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Aligning Employee Benefits with Worker Desires

What workers seek in terms of benefits and compensation is not always the same as what employers think they want.

​When Jamal Arnold graduated from Western Oregon University with a bachelor's degree in business administration and management, he had more than $50,000 in student loan debt. After he started working at Chegg, he learned about the company's student loan repayment benefit. "It's the best thing ever," says Arnold, a customer experience lead at the education technology company. "Originally, I was only able to pay off interest, but with the student loan repayment benefit, that $50,000 began to quickly shrink. ... It's been amazing, life-changing. My fiancée and I are thinking about buying a house now. We see a real future for ourselves."

The company has two student loan payment programs. The first offers $1,000 per year to any U.S. employee with student loans. Employees qualify for the benefit immediately upon hire, and there is no cap on payouts. The second offers annual benefits of $5,000 for employees below the director level and $3,000 for directors and VPs who have worked at Chegg for two years.

"Chegg has been helping employees pay off their student loans since 2015, and by further expanding the program two years ago, 25 percent of the participants have paid off their loans," says Debra Thompson, chief people officer at the Santa Clara, Calif.-based company. Student loan repayment assistance can be tied to years of service, which makes it a good retention tool as well. Employees like Arnold say the benefit is life-altering, yet only 8 percent of employers offer it, according to the 2020 edition of the Society for Human Resource Management's (SHRM's) Employee Benefits survey report.

To retain and attract workers who are in short supply in many places, companies must customize benefits and compensation packages to meet employees' needs—and those needs vary based on their income, age and life stage. Still, at least three concerns run across all demographics: physical health, mental health and work/life balance. The degree to which employers are meeting those needs, however, varies widely.

What employees want and what employers think they want in terms of benefits and compensation are often misaligned. In fact, many employers are out of touch with which benefits employees value most.

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Catering Benefits to Diverse Employee Needs

"As an employer, you must read the room," advises Christina Balint, corporate HR manager at 287-employee Universal Metal Products Inc., a custom metal-forming products manufacturer in Wickliffe, Ohio.

According to Mercer's 2021 Inside Employees' Minds study of 2,000 U.S.-based employees, front-line and low-wage workers are resigning at rates higher than in the past—in part to pursue higher pay because salaries have been stagnant at most companies while inflation rises. Compensation tends to be less malleable than benefits packages, but companies still need to conduct regular benchmarking. Moreover, compensation must be competitive not only within one's industry but also outside it, especially for entry-level employees. If a day care worker can get $2-$3 an hour more by working at a fast-food establishment down the street, why would she stay?

Companies also need to understand how their benefits compare. "Review your benefits offerings," says Heather Salerno, senior VP of marketing at programmatic recruitment advertising company Appcast, which has 300 employees and is headquartered in Lebanon, N.H. "Are they in line with trends in the labor market? How do they stack up to what your competitors for talent are offering? You may be offering a lot of benefits, but they may not be the right benefits. Or maybe your benefits offerings are not competitive for the roles or locations where you're hiring."  

Balint notes, "This is the tightest labor market in the country's history. Large manufacturers are offering health care and 401(k) on day one, large signing bonuses and above-market rates, and they're still coming up short."

This theme reverberates around the globe, according to Veronique Lemaire, head of HRP consultancy alliances at TMF Group, an international business administration company based in Amsterdam. "Benefits packages are becoming a true differentiating factor in today's competitive [labor] market," she says. "Employers need to acknowledge various generations are meeting in the workplace and not all employees have the same needs. Steer away from a one-size-fits-all benefits system to move toward an elective scheme where employees can select benefits that match their own situations and lifestyles best."

Ken Enloe, director of HR for Huber and Associates, a family-owned IT firm in Jefferson City, Mo., understands the situation well. "Our company is a good example," he says. "We're a little over 100 employees, and we still have a wide range of ages from people in their mid-60s to young adults right out of college. It's challenging to put together a package that's attractive and resonates with someone who is single without dependents and those who are approaching retirement."

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Elevating Employee Well-being Through Health Benefits

It's no surprise that physical health benefits are rated as the top benefits among nearly all employees across a wide swath of demographics. In fact, 88 percent of job seekers give "some consideration" or "heavy consideration" to better health, dental and vision insurance benefits when choosing between a high-paying job and a lower-paying job with better benefits, according to a Fractl survey of 2,000 workers.

To stand out, employers need to offer more than just the basics. "Most employers have figured out how to take care of employees' basic health needs, but medical, dental and vision are no longer nice-to-haves that keep employees happy; they're table stakes," Thompson says.

