The Ultimate Guide to Employee Perks

A critical component of modern-day compensation strategies. 

Last updated on 5/14/2021


What’s in this guide?

A comprehensive guide covering everything related to employee perks: from the unique perk examples of employee favorites to best practices, and insights into the future of employer perks—we cover everything you need to know about company perks in 2021 and beyond.

Topics covered include:

  1. What are company perks?
  2. List of employee perks
  3. Benefits & advantages of employee perks
  4. Best practices for selecting perks
  5. Problems relating to perks today
  6. The future of employee perks

1. What are employee perks?

Before we can dive into all of the things you'd need to know about perks, we first should define perks by answering the simple question, "what exactly are perks?"


Employee perks are non-wage offerings given to employees that extend beyond salaries and benefits (like health insurance, dental, vision, etc.).

They're often called fringe benefits too.

Perks are ways to support the employees beyond the standard salary and benefits and include purchasable, programmatic, and environmental perks.

  • Purchasable perks include perks which are purchased including catered lunches, books, fitness stipends, pet insurance, and student loan forgiveness.
  • Programmatic perks are policy-driven advantages to working at a company such as remote work opportunities, being pet-friendly, or offering Summer Fridays.
  • Environmental perks are the ways in which you set up your office including meditation rooms, slides, and the overall space.

What perks are not:

  • Perks are not health care, dental, or vision package. Those are benefits.
  • Perks are not essential company hygiene factors like mission, vision, values, fair pay, or a strong/ethical team.
  • Perks are not equivalent to company culture, but rather a component of it.
  • And while it's really great if you work close to where you live, it wouldn’t be considered an "employee perk." 

Read full definitions of compensation, salary, benefits, perks, perk stipends, and more here.

More on the definition of perks:

Almost everybody understands how salaries, bonuses, and benefits work.

But employee perks? Not so much.

Perks have been loosely defined since their inception, and this is a surprisingly serious issue.


No definition for perks = no progress.

Without a precise and agreed-upon definition, our conversation around perks becomes hazy, confused and we can't discuss their role because nobody is on the same page, which means we certainly can't solve their issues.

A prime example of being misunderstood is in the not-so-distant past when people claimed company perks were equivalent to company culture.

ping pong in office

Photo by Proxyclick Visitor Management System on Unsplash

Fortunately, the conversation has progressed enough to acknowledge that company perks are not company culture, but rather a part of it.

The lack of definition has made it easy for perks to be stretched, pulled, and applied in many different directions to solve many different problems within organizations.

It’s resulted in company perks becoming the quick, easy, and relatively inexpensive “go-to” to solve organizational culture issues, keep employees in the office longer, and make employees happy while distracting them from organizational and leadership issues.

Let's be clear; we do not think perks should be used for these purposes.

The incorrect application of perks has lead to them being branded poorly and being widely misunderstood and disliked by many people.

Fortunately, those days are close to being over.

The industry has come a long way in the past decade. The reasons companies offer perks as well as the lifestyle benefits they're seeking, are much more altruistic and impactful on employees’ lives. 

However, we think there’s still room for improvement.

It’s time we reimagine how company perks can contribute to an employee and a company because right now they’re barely scratching the surface.


9 out of 10 people (who aren't in HR) agree that the perks should suit everyone.

Perks & Productivity Report 2020, Compt & Flock 

36% of female respondents who do not take full advantage of their benefits say it is because the benefits do not meet their needs.

EY & Better You Survey, 2020

4 in 5 employees want benefits or perks more than a pay raise.

Glassdoor Employment Confidence Survey


2. List of Employee Perks

If your goal is to continue with traditional perks programs, below is a short list of the perks that you can expect your people to want.

Want to see a full list of perks that engage your employees? Then check out our comprehensive list of top perk vendors.


Ready to gain more from your perks program?

Download our free Perks Performance Analysis Guide to help get an understanding of the success of your perks program and areas for improvement.

perks performance

3. Benefits of employee perks

There's a lot of advantages to offering employee perks in 2021, below are just a few of the most salient:

  1. Perks make employees more productive and happier.
  2. Perks help attract, engage, and retain superstar talent.
  3. Company perks are not the only ingredient in employee engagement, but they help.
  4. Investing money to keep employees is cheaper than hiring new employees.
  5. Perks reinforce and strengthen the company's purpose, values, and culture.
  6. Perks are a relatively inexpensive way to support employees beyond salary.

