Today’s companies want to set themselves apart, not only in the products and services they offer, but also in how they support their employees.
That’s partly because employees expect more than a good salary with health care benefits. With the advent of sites like Glassdoor, which allow prospects to peruse salary ranges for their positions, employees have more information than ever before on what they should receive for compensation. Employers, too, have adjusted their compensation packages based on market trends.
If salaries are relatively similar from company to company, then what makes an employee choose one over the other? Employees are looking for room to grow and meaningful work. They want benefits and perks that are personalized to who they are and what they need.
In the past several years, employers have stepped up their game, offering perks like student loan assistance, fitness stipends, and transportation support. Although these perks are attractive and generous, they’re issued in a blanketed fashion to a large group of employees. While some may take advantage of student loan assistance, others may have already paid off their loans. As a result, they don’t reap the benefits of the perk.
It’s time to put employees in the driver’s seat so they can pick the perks they’ll benefit from most. Today, I’m sharing how to rethink employee perks so you can implement a program that your team members will love.
Shifting Away From a Big Brother Model
Most employers implement perks programs by choosing an individual perk, such as dry cleaning or gym reimbursement, and rolling it out to employees. Although the HR team is making educated guesses on what employees might use, they sometimes see a lack of utilization.
Programs like student loan forgiveness are amazing, but if you have a 56 year old in your office whose loans are long paid off, they’re not going to take advantage of this perk and will miss out on the benefit associated.
In my view, this is a paternalistic way of looking at perks. Employees should be able to choose what they want without feeling like their employer is “Big Brother.” If an employer wants to implement a health-related perk, then they need to give employees the freedom to define what “health” means to them.
For example, an employer might offer “gym perks,” but if an employee has a gym in their apartment building, they won’t use that perk. But they might want a really great pair of walking shoes because they walk to work every day. As an employer, you want to give employees the ability to choose the walking shoes.
Setting a Budget And Working Backwards
When employers ask me how to build out a perks program, I always tell them to start with their overall budget and then work backwards.
For example, if they have a budget of $100,000 per year to spend on perks, they should divide that by the number of employees, and then figure out what they want to spend on an annual basis. In a company with 100 employees, the employer will find that they have roughly $83 to spend on employee perks each month. This amount could cover a massage, a monthly gym membership, or a new pair of walking shoes.
Prioritizing Self Care, Not Cash Outs
Once you set a budget, you may consider allowing employees to cash out their perks. However, if you allow employees to cash out, they begin to see perks as part of their overall compensation package.
Cash pay outs don’t work. Employees don’t necessarily notice the extra cash in their bank account and it begins to feel like just part of their compensation, rather than a perk or benefit.
These perks should encourage self-care and be true “extras” for employees. For example, if an employee has money allocated towards health and wellness and wants a massage, they can do so without feeling pressured to put that money towards savings, childcare, or another area of their monthly budget.
Using Data to Make Better Decisions
Traditional perks programs function as add-ons. As a result, it’s impossible for companies to see what employees actually use. For example, if lunch is brought in every day, who’s taking advantage? Who’s ignoring the perk and going out or bringing their own lunch from home?
Employers should consider personalized programs that allow them to see who is taking advantage of what. Rather than drill into the exact way employees use their perks, employers should look to larger trends. Are health and wellness perks used more than financial planning perks? Understanding what’s getting used can help you create better programming for employees.
Implementing a Perks Program That Employees Love
A perks program won’t be successful unless you make it easy for employees to use. It has to be personalized, seamless, and ultimately improve their lives. As an employer, you have the power to put employees in the driver’s seat of their perks. And, with robust software to support the program, you’ll be able to use utilization data to make adjustments as you go along.
Amy Spurling is the Co-Founder and CEO of COMPT, which gives companies the ability to personalize their perks programs. She is a seasoned executive with over 15 years experience in leadership roles at venture-backed companies ranging from early start-up phase through high growth and ultimately exit. Over her career, she has closed twelve rounds of debt and equity financing from strategics, insiders, venture firms and institutional sources totaling more than $200M, and managed two acquisitions to close with values ranging from 10-30x revenue.