Melissa Davis, CEO of Elev8 Hire Solutions, explains how offering great benefits can attract top candidates to your company.
My business helps companies grow by finding the right talent. We’ve worked with the majority of Atlanta’s start-ups and fastest growing companies, and one thing I’ve learned is benefits matter. Having a strong benefits offering can be big ammo when fighting for (and retaining) talent, especially in this candidate-driven environment.
With healthcare costs at an all-time high and the shortage in specific skilled labor, health care coverage, along with other benefits such as telecommuting, flex hours, and catchy office perks like free snacks, have become equally important to salaries and should comprise a significant portion of your total compensation package. It is a way to show employees they are valued and appreciated and can also help strengthen company culture.
According to Glassdoor’s Q3 2015 Employment Confidence Survey, nearly four in five (79%) of employees would prefer new or additional benefits over a pay increase. Specifically, more women (82%) than men (76%) prefer benefits or perks to a pay raise. And, younger employees aged 18-34 (89%) and 35-44 (84%) prefer benefits or perks to pay raises when compared to those aged 45-54 (70%) and 55-64 (66%).
These stats tell us the new workforce places a high value on their benefits package, and that business owners should be thinking more strategically about it. I know, because I am one of them. When I founded my company, I knew I needed to offer some form of healthcare coverage, but that was about it. I was guilty of not putting much thought into the needs and desires of future employees and what it might take to keep them happy and productive. I also didn’t consider what it would say about the culture of my organization. What I’ve realized is the benefits you offer are critical to both the growth and retention of talent in your organization.
It is not surprising that prospective employees tend to ask the most questions about benefits. As we help our clients find the right people, I spend countless hours going back and forth getting all the details. How much will it cost me? What do they offer? Is my spouse covered? Do they have a retirement plan? What is their telecommute policy? What schedule flexibility do they offer? Do they have educational reimbursement? … you get the idea.
Based on our experience working with hundreds of companies, here are some key areas to think about when offering benefits, listed in order of importance:
|Healthcare||Best practice is to cover 75% or more of the individual cost.|
|Dental & Vision||Critical and very affordable. I recommend covering at least 50% of each.|
|Retirement – 401K||It is important to at least offer a program they can contribute to, even if you cannot afford to match.|
|Profit Sharing Programs||If relevant, this is a great recruiting tool to secure and retain top talent.|
|Paid Time Off and Vacation Policy||Give a set number of days – 15 days is standard, 20 can set you apart. See below for my thoughts on unlimited vacation policies.|
|Flexible Hours||Allow some flexibility with traffic – have meetings start after 8:30 or 9 am and have important meetings end by 3-3:30 pm.|
|Telecommute Policy||A huge plus if employees can work remotely a few days a week/month.|
|Professional Development & Training||Millennials are all about purpose and learning, make sure you are finding ways to develop your people.|
|Wellness Programs||Gym memberships, onsite classes and education, etc.|
|Flexible Spending Accounts (FSA)||A great perk that candidates like! I recommend allowing employees to roll over some funds (minimum $500) to the next year so it is not a use-it-or-lose-it situation.|
|Workplace Perks||Such as free lunch, healthy snacks, and plenty of coffee! (Make sure it is good coffee)|
|Tuition Reimbursement||If you cannot support full tuition, offer to split the cost of ongoing course work.|
|Raises and Performance Bonuses||Make sure it is clear and in writing.|
|Short-Term/Long-Term Disability||Duration of benefits varies by policy, but six months is typical.|
|Life Insurance||Relatively inexpensive to provide. Employee needs vary, so consider offering options – lump sum, multiple of salary or the option to purchase additional coverage through a group plan.|
When building a strong benefits package, the key is thinking about your current culture and the demographic of your employees and how they might value each of these areas. For example, if you employ all millennials they will likely care more about decent healthcare, flexibility, and workplace perks like free lunch, than retirement programs and life insurance.
Ask yourself: Do my employees care less about things like workplace perks and tuition reimbursement and more about telecommute and flexibility? And then go ask your employees! Employee surveys are a fast and easy way to help you align your offerings.
Once you’ve built the right package of offerings, the next step is effectively communicating it with your current and prospective employees. Consider how you will weave it into the vein of your organization’s values and mission. Again, benefits help show your employees they are valued and important and that aligns well with core values like making your company a great place to work.
Use benefits to help attract and keep the best people
In summary, attracting and retaining top talent is not solely a salary/compensation play and benefits certainly play a huge factor in the decision making process for today’s workforce. Bulk up your benefits and communicate it effectively to help improve acceptance and retention rates. It works!
Unlimited Vacation – A surprising benefit that could be hurting you
The shine on unlimited vacation policies is wearing off for many candidates. On the surface, these programs sound great – who wouldn’t want unlimited vacation? However, we’ve heard from lots of candidates that they feel uncertain about how much time is really acceptable to take off. As a result, some end up taking less time off than they used to, because they don’t want to be perceived as lazy or taking advantage of the policy. It also removes some of the typical forcing functions in standard programs that motivate people to take time off – like expiring vacation time, or maxing out vacation accruals.
My advice – have a set amount of PTO that they can take, but allow them to take it whenever they want. Then decide if you truly want to track it or not. Studies show that employees (and business owners) are often more productive and engaged when they take time off.
Learn how Elev8 uses Zenefits to strengthen its own benefits here: