provide perks spontaneously, which adds to their appeal. Perks may also be optional or temporary working conditions, such as a funded work retreat or flexible working hours.
Employee benefits are substantive commitments from an employer to help an employee afford and access services such as health insurance, short-term disability insurance, or paternal leave. They typically involve a more significant financial contribution from employers because of their value. While perks are often shared directly from an employer to their employee, benefits may also be managed by a third-party company or companies.
Benefits Employees Want
Comprehensive health insurance
In the United States, many individuals rely on their employer for access to health insurance. Almost half of the American population receives health insurance through their employer. Public options are limited to programs for low-income people and the elderly, and self-paying for private insurance is prohibitively expensive for many people. The Affordable Care Act also requires large employers (those with more than 50 employees) to provide health insurance to employees or pay a penalty to the IRS.
As you can see, there are both ethical and legal reasons a company might choose to provide health insurance to employees. According to one survey, 98% of businesses provide some kind of health coverage for employees. What takes health insurance from an expected benefit to a desirable one is an insurance plan’s affordability, coverage, and flexibility. Employees appreciate access to good health insurance, which can be hard to find and difficult to afford on one’s own.
Social Security benefits help Americans retire, but for maximum security and flexibility in retirement, those who are financially able usually opt to supplement their retirement savings with a retirement fund. Anyone can set up a simple IRA or 401(K) with a financial advisor, or even a low-cost retirement account manager such as Fidelity or Vanguard. Employees appreciate the benefit of retirement matching opportunities through their employer. With this type of benefit, employers will match an employee’s retirement account contributions up to a certain amount. This can effectively double an employee’s retirement contribution and make a significant difference in a person’s finances over time.
Some employers offer a pension rather than an employer-sponsored or -matched retirement account. But pensions are becoming less and less common, especially in the private sector.
Paid parental leave
There is no federal law requiring that employers provide paid parental leave, though some states do have their own employer requirements. The Family and Medical Leave Act requires that employers offer qualifying employees up to twelve weeks of unpaid leave from work in case of serious illness, childbirth, or adoption. But many people cannot afford to take three months of unpaid time off of work.
A majority of Americans believe that employers should provide paid leave for new parents, including parents who adopt. Psychologists say that paid parental leave promotes better physical and mental health outcomes for parents. And yet only 35% of employers offer paid parental leave. This gap between what American workers want and what employers provide creates a significant opportunity for employers to gain a competitive edge in recruiting. Providing paid parental leave is also helpful for a company’s public image since it demonstrates a commitment to gender equality and equal access to work.
Sick pay and mental health days
Shockingly, there is also no federal requirement that employers provide paid sick leave. Most employers still choose to do so, of course, not least because without a robust paid sick leave policy, employees are likely to come to work when ill and spread sickness. Some companies also choose to offer mental health days. In an age when so many of us are coping with unprecedented personal and financial stressors, paid mental health days give employers the chance to invest in employees’ longevity and well-being.
Short work week
One benefit with recent growth in popularity? The four-day work week, so called because employees retain their usual salary while only working four days each week. There have been several recent, large-scale trials of this work method around the world, and results are consistently positive. Worker productivity generally either improves as compared to a five-day work week or remains the same. After completing the four-day work week trial, 13% of workers who participated said there was no amount of pay increase that could convince them to return to a five-day work week.
The results that make this work style so profound also make it a huge benefit for employees and job candidates. Companies report that when they publicize their four-day work week policy, they’re inundated with job applicants. This benefit is still rare and in high demand.
Child care assistance
The cost of childcare for working parents often goes overlooked. But the childcare crisis is one major reason women choose to leave the workforce entirely. The rising cost of childcare may be behind a recent 13% decline in labor force participation rate among mothers of young children. Many women barely earn enough to break even on the cost of childcare.
This benefit isn’t just about making employees’ lives easier by helping them afford or access childcare, with stipends, special savings accounts, or on-site childcare. It’s also about gender equality.
Perks Employees Want
Student loan repayment assistance
Many people have student loan debt from their undergraduate or graduate studies. The average student debt burden is around $32,000, due in part to the rising costs of going to college. Since businesses rely on people with college degrees to fill many of their job roles, student loan repayment assistance is a perk in high demand. Help paying off debt from college can ease financial stress for employees.
Thanks to funding from the CARES Act, employers can contribute up to $5250 tax-free per employee each year to help employees pay off their student debt. Since this tax exemption for student loan repayment is effective until 2025, now is a great time to offer this great perk to your employees.
Flexible and remote work
Far from being a relic of the early days of the pandemic, remote and flexible work arrangements are here to stay. While remote work isn’t possible for everyone, surveys show that workers across industries are interested in working remotely at least some of the time. 87% of people who are able to work remotely some or all of the time do so, according to McKinsey. Furthermore, employees of companies who don’t permit them to work on a remote or hybrid basis report that they are likely to look for a new job soon. In short– employees of all backgrounds are interested in flexible, hybrid, and remote work options, making these powerful perks for your company to experiment with.
High levels of burnout during the pandemic fueled a spate of corporate wellness programs, designed to boost morale and support employees’ well-being. Once limited to office exercise challenges (snooze), wellness programs now offer everything from access to guided meditation software to counseling from an on-site nutritionist. Perks like this come at a relatively low cost to employers and can make a big difference to employees’ well-being. Wellness programs are effective not only because of the services they offer employees, but also because they represent a public, visible commitment to an employee’s well-rounded and healthy life.
Bonuses are a welcome perk– after all, who doesn’t appreciate a little extra take-home pay? Annual bonuses are great, but because employees can come to expect them, they lose some of their benefits for the employer (namely, their potential to contribute to employee morale and intrinsic motivation). Consider expanding to spot bonuses as well. These are spontaneous, smaller-value bonuses employers provide in response to positive performance. Because they’re unexpected, they can boost employee morale, even among employees who don’t personally receive the bonus.
Desk setup stipend
As more and more employees are choosing to work remotely at least part of the time, it’s a thoughtful gesture to invest in an employee’s home office setup. This is especially true for employees who are entirely remote. 62% of organizations provide some kind of home-office subsidy or reimbursement.
In the long run, a home office stipend is a very small expense for employers that provides a significant quality-of-life benefit for employees. This is a low-cost perk with high impact– don’t miss out on this opportunity!
Employee discounts, either for company-related services or products, or with other businesses, can be a fun and flexible way to reward employees. They are an easy way to allow employees to choose which perks they’re most interested in, so you don’t have to invest in benefits employees don’t use. Fond’s Perks platform offers employees over 2,000 curated perks in the US as well as international perks in 14 countries.
If your company is public, you might consider offering low-cost or free shares of stock to employees. For example, Starbucks offers baristas (who it calls ‘partners’) Starbucks shares at key employee service milestones.
Complimentary meals and snacks
Meal prepping for the work week is a drag and buying lunch each day can be a major expense. This presents a unique opportunity for employers to make employees’ lives a bit easier each day by offering food perks. There is a huge range of approaches to this perk, from fully catered meals on-site to a snack box subscription for remote employees.
Whether you want to expand your employee benefits or invest in some fun new perks to brighten employees’ lives, there are options available for every budget. We can’t overstate the importance of rewarding employees for their performance, and employee benefits and perks are great opportunities to do just that. Fond’s employee rewards and recognition platform comes with a corporate discount program at no additional cost to provide extra perks along with a recognition program. To learn more, contact us today to sign up for a free demo.