Employee benefits can be a highly effective recruitment tool, but too often benefits are only discussed by employers during the onboarding process, after an offer has been accepted.
According to research by Group Risk Development (GRiD), a U.K. industry association for life and disability insurance benefits, just 22 percent of organizations promote employee benefits during recruitment, such as in job advertisements, and only 25 percent include any mention of employee benefits before day one of employment, such as in an offer letter.
“It is completely nonsensical that most employers fail to promote their employee benefits as part of the recruitment process,” said Katharine Moxham, GRiD spokesperson. “Benefits already in place within the organization will be utilized by existing staff, and ostensibly communicated to new recruits should they sign on the dotted line, so it really is a missed opportunity not to make the most of them to attract the best possible talent.”
Benefits as Important as Salary
GRiD’s 2020 U.K. survey of 500 HR decision-makers and 1,165 employees showed that 29 percent of employers think that benefits are as important as salary in helping to recruit and retain employees. That’s close to the 32 percent of employees who say that employee benefits are as important to them as salary.
“2020 has undoubtedly taught us to value our health, and so there needs to be a greater awareness amongst employers about what their next recruits will be looking for in a new role,” Moxham said. “Financial security will always be important, but it’s likely we’ll see that being balanced against other factors, such as whether a potential employer looks after the wider health and well-being of staff.”
If potential recruits know about the benefits package in advance, “it can be a deciding factor to join a company,” she said.
GRiD’s study dovetails with recent findings from last summer when Staples surveyed 1,549 U.S. workers on their workplace benefit preferences, concluding that “perks are critical in attracting talent” as a majority of employees (62 percent) would accept a lower salary in exchange for better benefits.
This preference, however, depended on the demographic of the respondents. Married employees and those with children were more likely to prefer better benefits to higher pay, especially regarding work/life perks such as flexible hours and the option to work remotely on an ongoing basis, Staples found.
Single employees and those who don’t have children were the least likely to accept a lower salary in exchange for more generous workplace benefits.
Benefits and Retention
Benefits also can be overlooked as a key to employee retention. Last year, for example, half of small-business employees in the U.S. said a primary reason they are staying in their job is for the health insurance benefits, according to HR software company Zenefits’ survey of more than 1,100 full-time workers at businesses with fewer than 500 employees. The survey was conducted in September.
Almost a third of respondents said benefits such as online fitness classes, well-being app subscriptions and telemedicine access were added to their package during the pandemic. Traditional “core” benefits, however, remained the top lure for employees.
“It comes as no surprise that health insurance is the No. 1 benefit that employees want,” said Andrea Curry, content marketing manager at Zenefits. “This was true before the pandemic, and still remains a top priority.
Most Popular Benefits
While newer perks such as well-being apps are appreciated, traditional “core” benefits continue to be the plans that employees’ are mostly like to participate in when offered, according to a 2020 survey of more than 1,100 full-time small business workers. The most popular benefits are:
1. Health insurance
2. Paid time off/vacation days
3. Vision/dental insurance
4. 401(k) retirement plans
5. Life insurance
6. Short- and long-term disability
Pandemic Highlights Benefits’ Value
Employees are also giving more weight in their employment decisions to financial wellness benefits. Amid the COVID-19 pandemic and the resulting economic fallout, workers report a significant increase in the value they place on these benefits, including a double-digit increase in how likely they are to remain at a job based on non-health benefits such as retirement savings, disability insurance, life insurance and other tools to help alleviate financial stress.
Those were among the findings in an August 2020 survey by Prudential Financial, a benefits provider, of 2,000 adults in the U.S. currently employed or seeking employment.
Employed respondents overwhelmingly said their benefits programs make up a key part of their compensation (77 percent, up from 67 percent in 2019) and are a big reason they would stay at a job (73 percent, up from 59 percent).
By more than a 2-to-1 margin, respondents said they would “be willing to take a chance on a new job right now if it offered better benefits” (52 percent agreed while 24 percent disagreed, with 24 percent neutral).
While pleased to see workers recognize the value of a comprehensive workplace benefits package, “we also cannot ignore that this stems from the financial, physical and mental stressors of the pandemic,” said Leston Welsh, head of business segments for Prudential Group Insurance.
Related SHRM Article:
Upheavals Alter the 2021 Benefits Landscape, SHRM Online, January 2021