Employers need to offer "creative and exciting benefits packages to recruit new employees and retain existing workers," said Jeanne J. Sutton, a financial benefits advisor at Bowling Green, Ky.-based consultancy Strategic Retirement Partners, which has clients nationwide.
Speaking at the SHRM Talent Conference & Expo 2022 in Denver on April 12, she encouraged employers to "spice up your benefits package and provide a truly unique recruiting tool" or lose out in the competition for talent.
In addition to more pay, prospective and current employees are looking for benefits beyond standard health insurance and retirement plans. "They're paying attention to the bells and whistles" that differentiate one employer's offerings from another, Sutton advised.
Think outside the box about "new and creative benefit ideas that your employees actually want," she said, and ask them what benefits appeal to them if you haven't already done so. At the same time, she noted, "small tweaks can be made to existing packages that go a long way."
Same Old Isn't Good Enough
"The unemployment rate only references those who are looking for jobs," Sutton said. "Our job is to convince those who have stopped looking to come back to work." This includes recent retirees and parents who have decided to remain at home to care for young children.
Today, there are about 4 million more job openings than people looking for jobs. "You and your company are the ones being interviewed" by job candidates, she said. "They're trying to decide if your company is a good fit. We have to convince people to join our company, then to be happy about it because we have to keep them."
The competition is particularly intense for hourly workers, Sutton noted, as many businesses are competing with fast-food chains for sub-$20-an-hour employees. Better benefits have convinced hourly workers who once would have preferred office jobs to work retail, she said. For example, "women working for Starbucks get in vitro fertilization treatments fully covered, at no cost to the employee. [Starbucks is] beating everybody to the punch, and they're coming out swinging."
[SHRM members-only HR Q&A: What benefits can employers offer to improve employee retention?]
New Benefits and Enhancements
Sutton touched on numerous areas where employers can introduce new benefits or enhance current offerings without breaking their benefits budgets. These include the following:
Allow flexible work
Employees who worked remotely for the past two years often aren't willing to go back onsite with standard workdays and workweeks. They're looking for flexible schedules, as well as the ability to continue working remotely or in a hybrid onsite/offsite capacity. "Tell the C-suite that flexibility matters, that this is what people want," Sutton advised.
If allowing full or partial remote work—or broad flexibility around work hours—isn't in the cards, she suggested considering "agile work-from-home Fridays or maybe summer Fridays at home as options."
Offer immediate access to earned pay
Hourly workers increasingly expect payday to be every day they work, Sutton said. As inflation strains budgets for basics such as food and gas, the big retail and fast-food chains with whom you're competing for talent "are offering pay at the end of the work shift, as soon as workers clock out, on debit cards or sent to bank accounts."
Spiff up the 401(k)
Allow new employers to start contributing to the 401(k) right away, even if you require one year's tenure to vest in any matching contribution. Automatically enroll employees in the plan.
Also, Sutton said, "we're starting to see matching contributions increase and be given dollar for dollar" instead of 50 cents on every dollar the employee contributes, up to the match cap. Reward tenure with bonus contributions to 401(k) accounts, Sutton suggested. Then, consider setting up emergency savings accounts funded by payroll deductions, possibly with employer matching contributions.
Consider allowing employees to roll over vested but unused paid time off (PTO) year to year, or to cash out untaken PTO. Alternatively, let them redirect the value of unused PTO days into 401(k) contributions or student loan payments. Consider combining vacation and sick leave into a PTO bank, "which can be more flexible, and not require a doctor's note because your child has an orthodontist appointment," she suggested.
Permit transitional retirements
Allowing older employees to transition to a partial schedule, such as 30 hours per week, is a way to keep these workers on board or to bring back retirees. Many of these workers "will accept a pay cut as long as you keep them on health insurance," especially prior to age 65 and Medicare eligibility, Sutton said.
Support parents with young children
To lure back to work parents with young children, consider reimbursing child care at least partially, offering subsidies for summer camps and complimentary breast milk shipping, for example. A lesser-known perk is paying for a travel companion so a new parent traveling for business can take their child with them, allowing the companion to care for the child while the parent is working.
Assist with student debt
Employers can set up payroll deductions for an employee's student loan payments using a third-party administrator to transmit payments to loan providers "for around a $2,500 implementation fee," Sutton said. Employers can then match employees' student loan payments, and those matching contributions are not taxable up to $5,250 per year.
Alternatively, employers can make 401(k) matching contributions based on an employee's payroll-deducted student loan payments.
If you set up an employer-sponsored 529 plan to pay for college, this, too, can be done with an employer match, Sutton said, and "employees can then use their 529 plan savings to pay off their spouse's student loans."
Institute four-day workweeks
Sutton is an advocate of four-day workweeks. "Studies show that they don't reduce productivity" when effectively put in place and communicated with staff, she said, because much wasted time during the standard workweek gets eliminated "as part of the deal with workers—Fridays off for full productivity on the other four days."
Four-day workweeks, once considered an extremely fringe benefit, were identified as an important consideration by nearly a third of 1,200 workers in a March 2022 survey.
Whether the four days remain standard eight-hour workdays or have two hours added to make up for the extra day off depends on "what works best in your organization," Sutton noted.
Let Employees Choose
While some of these ideas involve increased funding, others can be implemented by redesigning the benefits package using already-budgeted dollars, Sutton said. "Focus on benefits that are actually used, or add new benefits identified as high-value in employee surveys and focus groups," she advised. "Let employees choose which benefits add the most value for them."
Related SHRM Articles:
Inflation Continues to Surge, Affecting Wage and Benefits Planning, SHRM Online, March 2022
Keeping Benefits Competitive Requires Vigilance—and a Strategy, SHRM Online, March 2022