Though the last couple of years were stressful for most, if anything good came out of the pandemic era, it’s that employees of all industries began reevaluating their employers and their relationship to work.
For the first time in a long time (or possibly ever!) employees realized that the power was in their hands to demand more from their employers.
They began to take stock and reprioritize what was most important. Many people left their jobs — 47.4 million people in 2021 to be exact. And though there are many different reasons why workers quit, one thing is certain: Employers must step up and take the necessary action to retain their team.
There are many things that employers can do to meet the needs of their employees, and offering the right benefits is a big one. But are the right benefits actually better than higher pay? Let’s discuss how benefits compare to compensation when it comes to employee retention and which ones are the most important to employees.
Benefits are just as valuable as compensation
When thinking about retention, raising compensation is a logical first step. In a recent survey of hourly workers, we found that 55% of all employees are currently seeking or will be seeking new employment in order to get a pay increase in 2022, and 64% of those workers seeking an opportunity for a pay raise said they would stay at their current job if their employer gave them the compensation they were looking for.
If offering raises isn’t an option for your business right now, what else can you do to keep your employees around?
We have good news! 66% of those employees said that they would stay at their current job if their employer offered additional benefits instead of a pay increase. This means that when it comes to employee retention, benefits can be just as important as compensation.
We asked the employees in our survey to rate which benefits they would be most likely to accept over increased compensation. The table below shows what they had to say.
What benefits do employees want?
Though it’s not possible for every business, offering health insurance can lessen the financial burden on your employees and make medical care more accessible. This can help you attract new talent and retain the current members of your team.
Depending on your industry, offering health insurance may have an even bigger impact on employee retention. Here are some of the industries that would most likely accept health insurance over a pay increase from their employer.
- 38% in the automotive industry said they would accept health insurance over a pay raise.
- 50% in education and childcare
- 58% in hospitality, entertainment, and recreation
More paid time off
More paid time off (PTO) is a fairly easy way to show employees that you’re committed to keeping them around. At CareerPlug, we offer unlimited PTO which has been a great benefit for our employees. Our Senior Director of People, Natalie Morgan says it best:
“At CareerPlug, we want our people to know that we trust them and we value their whole life, not just when they show up to work. Offering unlimited PTO puts the focus on results, rather than time spent at work, and gives employees the flexibility to take time off when they need it without calculating in their head how much time they can use and what they’ll have to save for later. Sometimes you need the afternoon to get your car fixed or attend an event at your child’s school and you shouldn’t have to weigh that against saving a day if you might get sick later in the year. It’s ultimately about trust and if you don’t have that with your employees you have a different problem to address than PTO.”
Is it possible to give employees additional PTO to use as they please? How about some extra holidays or allowing them to take their birthdays off? This time can be really valuable and have a positive impact on your employees’ work/life balance. This will ultimately lead to more satisfied and productive employees and can even prevent employee burnout.
Professional development opportunities
Professional development opportunities also ranked as an important benefit that job seekers would accept over compensation. Other data backs this up: A 2021 Gallup survey found that 87% of millennials prioritize professional growth and development opportunities in the workplace.
One way we support employee development at CareerPlug is by using “Growth Plans” that employees work through with their manager. These plans include goals and skills that employees would like to learn. Managers then work with employees to create an actionable plan to reach these goals. We created a Growth Plan template that you can use to support employee development. Click the button below to download it right to your desktop.
You might also consider providing a professional development stipend that allows employees to purchase books and classes or attend trainings on the company dime.
Just over a third of Americans said that they’ve never had a retirement account and fewer than one in three American workers reported being on track or ahead of their retirement plan.
Just as offering health insurance can lessen the financial burden on your employees, offering retirement plans can also set employees up for retirement and a brighter financial future. Employee sponsored retirement plans are a big point of consideration for many job seekers when evaluating a job opportunity and also seems to be an important benefit current employees would accept over an increase in pay.
Fitness or healthy lifestyle incentives
The employees in our survey also said that fitness or healthy lifestyle incentives would be an acceptable benefit instead of a pay increase.
One way you might do this is to offer wellness days in addition to vacation or sick time and encourage employees to take time off for things like massages, hikes, retreats, etc.
Some businesses also provide employees with a stipend to spend on local fitness classes or gym memberships. You might consider bringing classes to your employees and offer monthly yoga or meditation sessions either in person or over Zoom.
Many full-time employees struggle with balancing childcare with work. This disproportionately affects women who often carry the heavy burden of childcare and other household responsibilities. In 2020, 3.5 million mothers living with school-age children left active work, and these numbers have not improved much over the last couple of years.
Assistance in paying for childcare or even offering on-site childcare can set you apart as an employer and make you an easier place to work for women with school age children.
Flexible or remote working options
Flexibility and the option to work from home have become hugely popular benefits. One survey by FlexJobs found that 70% of millennials have left or considered leaving a job because it lacked flexible work options, and about half of older workers report the same. In our survey, 44% in the insurance and financial services industry said that flexible or remote working options was the benefit they would be most likely to accept over increased compensation.
With many companies returning to the office, a lot of workers are leaving their jobs for companies that have adopted remote working options. This means that not only can offering remote work keep your current employees around, it can also help you stand out to job seekers and attract more applicants to your open roles.
If feasible for your business, tuition assistance or reimbursement can be a great way to retain your employees and invest in their career. Employees that feel genuinely valued are more likely to stay loyal to your business and will have increased knowledge and skills to help it grow.
Oftentimes, companies that offer tuition reimbursement require participating employees to sign a contract to stay employed by them for a certain amount of time with stipulations if they decide to leave.
Even if an employee does leave for a new opportunity, you can rest assured that they will have positive things to say about your employer brand and the big impact that your company made on their career. This encourages other high performers to apply to your team.
To sum it up
The right compensation is clearly an important part of being a great place to work. You may consider using the compensation calculator on Indeed to be sure that you are offering comparable compensation. If you are, your next step should be to incorporate some of the benefits listed above.
In an economy where job seekers and employees have more power than ever, offering competitive benefits can be a powerful way to attract new talent and keep the right people on your team.