3. Benefits of employee perks
1. Perks make employees more productive, and happier.
If the amount of press coverage company perks get is any indication of their impact within organizations, then they’re transformative.
A quick Google search for company perks will result in articles covering the “best” ones, unique, unusual, for working parents in 2019, and more.
While there’s isn’t much research strictly tied to company perks and their impact on businesses, ask any recruiter what their conversations with potential employees look like, and they’ll talk about the importance of offering perks.
If you take a step back. You’ll see that it’s not the perks that matter; it’s what they signify. It signifies a company’s willingness and desire to support their employees and their goals.
Sure employees want free coffee, pet insurance, and in-office showers with towel service. However, what employees really want is to have better, more productive and balanced lives, which lead to greater happiness.
Employee happiness is excellent for an organization’s bottom line. Studies have shown that when employees are happy, they’re 20% more productive, and for public companies, it can lead to an increased stock price.
“Clients do not come first. Employees come first. If you take care of your employees, they will take care of the clients.” — Richard Branson
2. Perks help attract, engage, and retain superstar talent.
We’re clearly in a war for talent. The unemployment rate is at an all-time low, and the gap between the skilled labor necessary to complete a job and labor available is rapidly increasing. These two factors are driving companies to do anything and everything they can to attract, engage, and retain top employees, and offering company perks is a standard way employers are accomplishing their hiring and retention goals.
3. Perks are a method to attracting more top talent
Hiring the right people for the job is challenging. In fact, 76% of hiring decision makers say attracting quality candidates is their #1 challenge.
Why is there such significant emphasis on quality talent? Well, Mckinsey found that superior talent is up to eight times more productive.
Here’s what their recent researched uncovered in terms of employee productivity:
“A recent study of more than 600,000 researchers, entertainers, politicians, and athletes found that high performers are 400 percent more productive than average ones. Studies of businesses not only show similar results but also reveal that the gap rises with a job’s complexity. In highly complex occupations—the information- and interaction-intensive work of managers, software developers, and the like—high performers are an astounding 800 percent more productive.”
4. Company perks are not the only ingredient in employee engagement, but they help.
Today, salary ranges are transparent. It’s easy for any employee to pull up Glassdoor and have an idea of what they’re worth, and how much they can expect an employer to pay them. This transparency in a tight labor marketing leads employees to look to other elements of the organization to know if they’re the right career home for them for the foreseeable future.
Insightful research from Adam Grant states that employees only care about three things: career, community, and cause. These three directly related to an employee’s ability to grow in their career, to feel like they belong and are respected, and are working on a mission or cause they believe in.
Patrick Lencioni’s book, The Truth About Employee Engagement boils employee happiness down to three similar items: to feel like who you are matters, the work you do has an impact, and that you’re making progress.
Many of today’s perks support people in their journey toward achieving these deep desires. Company perks like book clubs, Toastmasters memberships, company-sponsored sporting teams, or paying for happy hour can lead the development of an internal community. Additionally, continuous education and training help team members grow and achieve more in their career, helping them to have a more significant impact on their company’s mission.
Company perks are not the only ingredient in employee happiness and engagement, but a carefully crafted perk program can be more strategic in fulfilling employees needs than people realize.
5. Investing money to keep employees is better than investing to hire more new employees.
When talented employees are happy, organizations win. As pointed out above, happy employees are more productive. They also tend to stay at their companies longer, making employee retention an essential focus for companies.
According to research by Kronos and Future Workplace, 87% of HR leaders consider retention a critical or high priority over the next five years.
(Take a look at Employee Perk Statistics: The Ultimate List to learn more about employee perk statistics.)
Retention is even more essential in a world where turnover can exceed 200% of an employee’s annual salary according to the Center for American Progress. Want to calculate your company’s cost of employee turnover? Use the formula found here.
6. Perks reinforce and strengthen the company's purpose, values, and culture.
For too long company perks have been added to companies without too much strategic thought behind them.
They’ve slipped into a reactionary “everyone wants yoga, so we’re offering yoga” to “everyone is offering ice coffee and kombucha on tap, so we need to too.”
As HR strives to become the strategic partner to leadership as Dave Ulrich mentioned in Human Resources Champions, it’s important to zoom out of the day-to-day operational focus and offer a strategic approach to perks that provide a competitive edge for the company.
One method of becoming a strategic partner is to offer perks that do more for the business, and it’s employees, by proactively strengthening the unique purpose or core values of the business.
Perk programs tied to using your company’s software, reinforcing values like empathy or learning, or principles like “never eat alone” is a powerful way to translate what matters to the company into the everyday life of employees. What results is an even more pronounced culture.
On a micro level, this reinforcement is seen in the differences between employees collaborating over lunch vs. eating in silos. It’s the difference between employees comfortably owning their failures vs. sweeping them under the rug. It’s the difference between your LGBTQ+ team members being comfortable bringing their whole selves to work versus them not.
Examples of ways that companies can reinforce their unique culture are as follows:
7. Perks can align with a company's purpose
An example of this today is Airbnb provides employees $2,000 a year for a travel allowance. The caveat is that they must stay with an Airbnb host while traveling so that they can experience life as their customer would which develops greater empathy and understanding of their customers and their needs.
If you are a digital health company, offer health and wellness benefits
If you are a fertility company, perhaps family benefits.
8. Perks can reinforce a company's values
If you have an “Always be learning” value, strengthen it by investing in a books program, an annual conference budget, or bringing experts externally to the office to offer educational workshops or activities to learn and grow.
What a company invests in sends a clear signal to the employees what matters to the organization and what behaviors they value. Make sure you’re thinking about your perks program strategically to differentiate yourselves from the myriad of competitors vying for talent.
9. Perks are a relatively inexpensive way to support employees beyond salary.
Instead of increasing everyone’s salary, company perks can offer more value.
To make employees happy today, it doesn’t require an increase in salary. According to Glassdoor’s Q3 2015 employment confidence survey, 79% of employees would prefer new or additional perks and benefits to a pay increase.
Companies are realizing that to keep employees happy, it doesn’t require a salary increase - especially if their salary is already at a point they think is fair for their work and leads to a high quality of life. As Daniel Pink’s book Drive suggests, once people meet a certain level of salary that is fair, their able to focus on intrinsic motivational factors such as mastery, autonomy, and purpose.
Perks can enhance employees lives in many ways that more money cannot, like added convenience, saving money, continuing their learning to advance their career, solving for their family in ways they might not be able to by themselves, contributing to others more, and developing a greater sense of community.