Nap rooms, ping-pong tables, gym memberships, free meals... Cool employee benefits and perks seem to have made the leap from only being offered at cutting-edge tech startups to becoming de rigueur at companies large and small.
In fact, the idea of offering unique and generous perks has been around for so long, it appears that some businesses may be moving on to a 2.0 era in employee benefits—ones that are more creative and experiential than those from the mid-2000s. This isn’t just about taking off for Labor Day, or extra Labor Day sale discounts. Note-taking app Evernote offers macaroon baking and other team-building classes through its Evernote Academy; Salesforce offers six paid days for employees to do volunteer work—and will give $1,000 to a charity of the employee's choice if they use all six days; and outdoor sports outfitter REI offers employees "Yay Days," or two paid days off to take advantage of the great outdoors.
The Benefits of Employee Benefits
"Companies are always looking for ways to differentiate from their competitors and get a leg up in this crazy war for talent," Kevin Yip and Taylor Smith, co-founders of Blueboard, an online concierge service that allows employers to reward their top performers with experiences like skydiving, trapeze lessons and family trips to Disneyland, explain over email. "Just a few years ago, a higher salary may have been enough to sway a candidate during their job search. However, today many companies are taking innovative approaches to landing top talent—everything from unlimited vacation to doggy day care and 'pimp out your desk' budgets in the thousands."
—Donna Meek, VP of business development, Staff One
In its roundup of the 20 companies with the best employee benefits, Glassdoor found that 57 percent of people reported that "benefits and perks [were] among their top considerations before accepting a job."
Employee retention is also behind these new creative perks. Talent acquisition software company iCIMS found that 66 percent of job seekers they surveyed would leave their current jobs for a job that provided a better salary and benefits, and CareerBuilder found that having good benefits was why 49 percent of more than 3,000 survey respondents stayed at their jobs.
To that end, PricewaterhouseCooper (PwC) announced that it would help employees pay down their student loan debt by giving them $1,200 a year for up to six years, a perk that may appeal to the new graduates the company reaches out to through campus recruiting. "It is a very competitive market for talent that we’re trying to have come into this firm," Robert Gittings, PricewaterhouseCoopers' vice chairman told Bloomberg. "We think this is going to be an important way to attract talent, including diverse talent."
"Companies with the top talent win their industries," Yip and Smith tell OPEN Forum. "Unique perks and benefits, if delivered correctly, can inspire top talent to join a company and also to stay over the long run."
Along with helping people stay on the job, these types of benefits may help make employees more productive and innovative while they're there.In a 2016 study in the Journal of Corporate Finance, researchers found that "firms with higher employee treatment have higher patenting activity compared with firms which treat their employees more poorly."
Giving Your Employees Benefits 2.0
While big companies may be better known for offering these types of generous benefits, smaller companies and startups are getting in on it as well, according to "The Human Company Playbook" by business management consulting firm Luminary Labs.
Interested in offering employee benefits 2.0 to your team? You should have a plan, according to Donna Meek, VP of business development at Staff One, a full-service professional employer organization. (Also, take a look at the Small Business Administration's guide on the legal and tax implications of common and optional benefits.) How much can you afford to allocate toward these new benefits? How will you manage participation? You don't want to be the boss who declares a new age of perks for your team, only to have to cut back later.
"When a business owner starts to offer unique benefits to boost employee retention, it sets the bar for years to come," Meek says. "As the company grows, it may become more difficult to manage benefits such as Volunteer Time Off (VTO), so it’s important to have a good system in place to track and manage these benefits and participation. It is important to consider the number of employees who would be participating in any new benefits. The company must put a policy in place to ensure that enough employees are on hand to manage day-to-day business activities, so that productivity and customer service do not suffer."
You should also try to make sure the employee benefits you're offering are perks that your employees actually want. If volunteering isn't part of your company culture or your employees' lives, an offer of VTO may land flat. "Conducting regular performance evaluations and listening to what your employees have to say is the best way to get a sense of the type of benefits employees really want," Meek advises. "Establishing a culture committee that meets monthly or quarterly to discuss suggestions and opportunities for improvement can be a valuable tool in establishing and promoting unique benefits. Additional options include an employee suggestion box, an interactive company brainstorming meeting or a regular survey of all employees."
A recurring HR concern small-business owners may have when it comes to offering generous benefits is the possibility for "unscrupulous employees to take advantage of perks and benefits," Meek says. Try to make sure you've effectively communicated the benefits program with your team, as well as what constitutes abuse. And in the off chance abuse does happen, consider this: You've just weeded out a poor employee and now have the opportunity to hire better talent.
Experiential Perks in Action
A big trend in this space focuses on volunteerism. Big companies are using "paid corporate international volunteerism programs to increase employee engagement," says Paula Caligiuri, the D'Amore-McKim School of Business Distinguished Professor at Northeastern University. "These are paid time-off opportunities, whether for a few weeks or several months, for employees to volunteer their professional skills in [non-governmental organizations] in developing countries. We are finding that companies can achieve their [corporate social responsibility] goals while dramatically increasing employee engagement."
"[International corporate volunteerism] programs provide opportunities for a firm’s skilled associates to go 'on loan' as pro bono advisors to NGOs in developing countries," Caligiuri continues. "With more and more people—especially millennials—having a greater desire to have positive impact on the world and to build cultural agility, employers of all sizes can benefit from adding an ICV program."
While benefits are typically available to all employees, some companies are taking experiential perks to another level by tying them to performance. Kevin Yip and Taylor Smith created Blueboard to help facilitate just that.
"Experiential rewards are noteworthy and shareable. They help build camaraderie around the office, and also increase employees' perception of their managers and company. [It's] a powerful way to incentivize behaviors and actions that drive actual business outcomes," Yip and Smith write.
"The great thing about experiential rewards—as opposed to cash, for example—is that they are public and incredibly shareable," they explain. "People openly talk about their trips, hobbies and adventures with co-workers, sharing a part of themselves that may not be seen as often at the office. Cash is quiet. No one talks about cash bonuses they receive. We've heard a lot about how much buzz our rewards create around the office. When an employee from Eventbrite got to go to the World Series last year after winning a sales competition, a division-wide email went out reinforcing why she won the reward and how rewards like that supported Eventbrite's company culture. A year later, people are still talking about it."
Some businesses and employees use the Labor Day weekend to take stock of what their work means. It can be hard to deny the prevalence and impact this new wave of employee benefits has had on the marketplace and workers.
"At the end of the day, it seems like employees—especially millennials—want a lot of things. We want to work with people we like and respect, we want to have an impact and we also want to be proud of where we work," Yip and Smith say. "However, when you boil things down, all of these things relate to one thing: Employees want to have an emotional connection with the company they work for, and with the colleagues around them. Any perks, recognition programs and benefits or rewards that focus on the human side of things are a step in the right direction for the evolving workforce."
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A version of this article was originally published on March 7, 2016.