The SHRM 2020 Employee Benefits survey report demonstrates a significant increase in employers providing supplemental health benefits while holding overall health benefits steady. For example, employers that provide critical-illness insurance increased from 31 percent in 2016 to 48 percent in 2020, and those that offer health savings accounts increased from 50 percent in 2016 to 59 percent in 2020. One of the top-five expanded employee benefits in 2021 was telemedicine services.

"Health benefits have been—and continue to be—the most important category of benefits employers feel they can offer to their employees," says SHRM researcher Derrick Scheetz.

The value of benefits "will depend on where employees are in their lifecycles and where they are located geographically," Lemaire says. For instance, TMF Group operates in a number of countries that have national health insurance, but medical and dental protection is a particularly important benefit in jurisdictions with no social health care systems, she says.

Employers may need to get creative. For instance, Thompson notes, "An additional benefit we provided to some of our employees was the ability to expense air purifiers a few years ago during the particularly bad wildfires in Oregon and California. It meant a lot to our employees. You must constantly look at how you can remain competitive in the market and adapt to the changing environment."

Prioritizing Mental Health: A Core Element of Workplace Benefits

One benefit that both employees and employers seem to agree is important is the need for mental health resources. Isolating pandemic-related measures such as social distancing, videoconferencing, working from home and mask-wearing have had a dramatic impact on workers' mental health. When the touch of a handshake and the sight of an in-person smile are no longer assured, employees can become depressed. One in 4 workers say they're highly or extremely stressed, and workers under 35 ranked mental health as their top concern, according to the Mercer study.

Companies appear to be responding. Twenty-five percent of employers increased their mental health service offerings during the pandemic, according to the SHRM benefits survey. "So many of us felt and continue to feel the toll the pandemic has taken on our mental health," Scheetz says.

Thompson says Chegg provides generous medical benefits, "but over the years we've also added benefits such as meditation from Headspace, addiction treatment from Quit Genius and membership for the medical concierge service OneMedical."

Liz Cannata, vice president of HR at CareerBuilder, a job search platform, advises, "Offer support on mental health. Employers should also encourage employees to take their time off and [should] respect those boundaries so employees get true breaks."

But while increased mental health resources bring employer priorities into alignment with employee priorities, there still appears to be a gap between benefits and employee needs. For instance, 31 percent of employers report improving access to mental health treatment is a priority but 67 percent of employees with a mental illness report it is challenging to access care, according to a December 2020 study by McKinsey & Co., and 71 percent of employers with front-line employees report supporting mental health well but only 27 percent of front-line employees agree.

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Work/Life Balance: Remote vs. In Office

Work/life balance is one of the most important concerns for employees, and that manifests in several ways, including the desire for flexible hours, paid time off and remote work. However, many companies want employees to return to in-person workplaces and schedules—and employees are pushing back. According to the Mercer study, 44 percent of employees want to work remotely full time while only 16 percent of employers plan to continue allowing full-time remote work.

"Right now, the workforce is divided about whether or not to go back to the physical office," Lemaire says. "If your workforce prefers to work from home and this is the only reason they are thinking of leaving, understand what impact working from home has had on their health and wealth and what your motivation as an employer is to get them back in the office."

According to Enloe, "One thing we're struggling with is remote work versus in-office work. We have some employees who want to stay home, and we just bought a new building. Not being tied to coming into an office is something you can offer other than compensation, but you can't get the same camaraderie and collaboration over a Zoom call as you can sitting in the same room across the table. This is going to be our biggest challenge in the coming years."

Enloe explains that his company hasn't determined whether or not the 70 percent of employees who live locally will be back in the office full time or only part of the time under a hybrid model. He adds, "We hope to both maintain our culture and still give people some flexibility."

If companies want to retain their employees, they may need to reconsider the five-day-a-week, 9-to-5, in-office schedule. If employers don't accept the flexibility workers seek, they could lose employees who want to continue to work remotely, the Mercer study suggests.

Enhancing Work-Life Balance Through Generous PTO Policies

Increased paid vacation time and parental leave are high on employees' lists for creating work/life balance. "Aside from health care and retirement benefits, we're going to see an uptick in the demand for more paid time off and paid family leave," Balint says.

The SHRM survey supports this assertion, as an increasing number of organizations are offering parental leave benefits. The percentage of companies that paid for family leave increased from 16 percent in 2016 to 24 percent in 2019 and 31 percent in 2020.

While this is a step in the right direction in terms of what employees are seeking, parental leave is granted for only a finite period of time when a child joins a family. Since most U.S. families have one to two children, according to the U.S. Census Bureau, this benefit is used only once or twice in an employee's lifetime, whereas work/life balance is an ongoing concern. Thus, paid vacation time yields broader retention benefits across a wider demographic.

