Employee benefits are always greener on the other side of the corporate fence. Netflix offers unlimited parental leave during the first year after a child’s birth or adoption. General Electric’s new “permissive approach” removes limits on paid time off. Google creates a work environment that resembles an adult daycare at first glance, complete with snacks and nap pods.
The merits of job perks are debatable, but one thing is certain: workers want them, even more than the idea of larger paychecks. According to a recent survey from Glassdoor, four in five employees (79%) prefer benefits or perks more than a pay increase. Women favor benefits or perks slightly more than men, while younger employees favor them more than older workers. In fact, 89% of employees aged 18-34 favor benefits or perks, compared to 70% of employees aged 45-54 and 66% of employees aged 55-64.
The following benefits/perks are valued more than pay raises:
- Health care insurance (e.g., medical, dental): 40%
- Vacation/Paid time off: 37%
- Performance bonus: 35%
- Paid sick days: 32%
- 401(k) plan, retirement plan and/or pension: 31%
- Flexible schedule (e.g., work from home): 30%
- Office perks (e.g., free lunch, casual dress): 19%
- Employee development programs (e.g., on-the-job training, professional development): 19%
- Tuition reimbursement: 18%
- Employee discounts: 17%
- Gym membership or wellness programs: 16%
- Stock, stock options and/or equity: 16%
- Paid parental leave (e.g., maternity leave, adoption assistance): 13%
- Childcare assistance (e.g., on-site childcare, financial assistance): 13%
- Commuter assistance (e.g., company shuttle, commuter checks): 9%
- Diversity program: 3%
“As the U.S. economy continues to expand and job market confidence continues to rise, there is no doubt it is a job seeker’s market. This is a clear signal to employers that in order to compete in today’s labor market, it’s not just about salary and compensation, employers should be communicating clearly about non-traditional compensation. Recruiters should take note that touting the benefits and perks offered can help win talent of different demographics, industries and occupations,” said Rusty Rueff, Glassdoor career and workplace expert.
Benefits and perks are often more tax-friendly than pay increases. For example, extra vacation days and healthcare coverage are not usually taxable, but a pay bump is subject to the usual treatment from Uncle Sam. Furthermore, in today’s job market, workers may have an easier time receiving benefits and perks in lieu of pay increases as wages remain stagnant. The latest report from the Labor Department reveals the average hourly earnings for employees declined slightly month-over-month in September, and have only increased 2.2% over the past year.
Is there a downside to more employee benefits and perks? Unintended consequences have already been found with lenient vacation policies. Crowd-funding site Kickstarter recently cancelled its unlimited vacation policy, partly because employees didn’t know how much time off was acceptable and were hesitant about using vacation time. This can lead to burnout and loss of productivity. Tribune Publishing also rescinded its unlimited vacation policy after hearing feedback from employees.