1. Perks make employees more productive and happier.

If the amount of press coverage company perks get indicates their impact within organizations, they’re transformative.

A quick Google search for company perks will result in articles covering the “best” ones, unique, unusual, for working parents in 2021 and more.

While there’s not much research strictly tied to company perks and their impact on businesses, ask any recruiter about their conversations with potential employees, 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. They show a company’s willingness and desire to support their employees and their goals.

Sure, employees want free coffee and pet insurance and in-office showers with towel service. However, what employees really want is to have better, more productive, balanced, and happier lives.

Employee happiness is excellent for an organization’s bottom line. Studies have shown that when employees are happy, they’re 20% more productive, leading to an increased stock price for public companies.

“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 the labor available is rapidly increasing. These two factors drive 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.

We're preaching to the choir here, but 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 research 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.”
woman sitting at table

3. 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 tight labor 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 are directly related to an employee’s ability to grow in their career, feel like they belong and are respected, and work 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:

  1. to feel like you matter
  2. the work you do has an impact
  3. 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 to the development of an internal community. Additionally, continuous education and training help team members grow and achieve more in their careers, 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 because it's a lifestyle benefit that goes beyond basic benefits.

4. Investing money to keep current employees is better than investing in hiring 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 Kronos and Future Workplace research, 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 find more statistics.]According to the Center for American Progress, retention is even more essential in a world where turnover can exceed 200% of an employee’s annual salary. Want to calculate your company’s cost of employee turnover? Use the formula found here.

5. Perks reinforce and strengthen the company's purpose, values, & 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 should 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 offering perks that do more for the business and its employee by proactively strengthening its unique purpose or core values.

Perks should be to reinforcing values like empathy or learning, or principles like “never eat alone," or tied to using your company’s software are a powerful way to translate what matters to the company into employees' everyday lives.

What results is an even more pronounced culture.

This reinforcement is seen on a micro level 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:

  • If you are a digital health company, offer health and wellness benefits
  • If you are a fertility company, perhaps family benefits.
  • Airbnb provides employees $2,000 a year for a travel allowance. The caveat is that they must stay with an Airbnb host while traveling to experience life as their customer would, which develops greater empathy and understanding of their customers and their needs.
  • If you have an “Always be learning” value, strengthen it by investing in a books program, an annual conference budget, or bringing outside experts to the office to offer educational workshops or activities to learn and grow.

A company invests in a clear signal to the employees about what matters to the organization and what behaviors they value.

Make sure you’re thinking about your perks program strategically to differentiate yourself from the myriad of competitors vying for talent.

6. 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 a salary increase. 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 realize 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 fair level, they can 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, 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.


Perk stipends: the best company perks?

Have you heard of perk stipends yet? They empower HR to craft custom programs that enable their people to purchase the perks they want and need most.

In the example to the left, Sam's company allocated $100 per month to spend the following perk stipends: learning, health & wellness, and food.

What would you buy with your $100/month for perks?

employee perks programs stipends

Download Perk Software Buying Worksheet

Whether it's selecting individual perks, debit cards, or Compt's stipends -- our goal is to help you select the best perks program for your situation.


4. How to select the best company perks

Not all company perks are created equal.

That's why we've created the 4Cs and 1P framework.

It's a tool that HR managers use to ensure their employee perks are being approached thoughtfully and proactively. 

Our goal is to help companies everywhere be more balanced and inclusive with their perks. We talked with many HR professionals about their perks programs, and from these conversations, we noticed four distinct methods for thinking about perks and how to select the best ones for an organization.

The first thing to consider when offering perks are their purpose.

1. First, consider the perk's role or purpose

Each perk has a purpose associated with it -- i.e., the reason it’s being implemented at an organization.

Reflect on the difference between offering your employees catered lunches versus conference allowances.

