Employee benefits: which perks work?
Dangling flashy perks, such as free food and lease cars, come second fiddle to the more meaningful employee benefits of work-life balance and flexible working arrangements, a recent SEEK study has revealed.
Technology companies are known for outdoing each other with zany lurks and perks to help them lure the best and brightest workers.
Google, the most quoted example, provides free food, a free commuter bus service, 24-hour tech support for personal use, subsidies for hybrid cars and a generous death benefit, paying 50% of an employee’s salary for 10 years to their surviving spouse.
But there’s evidence that, while these types of benefits may be welcome, flexibility and work-life balance are far more important to prospective candidates and existing employees.
In a study by SEEK, which interviews over 4000 New Zealand workers every year, 35% cited work-life balance as the most important factor when choosing a company to work for. Only 2% were attracted by perks.
So what does work-life balance mean to those surveyed? It’s all about flexible working hours, leaving work on time and working from home, according to the survey.
There’s no benefit in bad management
Let’s face it, says Zrinka Lovrencic, managing director of Great Place to Work Australia, a perk has a maximum impact of about three months “and even that’s over-stretching it”.
“Nothing is going to make it better if you’re really unhappy with your manager and you don’t feel you have any direction in your job. Perks are a very short-term solution,” she says.
Lovrencic has seen a big change in benefits offerings in the past 10 years, ever since “Google raised the bar in the ‘cool’ stakes”.
“A lot of companies implemented perks that they probably couldn’t afford in the long run and didn’t quite fit the demographic of their employees.”
She acknowledges that structuring benefits programs to suit everyone is a complex task. “That’s one of the reasons why companies go wrong with benefits and perks: because there’s no solution that fits everyone. They all have individual needs, wants and demands and it’s really hard to find things that will be suitable for everyone."
Understanding your workforce demographics and providing a menu of benefits is the solution, says Garry Adams, partner and market business leader at Mercer.
What benefits truly matter?
“Providing choice is an absolutely positive approach. People value the opportunity to choose and customise their benefits,” says Adams.
“We’ve also found that it’s useful to involve a cross-section of employees in discussions, focus groups and surveys on what they value.”
The media and entertainment sector shares some of the characteristics of the tech sector, with a youngish workforce, and strong competition for the best and brightest.
At Nova Entertainment, which has radio stations in five capital cities, a wide range of the usual perks is available to its predominantly younger workers, says HR consultant, Chantal Madi, including discounts on insurance, travel and gym memberships, and lots of fun celebrations to celebrate ratings wins.
But the company’s latest and most important offerings to encourage retention centre on leave, flexibility and wellness.
Two that we’re really proud of are loyalty leave and anniversary leave,” says Madi.
Nova Entertainment employees receive an extra day of paid leave for every year of service and after three years, there’s an extra five days of paid leave on offer.
The company is also promoting health and wellbeing in a new program that includes classes in yoga, fitness and nutrition, as well as health testing.
“We realise that our staff will give us the most and love coming to work at Nova every day if we’re able to make sure they’re healthy and their stress is minimised to ensure they have work-life balance and their mental health is as strong as possible,” Madi says.
Getting creative with benefits
The war for talent among advertising and media agencies is extreme. There’s a constant shortage because the industry keeps growing at around 5–10% every year, says OMD Australia’s people development director, Martin Cowie.
“The industry has a greater turnover than most. Creative people tend to move on if you’re not supplying what they require,” says Cowie.
In response, the industry was “throwing stuff at people – rewards, another half-day off, free beer, parties”, he says.
“We do our fair share of that but we realised that, while people want to have fun and earn reasonable money, they really want career development.
“We have pages of perks; they’re great and well appreciated. But I aim to provide a real focus on ‘being the best you can be’ by having a great career while you’re at OMD.
“If we can increase the tenure from three years to four years that’s good for the business, clients and for employees.”
Cowie ditched the hated annual performance reviews and replaced them with career development plans, introduced a comprehensive program of training and development, an annual careers week and a program of inspirational speakers.
Is it all working? Cowie points to OMD’s turnover rate of 20%, compared with the industry average of 34%, as proof that they’re on the right track.
It’s also proof that there’s more to attraction and retention – it’s almost a “revolution” in the approach to perks, says Lovrencic.
“People want to know that they’re part of a bigger picture and are contributing to something greater than clocking in and clocking out. It’s almost been seen as the revolution of the perks, because we’ve finally come to realise that you can’t pay people enough to stay at your company and to love their job. It’s just not going to happen.”