Lifestyle Benefits for Competitive Small Businesses
Lifestyle benefits can help employers improve recruiting, retention, and employee engagement — and help workers feel more satisfied with their jobs.
Employees are more vocal these days about how their jobs can support their personal lives. Young job candidates in particular want to know what benefits organizations are offering — beyond healthcare and disability insurance — before accepting a job offer. They want benefits that help improve their quality of life. This has prompted employers to add lifestyle benefits, also known as voluntary benefits, and perquisites (perks) to their traditional offerings.
College tuition assistance and free coffee and snacks have been lifestyle benefits and perks in the workplace for decades. But the expansion of these offerings is changing the benefits landscape. In fact, benefits specialists are calling lifestyle offerings the future of employee benefits. And studies show that businesses agree. A 2019 Willis Towers Watson survey found that employers are broadening their benefits offerings with a focus on workers’ wellbeing and job satisfaction.
Lifestyle benefits are often effective recruiting, retention, and engagement tools for employers and job satisfaction boosters for workers. In a 2018 Glassdoor survey, 63% of workers said that, next to money, benefits are what they’re looking for most in a job. And 92% of workers in a survey by the Society for Human Resource Management said that benefits are key to their overall satisfaction.
Small and medium-sized businesses can gain the edge in competing for talent and satisfying employees by offering in-demand, but cost-effective lifestyle benefits and perks.
Leading lifestyle benefits
Concierge services, onsite acupuncture, and catered meals are some luxury lifestyle benefits and perks that corporate workplaces are offering. But while investing in high-end benefits and perks for employees’ wellbeing may seem like a worthwhile expenditure, a survey by the marketing firm Fractl found that, after healthcare coverage, the benefits workers value most are:
- Flexible work schedules
- Extra vacation time
- Work-from-home options
These no- to low-cost benefits can amount to significant savings for SMBs. According to the United States Bureau of Labor Statistics (BLS), benefits account for as much as 30% of the cost of workers’ total compensation (TC). This hefty percentage of TC makes flexible work hours and WFH options wise choices for SBMs looking to expand their lifestyle benefits while controlling overhead and other employment costs.
Other lifestyle benefits include:
- Student loan debt assistance
- Free childcare
- Paid parental leave
- Gym membership/free fitness classes
- Financial wellness
- Identity theft insurance
- Stress management
- Pet insurance
- Legal services
- Emergency assistance
Lifestyle spending accounts (LSAs) are relatively new benefits that help employees with health and wellness expenses.
Lifestyle spending accounts (LSAs) are relatively new benefits that help employees with health and wellness expenses. LSAs are similar in function to health savings accounts (HSAs), flexible spending accounts (FSAs), and health reimbursement arrangements (HRAs). However, they are funded entirely by employers and are considered taxable income for employees.
Workforce challenges driving benefit choices
Employment experts attribute the rising demand for lifestyle benefits to socio-economic conditions impacting the workforce. For instance, the high cost of childcare is driving the demand for low- or no-cost services for working parents with young children.
Young college graduates are entering the workplace with thousands of dollars in student loan debt — the Annie E. Casey Foundation puts the total debt at $1.5 trillion. Many now are looking to employers for help with tackling the student debt crisis, and it has led to employer-sponsored loan repayment or reduction plans.
The U.S. remains one of the few industrialized countries without a federal paid leave policy, yet, paid family leave topped the list of most valued benefits for American workers in a 2018 poll by Unum, a benefits solution firm. Recognizing that unpaid leave can be a financial burden on workers, a growing number of companies and states now have paid personal, family and parental leave policies.
The Financial Health Network reported in a 2017 poll that 1 in 3 workers found money worries to be a distraction at work, leading to productivity losses and increases in absenteeism, turnover, and health claims. To address these problems, businesses have stepped in with financial wellness and literacy programs, as well as emotional wellbeing programs to reduce workers’ stress.
Considerations for SMBs
Although benefits can give SMBs an edge in the competition for talent, most still struggle with selecting the right benefits, according to Guardian Life Insurance. The company identified 3 trends that are impacting SMBs today:
- Wellbeing focused on financial wellness, work-life compatibility, and physical health.
- Benefits technology including digitizing benefits administration; third-party systems integration and outsourcing; and artificial intelligence and automation for benefits engagement, communication and enrollment.
- Compliance with state and federal benefits mandates, such as the Affordable Care Act’s tax reporting requirement, state paid leave laws, and Family Medical Leave Act and Americans with Disabilities Act and Amendments.
Competitive benefits for SMBs
Large corporations on big budgets may be able to attract talent with luxury lifestyle benefits. However, SMBs may need to consider how they spend their dollars more carefully. For that reason, CareerBuilder came up with 9 low-cost benefits that SMBs can offer to be competitive.
Large corporations on big budgets may be able to attract talent with luxury lifestyle benefits. However, SMBs may need to consider how they spend their dollars more carefully.
Wellness stipend
Employees can use stipends for health-related activities, such as healthy cooking classes, gym memberships, or the purchase of fitness equipment like treadmills or weight lifts.
Game and meditation rooms
Separate areas for playing computer games, practicing yoga or engaging in recreational activities can help workers relax, reduce stress and participate in team-building exercises.
Flex time
Allowing employees more flexibility in their work schedules costs nothing while helping them find balance between work and personal responsibilities. Flex time is credited with boosting productivity, retention and overall job satisfaction.
Corporate discounts
SMBs can offer employees discounts on a range of products and services, such as:
- Travel bookings
- Events tickets
- Apparel
- Wireless phone services
- Electronics
- Automobiles
Some corporate discount vendors offer gift items for employee rewards and recognition programs. Vendors specializing in corporate discounts include Perks at Work, PerkSpot, Abenity, Fond, Corestream, Entertainment Benefits Group (EBG), Next Jump and Corporate Offers.
Casual dress code
A 2015 CareerBuilder survey found that the ability to wear jeans at work ranked among employees’ top 5 favorite perks. Casual dress is now the norm in workplace attire and often associated with bolstering productivity, creativity, and morale.
Free food
Like casual dress in the CareerBuilder survey, free snacks ranked high among workers’ top perks. The survey linked healthy foods, like fresh fruits and vegetables, to higher recruitment, retention, productivity and employee satisfaction.
Pet-friendly perks
Allowing pets in the office can be a recruiting and retention advantage and stress-reliever for workers. However, before adopting this perk, SMBs must consider the health of workers with pet allergies and how non-pet owners feel about pets in the workplace.
Unlimited vacation
Offering employees as much vacation time as they want may seem like a vacation-scheduling nightmare, but according to CareerBuilder, unlimited vacation can be effective in attracting and retaining top talent and instilling in employees the notion that their employer trusts their ability to manage work and time off.
Volunteering days off
Ninety percent of Millennials in a 2019 Olivet Nazarene University study said they wanted their work to make a difference in the world. In fact, other studies show that workers select employers that support causes. SMBs can allow workers time off to volunteer their services, and pay hourly workers for the time they devote to philanthropic activities.
