Imagine getting an offer for your dream job and then finding out that the company has limited health-care benefits and vacation time. Would you take the job anyway?
And how would you feel about a similar job with the same salary at a company that offered free dry-cleaning, an on-site gym and even free food?
American companies are increasingly providing employees with more benefits and perks to both lure and retain the best talent.
Over the last 12 months, 34% of the organizations reported that they increased their benefits to employees, up from 32% the previous year, according to a survey published this month by the Society for Human Resource Management. (In 2018, employers increased health-related benefits by 29% and wellness-related benefits by 20% from 2017.)
Nearly one-quarter of employees said they would like to see more on-site lifestyle amenities like gyms and dry-cleaning at their workplaces.“It’s important to think about benefits and perks as another kind of compensation when you’re looking for a job,” said Alison Sullivan, a career trends expert at Glassdoor.
In fact, 66% of workers identified sizable benefits and perks packages as the No. 1 determining factor when they consider job offers, according to a separate study of 768 U.S. workers, which was conducted by employment and recruitment agency Randstad RAND, +0.26%
Many employees want Facebook-style perksStill, job hunters look at the perks offered by cash-rich companies like Google GOOG, +0.58% which offers cooking classes, and Facebook FB, +0.82% which has a bike repair shop at its Menlo Park, Calif. campus, and they want them too.
Nearly one-quarter (23%) of employees told the Randstad survey that they would like to see more on-site lifestyle amenities like gyms and dry-cleaning at their workplaces.
But job hunters shouldn’t be dazzled by on-site facilities like a pool and cool hangout areas with sofas and snacks. Employees are smart about the perks, Sullivan said. “People want free health care and paid time off,” she said.
The top three most valued benefits for job seekers are health insurance, paid vacation time and offering 401(k) retirement plans, according to a 2016 Glassdoor analysis of more than 1,200 U.S. employees. Employers are also implementing professional and career development benefits such as funding professional memberships, formal mentoring programs and paid parental leave.
Still, this workplace perk culture has spread far beyond Silicon Valley. At Money.co.uk, a U.K.-based financial-comparison website with offices in London and Gloucestershire, flexible work arrangements, retirement plans and health care are just the tip the benefits-and-perks iceberg.
At lunch, employees are invited to play basketball or football with their boss, managing director Chris Morling. Workers are also encouraged to take a break from working and go for a run outside, take a dip in the on-site pool, or challenge their coworkers to a game of xBox MSFT, +1.11% or PlayStation SNE, -0.96% or a round of foosball or billiards in the office’s arcade room.
Whether it’s free yoga or meditation classes or discounts on movie tickets or restaurants, not employees take advantage of such perks. Only 48% of employees know all of the perks their employers offer, according to the Randstad survey. Companies are not adequately communicating this to employees, said Jim Link, chief human resource officer at Randstad.
It pays to keep employees happy. Voluntary turnover in the U.S. costs employers $536 billion a year each year, according to the Bureau of Labor Statistics. That amounts to approximately $15,000 per employee, or more depending on their annual salary and skills, according to a 2017 retention report published by the Work Institute, a human resource consulting company in Franklin, Tenn.
And there are significant costs associated with replacing employees. It can cost a company up to $4,129 per new hire, given that it can take an average of 42 days, according to a separate 2016 report published by SHRM.
What’s more, indirect costs such as lost business, damage to company reputation, decreased productivity and lost sense of morale among remaining workers can potentially exceed the direct costs given their spillover effects.
Given that 9% of workers in the U.S. reported leaving their previous jobs due to their dissatisfaction with employee benefits and perks, according to the Work Institute report, Link said offering employees free dry cleaning may not be as silly as it sounds.