"Employers can offer unique benefits that support flexibility and work/life balance," Cannata suggests. "Some examples include floating holidays to support inclusion, mental health days and a program around more time off in summer."

At Chegg, Thompson says, "During the past 18 months, we provided our employees with an additional 25 days off when the whole company shut down to enable each of us to really unplug."


Bridging the Benefits Awareness Gap

In some cases, the disconnect isn't between what employers offer and what employees want, but rather it involves a lack of communication about what benefits an employer offers and employees' understanding of those offerings. "Numerous surveys find employees don't know or understand what benefits they already have access to through their employer," Salerno says.

Lemaire stresses the importance of communicating with and educating employees about their benefits. "The value of the benefit may not be clearly understood by the employees," she says.

Related recent research by Appcast highlights the importance of this, Salerno says. "One of the most fundamental things we learned is employers need to increase their communication about benefits, starting with including benefits information in their job postings," she says. "Our research found when job ads included benefits, employers saw a 22 percent higher apply rate than from job ads that did not mention benefits."

Balint says, "A lot has happened in two years. People are rethinking their lives and making changes. This will be a permanent disruption."

Employers need to respond. Enloe describes the goal: "In this competitive environment, it's about establishing yourself as a destination employer, that kind of employer who has a reputation of being a good place to work, the kind of employer whose employees talk to people at church, friends, people at the grocery store about what a good company it is. You can't buy that kind of recruiting."

When in doubt, "ask your employees what is important to them," Thompson recommends. "You may be surprised."

Kathryn Tyler is a freelance writer and former HR generalist and trainer in Wixom, Mich.


Whistleblower Laws Create a Legal Patchwork             

Many older employees between 55 and 65 years of age are ready to stop working, and that's leaving employers in a bind. "The largest generation is retiring at a rapid pace, leaving behind smaller generations that cannot replace the tribal knowledge that left nor fill all the empty positions," says Christina Balint, corporate HR manager at Universal Metal Products Inc. "The pandemic pushed this into another dimension."
How can companies prevent their older workers from calling it quits too soon? Here are some benefits and strategies that might tempt them to stay.

Grant additional paid and/or unpaid vacation time based on seniority. Some employees just want to take more time off. This is especially true for many who live in cold wintertime climates and seek more than a few days in the southern sunshine in February. Four weeks or more of paid (or unpaid) vacation time might keep some older employees in their jobs for a few more years.

Decrease workloads to avoid burnout. Older employees may have decades of institutional experience and knowledge, but there are likely some tasks they would prefer to delegate to colleagues. Mercer's 2021 Inside Employees' Minds study shows 42 percent of older employees feel burned out due to a demanding workload, which is one reason they would consider quitting.

Offer part-time options. Many older employees aren't ready to quit working entirely, but when the choices are working full time or not at all, retirement looks that much more desirable. According to the Mercer study, 27 percent of workers ages 55 to 64 say the reason they would consider leaving their current employer is due to a lack of flexibility and/or requirements to be onsite.

Offer remote-work options. Remote-work options give older workers the flexibility to travel and work from the road or live part time or full time in another state that perhaps is closer to children or grandchildren. —K.T.

Explore Further

SHRM provides advice and resources to help business leaders provide employees with meaningful benefits.

Report: Employees Say Support for Their Well-Being Falls Short
There is a striking disconnect between employees and HR professionals about how supportive employers are of their workers' well-being, according to a global study. But there are steps employers can take to remedy that.

SHRM Employee Benefits Survey
Gain insights from the results of the 2020 edition of the survey, one of the longest-running annual research reports covering trends in employee benefits in the U.S.

Businesses Respond to the Great Resignation by Raising Pay, Improving Benefits
Employers are taking steps to combat the so-called Great Resignation afflicting U.S. organizations by offering higher pay and more competitive benefits, according to research from SHRM. 

SHRM HR Q&A: What Benefits Can employers Offer to Improve Retention?
In times of record employee turnover as workers resign in search of greener pastures, revisiting employee benefits offerings might help retain top talent. 

How to Encourage Employees to Use Mental Health Benefits
Employers can do better when it comes to educating employees about using the mental health resources available to them—a message that is especially important given the increased stress employees are facing today. 

Best Benefits Practices for the Gig Economy
While gig workers have not traditionally been able to partake in employee benefits packages, that's starting to change as employers realize that to attract talented gig workers in a tight labor market, they need to review and potentially revise their benefits options.

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