As more employers face increasing health insurance costs, many are looking at their total benefit package to find the best benefits to invest their dollars in.
Recent years have brought an arms race to employee perks such as free meals and vacation benefits,” wrote Jena McGregor in her Los Angeles Times article, What to expect in the workplace in 2017. “One start-up’s CEO even offered employees Tesla leases to recruit top talent.
“But Andrew Chamberlain, chief economist at the careers site Glassdoor, believes the expansion will quiet down in 2017 as more companies take stock of how much employees really appreciate the perks. He says Glassdoor’s research compared 54 benefits with employee satisfaction and found that items such as on-site yoga classes or office video games held little value to workers.”
As an alternative, some companies are considering what consultants call “life planning accounts.” These taxable accounts are funded by employers with $500 to $2,500 that workers can use for approved expenses, including closing costs for buying a home and paying for gym memberships.
Glassdoor Identifies Benefits that Employees Like
In its recent survey, Glassdoor found a rising trend of employers investing more in benefits. The survey found that salaries are no longer the focus of the total compensation package.
The survey found four in five workers today would prefer new benefits or perks rather than a pay raise. They are interested in workplace health and wellness programs, retirement plans, free meals, paternity, maternity leave and other benefits.
But the question is what benefits matter most to employees. One way to answer this is look at what benefits offer the biggest “bang for the buck” in terms of boosting employee satisfaction.
To answer this question, Glassdoor examined five key benefits: health insurance, vacation and paid time off, 401(k) plans, employee discounts and maternity and paternity leave. The survey found that three core employer-provided benefits increase employee satisfaction the most. These include health insurance, vacation and paid time off, and 401(k) plans.
“Amid an explosion in the types of benefits available, employers face a daunting challenge deciding which to invest in. “Although exotic benefits such as tuition reimbursements and in-office gyms have grown in popularity in recent years, our analysis of the data suggest three core benefits matter most to today’s workers: health insurance; vacation and paid time off; and 401(k) retirement plans,” Chamberlain and Tian wrote. “These more traditional benefits have a large and statistically significant impact on employee satisfaction, and should not be neglected by employers as they consider less traditional benefits.”
The factor with the single biggest impact on employee satisfaction was the quality of employer-provided health insurance plans,” Dr. Andrew Chamberlain and Gloria Tian wrote in the report.
The benefit with the second biggest impact on worker satisfaction was 401(k) retirement plans. “The impact of 401(k) retirement plans) is much smaller than the impact of health insurance — the impact of 401(k) plans on employee satisfaction with benefits is just over one-fifth of the size of the impact of health insurance,” Chamberlain and Tian wrote.
The last benefit with a statistically significant impact is vacation and paid time off. The survey found the impact of vacation and paid time off is just 15 percent of the size of the impact of health insurance on worker satisfaction.
By contrast, employee discounts and maternity and paternity leave did not have a statistically significant effect on employee satisfaction with benefits packages. “Although maternity and paternity leave benefits have been growing in popularity in recent years, they may not register as a meaningful driver of employee satisfaction simply because they are not utilized by a large enough share of the workforce in most companies to affect average satisfaction in our data,” Chamberlain and Tian wrote.
As an additional step in its research, Glassdoor investigated whether the presence of certain keywords in the text of employee benefits reviews had any correlation with satisfaction with overall benefits packages. “Of the five keywords we examined, only one phrase had a statistically significant impact on employee satisfaction with benefits: ‘Great benefits’ or ‘good benefits,’” Chamberlain and Tian wrote.
The takeaway? Compare your health, retirement and vacation policies to your competitors’ first. If these aren’t competitive, your recruiting and retention efforts could fall behind. Then, if you are still not meeting your benefit plans’ goals, consider adding other programs. For assistance in analyzing and benchmarking your employees benefits, please contact us.