The purposes of perks can be broken into five distinct categories, what we refer to as the 4C and 1P:  Convenience, Career/Continuing Education, Community, Personal/home-life, and Contribution.

perks framework 4cs and 1p


Convenience perks are all about adding a level of comfort to an employee’s life. Not having to leave work to accomplish some essential errands can be a huge time saver. There are two types of convenience perks - ones that employees pay for and the ones they don’t.

Perks like in-office dry cleaning, car washing, and manicures are brought into the office to save the employee's travel-time or organizing, but they’re still often paid for by the employee.

The other category is the convenience where companies pay for them and include perks such as coffee, snacks, catered lunches, and beer.

Continuous education/career

The goal with continuing education perks is to assist employees in developing further mastery with their craft. When employees learn more, they’re more intrinsically motivated, more productive, happier, and that positivity flows throughout all of their work. If they’re a leader or a person who leads without the title, this positivity can be contagious and permeate other employees and their work as well.

Perks like conferences, books programs, paid online training or seminars, and professional organizations all educate employees and can all meet this perk need.


Organizational Behavior expert, Adam Grant, recently released new research on what employees care about, and it’s these three things: career, community, and contribution. While most people don’t realize it, the perks offered at a company can increase the community element tremendously.

Community is a sense of connection and belonging. Community is feeling respected and cared about.

Perks like in-office yoga or meditation sessions, company-sponsored Toastmasters memberships, extracurricular sporting teams, or happy hour lead to increased community and personal growth.


Personal or home-life perks apply to the perks that they’ll use outside of the office and can be used to make them more balanced, fulfilled, and whole which will have an impact on their work. This includes health & wellness perks like discounts on gyms or health & wellness perk allowances. It also includes perks such as tuition assistance, pet insurance, daycare support, or egg-freezing.


Defined as supporting employees in their contributions to helping causes.

Contribution-categorized perks are creating a policy around volunteer-days, running a company-wide charity like bringing in canned foods for the hungry or school supplies for needy children, and even offer matching programs for charitable giving.

If perks were a pyramid similar to Maslow’s Hierarchy of Needs, contribution would be at the peak.

Those are the main purposes that most perks have, though some might not fit squarely into a particular category. Often there’s overlap, which is excellent. If you can find perks that fulfill multiple purposes, you'll be able to offer more value to your employees and give them the best possible experience.

Though the purpose is an important idea to keep in mind when selecting perks, it's not the only one. There's still cost, employee use, and impact that still have to be considered.

group of people huddling

2. Next, think about how much perks cost

Perks can range anywhere from free to thousands of dollars per employee.

While we believe company culture shouldn’t be about the size of your wallet but the size of your heart, it’s true that companies with bigger pockets can offer more expensive and specialized perks.

That’s why large organizations can afford to cover tuition reimbursement, egg freezing, and gender-affirming surgeries.

If you’re an organization with a tight budget, company perks are not out of reach. However, they might require more creativity and come in the form of a company culture initiative.

Instead of offering gym passes or installing an on-site gym, develop a free "100 Push Up Club," create a company-wide 30-day challenge where everyone picks their own goal or develop a fitness contest where the winner receives a prize like a Fitbit, a pass for a free massage, or whatever else might be related to the contest.

pink pig figurine on white surface

3. Consider how many employees they’ll support 

Thinking that all perks will apply to everyone is an outdated line of thinking.

When perks were brand new and everyone was happy to have something extra in their office, people were appreciative of everything and anything. Nowadays as more companies offer more perks and the employee experience is becoming increasingly personalized - employees want perks that are customized to them and their needs.

Take providing beer for example. While beer used to be an excellent starting point for offering perks, there is rarely an office where everyone drinks beer. Either some people are gluten-free, prefer wine, are new parents, and would prefer some other investment with that perk money, or are remote employees who cannot enjoy this perk at all.

Apply this line of thinking to all of the perks you offer and you can quickly see how lopsided your perks offering can become.

When thinking about your perks, be sure to give an honest assessment to how many people and who they’ll apply to. Remember to consider your remote team too.

pair of brown shoes

4. Lastly, consider the impact they’ll deliver to an individual and the organization

Perks have different types of impact, as well as varying levels of impact.

