Salary is not the only variable that employees factor when considering a company to work for or job to keep or leave. While pay is obviously a primary concern – after all, the reason people work is to earn a living – there are a number of other variables employees consider when deciding where to work. An employee’s benefits package is often just as important. However, which benefits are valued most by employees depends on the employees and their particular circumstances. A woman with small children might value flexible work hours and a Flexible Spending Account for child care while a man nearing retirement might value a company’s 401K plan and more vacation time. One might say that the benefit of a benefit is in the eye of the beholder.
That hasn’t stopped government from weighing in on the matter. In the recent State of the Union address, for example, one employee benefit that was given the spotlight was paid sick leave. Touting it as ‘middle-class economics’, President Obama challenged Congress to pass a federal mandate that provides paid sick leave for all employees, saying “Send me a bill that gives every worker in America the opportunity to earn seven days of paid sick leave.” In fact, three states and 15 cities have already passed measures requiring employers to provide paid sick leave to all full-time employees. Under current U.S. labor law, employers are not required to provide short-term paid sick days or longer-term paid sick leave. As companies and government weigh the pros and cons of what types of employee benefits to support, it might be useful to consider what benefits are needed and wanted most by employees. Companies that want to be top in their industry and want to attract the best talent must go beyond salary to offer benefits that employees want most.
Which Benefits are Most Beneficial?
Employee benefits come in many forms, functions and flavors, from the very basic to ones so “perk-y” they’d make most people go “Wow!” In fact, some benefits are so generous, they are usually only found at elite high-tech, Silicon-Valley companies with cash to burn. For example, Dropbox offers its employees such perks as Razor scooters to get around the vast office, yoga classes, a fresh-squeezed juice station and granola wall, made-to-order lunches, and a plush music room/lounge. Some companies even offer rest areas where people can rest if they are working long hours, and a game room with classic games such as billiards, darts, foosball and arcade games where employees can unwind or de-stress between projects, meetings or on long days. While all these perks would be well-received by most anyone, very few companies can provide such benefits. More importantly, they are not necessarily what typical employees in most industries want or need. Here are some benefits that aren’t necessarily that extravagant but that are really very beneficial.
1. Sick Leave
At the top of the list of desirable benefits for most people is sick leave. Sick leave does seem to be the benefit that most people want, need and that has the most benefit to society at large. Every year, many employees work sick because they have no paid sick leave and cannot afford to take unpaid time off. According to the Center for American Progress, it is estimated that 40 million workers in the U.S. don’t have any paid sick leave. This is not just bad for employees and their children, it is also detrimental to businesses. Dr. Jody Heymann, Director of the Institute for Health and Social Policy and Professor of Epidemiology at McGill University indicates that, “The economic cost of a serious flu outbreak is potentially enormous.” Indeed, it is estimated that unhealthy workers cost employers some $160 billion a year in lost productivity.
Perhaps that is why paid sick leave is a benefit that is offered by most industrialized nations, according to the Center for Economic and Policy Research. Most nations offer anywhere between five and 50 days of paid sick leave for anything from the flu to a major illness such as cancer.
Any company wanting to give employees just one benefit would do well to choose paid sick leave. It is the benefit most likely to benefit the company as much as the employee.
2. Vacation Time / Time Off
While most U.S. professionals get some amount of paid vacation per year, there are many employees who do not get any paid vacation time at all. Then, at the other end of the spectrum, there are companies that offer ‘unlimited vacation time’. While that may sound like something that is made up, it’s not. However, it is only offered by about 1% of all U.S. companies, many of which are publicly traded, including Virgin Group, Netflix, Zynga, Groupon, Glassdoor, Evernote, VMware, HubSpot, Ask.com, Motley Fool, Eventbrite, ZocDoc, and SurveyMonkey. They all have unlimited vacation policies or some policy resembling that. For example, Netflix does not require employees to request vacation time nor does it track vacation time taken. The expectation is that employees will still be responsible enough to do their work and not abuse the privilege. It is dubbed a ‘freedom and responsibility culture.’ In fact, instead of abusing the privilege, the opposite happens. The glow of trust and togetherness that such a policy provides actually makes employees less likely to take time off.
If that sounds crazy, it is but it is also true. Already, about 40% of American workers don’t use all their paid vacation days. As a way to encourage or pressure employees to take their vacation time, some companies take either a carrot and/or stick approach to vacation time. In the stick approach, companies make vacation time non-accruable (meaning that it must be taken within a given year or it is lost and cannot be carried over year-to-year). In the carrot approach, some companies give a bonus of up to a certain dollar amount toward reimbursing travel expenses, which helps employees to pay for their vacations.
However, standard vacation time is not the only way that companies are giving employees more time off. Some companies have gotten more creative about giving employees time off. Boogie, a NY-based social media agency, offers employees a four-day work week plus a two-hour lunch. Each week, employees work Monday, Tuesday, Thursday and Friday. Their daily schedule is 8am-1pm and 3pm-7pm. So they work nine-hour days, four days a week, for a total 36-hour work week. A small company of only eight employees, Boogie believes that the staff is more productive this way. According to the Boogie website, “the idea behind the concept is not to work less, but rather to work less conventionally and more efficiently.” They believe it gives more ‘balance’ to their employees’ so-called work-life balance, and forces staff to prioritize work into two segments: the urgent and the important. They also believe it reinvigorates staff, allowing them to maintain a productive, positive, and passionate attitude toward their work. They see the four-day week as allowing staff adequate time to pursue passion projects, engage in hobbies and recreational activities, and nurture valued personal relationships which infuses immeasurable purpose into their employees. Because they choose to close on Wednesdays, staff never work more than two consecutive days, and it gives each employee basically about 50 more vacation days a year.
Besides vacation time and sick leave, there are a host of other benefits that employees consistently rank as wanted and needed. Those variables can mean the difference between a company keeping great talent and a company losing top talent. Stay tuned to next week as we explore those benefits that really benefit employers and employees most.
Quote of the Week
“If you genuinely want to put customers first, you must put employees more first.” Tom Peters
© 2015, Written by Keren Peters-Atkinson, CMO, Madison Commercial Real Estate Services. All rights reserved.