In a job-seeker’s market, simply hanging out a “Help Wanted” sign isn’t enough to attract the top talent to your organization. Potential job candidates are weighing a number of criteria when looking at their options, and one of the biggest is the employee benefits you offer.
This isn’t news for companies competing for talent in traditionally tight markets like software development. The talent wars in Silicon Valley have famously led to lavish perks like free laundry, in-office climbing walls, and even home cleaning services.
Of course, few companies have the unlimited budgets to spend on free massages or professional chefs — and that’s just fine. There’s a better way to design your employee benefits program to truly support and attract top talent.
Definitions: Employee benefits vs perks
Benefits are traditionally considered any type of non-wage compensation provided to employees in addition to their normal pay. Things like insurance, retirement accounts, vacation, sick leave, and tuition assistance programs.
While employee benefits directly impact an individual’s lifestyle and finances, perks tend to be more discretionary. They’re fun to have (nap rooms, on-site yoga instructors, a company car), but they’re often more flash than substance.
In the end, it’s the substance that keeps the best employees around. Creating a great employee benefits program isn’t about turning your office into a massive playground, writes Joe Lazauskas for Fast Company. It’s about deliberately investing in those benefits and perks that support — and attract — the right employees for your company.
But how do you know which employee benefits are a good investment?
In 2016, content marketing agency Fractl asked 2,000 people how heavily they would weigh certain benefits when deciding between a high-paying job and a lower-paying job. They gave a variety of options, from free food and gym memberships to paid parental leave.
Maslow’s hierarchy of needs points out that humans can only do their best work (reach the highest levels of his pyramid) when their physical and mental health needs are met. So it will come as no surprise that the top-ranking employee benefits were ones that form a financial and psychological safety net, especially for younger generations.
Scroll down for their tow 5.
1. Health care benefits:
When your employees know their physical well-being is taken care of, they can focus more fully on the job at hand. Health care benefits include health insurance for the employee and his or her family, disability insurance, mental health days, and paid sick leave policies. Many companies are also starting to offer incentive programs to encourage healthy behavior, like gym membership rebates, bonuses for bike commuting, and free healthy snacks.
2. Flexible hours & the ability to work from home:
Technology is making remote work more possible — especially for knowledge workers — and employees increasingly want this benefit. With good policies in place, workplace flexibility is likely to make people more productive. And it can definitely make employees happier, which often translates to more productivity.
3. Vacation time:
Getting away from the office for a few days isn’t just fun — it’s incredibly beneficial to our mental health. More companies are catching on to this, and as Lazauskas notes in the Fast Company article cited above, some of the most progressive are even instituting mandatory vacation days. Make sure your vacation policy encourages employees to actually take the time off, rather than constantly checking in and turning it into a glorified work-from-home week.
4. Tuition & student loan assistance:
Education benefits are more rare than the first three on this list, but they’re gaining traction. More employers are providing tuition assistance for their employees’ ongoing education. This includes things like college degree programs, professional certifications, and online skills courses. These employee benefits can show a real return on investment for companies, too! Lumina Foundation recently released a study showing the best practices of companies who are achieving impressive ROI with their tuition assistance programs.
5. Paid parental leave:
Most countries in the world require employers to provide some sort of parental leave to new mothers (the U.S. being a big exception). Paid parental leave — and parental leave for new fathers — are lagging behind a bit, but companies who are looking to attract top talent are starting to offer them.
If you want to build an amazing team that sticks with your company for the long run, these five areas are the best use of your employee benefit funds.
Whatever you choose to offer, keep your focus on what will be ideal for your employees. While perks like catered lunches and nap pods are nice, most job seekers are looking for strong employee benefits that work as safety nets for themselves and their families.