In lieu of higher salaries, employers are offering plusher benefits packages to attract and retain talent, a new survey suggests.
In a report on more than 450 employers surveyed by the Society of Human Resource Management, 35 percent cited bigger benefits packages, compared to 28 percent the year before. A small chunk of those asked (7 percent) noted a reduction, but that’s down from 9 percent the year earlier. The survey also noted the rise of such new benefits as company-provided fitness trackers, egg-freezing, group fitness and student loan repayment programs.
The more attractive vacation and wellness offerings come at the expense of salary increases, as wages remain stagnant. The survey suggested that employees are promoting that trend. “Research has shown that many job seekers frequently place greater importance on health care coverage, flexible work schedules and other benefits rather than on their base salaries,” the report said. Indeed, research, including an oft-cited Ernst and Young survey, has shown that workers prize flexibility—especially the coveted millennial segment.
But most research, including SHRM’s own findings, have found that higher pay still trumps flexibility and other young person workplace demands, such as working at a mission-based company with a fun culture. According to the Ernst and Young survey, after competitive pay and benefits, the top things employees say are very important in a potential job are “being able to work flexibly and still be on track for promotion” and “working with colleagues, including my boss, who support my efforts to work flexibly,” both tied at 74 percent.
A 2014 study by Survey Monkey found that millennials ranked pay as the most important factor in a job, above meaningful work and flexible hours. SHRM in 2014 found that 60 percent of employees surveyed rated compensation as “very important,” making it the top contributor to overall employee job satisfaction, up from the No. 3 spot in 2012.
In other words: People care more about work-life balance than they used to, but money still rules.
The focus on benefits packages has less to do with changing employee preferences than health insurance trends. As health care costs have risen over the last 10 years, health benefits have eaten up an ever-growing share of total employee compensation. Between 2003 and 2013, health insurance premiums rose 60 percent with only an 11 percent increase in income during that same time period, per a Commonwealth Funds study. In the last few years, employers have started shoving even more of those costs on employees, without raising wages, according to the Center for American Progress. That falls in line with SHRM’s survey, which found 43 percent of employers now offer health-savings accounts, in which people put away tax-free money to pay for their own medical costs, up from 38 percent five years ago. The report also found an increased focus on preventative focus health plans, with the hopes of decreased spending.
Interestingly, the study found that most flexible working benefits—like work-from-home policies and flextime—have remained constant. “Though there were increases over the last five years in the number of organizations offering casual dress day (one day per week),” the report reads.