With company perks, often there are two approaches to impact: proactive and reactive.

Proactive perks are ones that are offered because the company is proactively trying to align with new company values or industry trends.

Reactive is when companies are offering perks in response to their competitors or the industry, or they’re realizing that there is something they need to address within their company.

An example of the latter type of reactive perks is a company noticing that the team isn’t staying up on their craft anymore, so a company might institute a book program, a book club, or even give everyone a couple of hours of “learning time” per week for them to better hone their skills.

There you have it.

Those were the 4 top things to think about before you add a new perk. 

Some of the other considerations addressed less often when it comes to picking a perk are:

  • how easy it is to implement
  • the time it takes to manage
  • and how it will scale as the company grows.

Ultimately, before deciding on your company’s new office perk, it’s important to have an idea of what goal you’re trying to accomplish, and where it falls on a spectrum of money, employee application, and impact.

If you want to read more to decide which perks would be best for your team, check out The 7 Best Employee Perks for 2021.


Receive a Perks Program Review

Are your perks not accomplishing their goals anymore? It could be time for an update.


5. Problems with perks today

Perks as a talent strategy have been around for a while, and as their role and significance inside organizations increases, so have the problems associated with them:

They're no longer innovative, they’re required. 

With the unemployment rate at an all-time low in the United States, and the skills gap increasing, top talent is more difficult to attract than ever. Companies are turning to perks as a way to stand out from the competition. In this case, more is better. Offering perks was once an innovative strategy, but companies of all sizes and budgets have since adopted this approach.

As Kirsten Pollard, Chief People & Culture Officer at OFX, puts it:

“[The basic perks] are more than important, they’re essential. The competition to retain talent is rife, and perks are expected these days.”

They are now challenging to manage and maintain.

Regardless of whether you offer 2 or 20 perks, someone on your team (maybe you?) will have to pick, purchase, and maintain them for the team. Today, most people use email filtering and spreadsheets to keep track of this, which is an inefficient and time-consuming model.

If you feel this pain, learn more about the Perks Tipping Point to see how you can address it.

the perks tipping point

Their adoption is growing, but the models of offering them haven’t kept up.

Unlike many other industries, perks do not yet have any frameworks or processes defined for how they should be picked by companies. Most people are relying on prior knowledge, experience, and those around them.

If you're looking for a new approach, check out lifestyle spending accounts which are the new approach many companies are taking.

The research on them and their impact are still light.

Because they’re often combined with benefits in research studies, they haven’t been given their proper place in research studies.

To combat this, we've begun pulling together a big list of perk statistics.

There aren’t any “perfect” or “best” perks.

Many articles online tout “the best” company perks, but the truth is that everyone’s preferences, wants, and needs are different. On top of that, what someone might need today regarding health & wellness or continuous learning might be completely different in six months.

aerial view of people walking on raod

Lastly, the perks standard is being set by some of the big players who have big budgets.

We think company culture shouldn’t be about the size of the company’s budget but rather about the size of the company’s heart.

With big-budget companies having unlimited opportunities to buy perks, smaller companies need to be more creative than ever before if they want to compete.

Additional reading:


6. The future of company perks

What does 2021 have in store for employee perks? That's the question we set out to answer. We recently connected with passionate people-first folks in the people operations industry, as well as managers, tech CEOs, and culture software owners and asked them to provide their thoughts. 

Below are the employee perk trends that bubbled to the top:

  1. Evolution away from basic amenities to more meaningful perks
  2. Emphasis on flexibility and personalization
  3. The spectrum of uses for perks will continue to expand
  4. A focus on turning the previous intangibles into implementable tangibles
  5. More companies offering more perks

You can learn more about these in-depth by reading our top employee perks for 2021 article.


Final thought...

Culture eats strategy for breakfast.” - Peter Drucker

Company perks are still in the early innings for their use in companies everywhere. As the talent market continues to tighten, and the percentage of GenZ and millennials in the workplace increases, companies will continue to turn to perks as strategies to enhance their culture, differentiate themselves, and make a meaningful impact on the lives of their employees.


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