Personalized Perks Can Keep Staff Happy

Companies are finding that customized benefits pay off in recruiting and retention

Chalk it up to the tight labor market, the allure of the gig economy, the importance today’s workers place on work/life balance, or the need to appeal to a demographic used to personalize everything from their coffee to their computers. But employers who want to keep in-demand talent from striking out for greener pastures are realizing that simply delivering a paycheck and providing off-the-shelf benefits packages don’t always cut it.

Nearly half of employees report that they would leave their current job within a year for another offering better fringe benefits – and more than 60 percent said they would take a job with a lower salary but better perks. At the same time, more than half of workers say they are interested in switching to contract or freelance work due to perks that are less available from companies, like flexible hours.

Here’s the thing: not only is the gig economy disrupting the traditional workplace, but the workforce is evolving. Employers are scrambling to meet the needs of four different generations at once while accommodating changing definitions of family and increasing demographics like older workers and single women. At the same time, the line between work and life is blurring and historically low unemployment rates have made competition for talent fierce.

In this new era, more employees are demanding that their companies treat them as individuals and address their unique needs. With this in mind, savvy employers are abandoning the old one-size-fits-all package of perks for a buffet of benefits that employees can customize. In 1996, employers reported a mere 60 different kinds of employee benefits available – by 2016, that number had jumped to 344.

Employees willing to pay more for better benefits

Companies’ commitment to a core menu of benefits including healthcare coverage and retirement planning hasn’t changed. But more are understanding that they can drive engagement and loyalty by expanding beyond these traditional offerings, based on the makeup and needs of their workforce.

Today’s benefits program might include such inventive options as telecommuting, financial and health wellness resources, pet insurance, egg freezing, electric car charging stations, Lasik coverage, student loan repayment, unlimited vacation time, expanded parental leave, and caregiver leave.

In a 2018 benefits report, 73 percent of workers said benefits customization is essential for increasing their loyalty to their employers. In fact, workers ranked the ability to tailor benefits to their own needs as a bigger loyalty driver and recruiting advantage than the ability to work from home.

Six out of 10 employees said they are willing to pay more for this perk, up from 52 percent a year ago. In fact, 83 percent said they would even be willing to take a small pay cut to achieve a better choice of benefits from their employers.

Of course, the ability to boost morale and win the war for quality workers isn’t the only reward these programs offer companies. Many of these custom choices also directly benefit a company’s bottom line: for instance, nearly 70 percent of employers say employees are less productive at work when they are consumed with financial stress, which a financial wellness program could minimize.

Reducing employee turnover also translates to significant savings, as replacing an employee can force companies to cough up between 6 to 9 months of his or her salary in recruiting and training expenses. Replacing an executive can cost as much as twice their annual salary.

Inventive options abound

Tools like employee surveys, focus groups, and intranet discussion forums can help employers learn about benefits choices their staff truly find valuable, instead of just throwing a bunch of options at them. Tailoring benefits communications by age and stage of life can also drive engagement by making employees feel supported by their companies during life events that matter to them like marriage, the birth of a child, funding a child’s education, or approaching retirement age.

Popular voluntary options include:

• Buying and banking. These benefit employees who are underserved by traditional financing options or want access to services not generally available to them. Choices can include short-term loans, employee discount programs, credit unions, and flexible spending accounts.
• Personal care and improvement. By encouraging employees to be proactive about their physical, mental, or financial health, employers show they care about their staff. Programs can include financial counseling services, wellness programs, and tuition assistance programs.
• Lifestyle and convenience. These options can allow employees to enjoy cost savings they wouldn’t receive if they weren’t part of a benefits group. They also provide the convenience of paying for them through payroll deductions. Choices might include child care, elder care, pet insurance, legal assistance, and larger amounts of paid time off.
• Financial safety nets. These protect employees from potentially devastating financial crises. Included in this category are home warranty insurance, identity theft protection, and long-term care insurance.
• Unique healthcare options. These enable employees to take advantage of health services that might normally be difficult to afford, such as IVF treatments or egg-freezing.

Personalized benefits can do wonders for a company’s brand – and pay off not only in recruiting but in the retention of high-performing employees. But with a workforce that’s more diverse than ever, it can be challenging to select the right mix of offerings to drive engagement and loyalty.

Karp HR Solutions can help you tailor a program that meets the unique needs of your workforce and maximizes retention. To learn more, contact us today for a free consultation.