Although it may come as a surprise to some people, the first quarter of 2021 proved itself a job-seekers market. For practical purposes, that means employers face a brisk competition for top talent. When employers consider incentives to lure in-demand job seekers, the most common discussions center around the importance of adding health benefits to the compensation package. Employers seem to focus far less attention on the appeal to prospective employees of employee perks.
You can think of benefits as non-wage compensation that serves to increase an employee's salary. In other words, the benefits side of the compensation package pays for those necessary items that employees would have to pay for themselves in the absence of the benefit package factors. A few examples are:
In contrast, you can think of perks as rewards that generally provide a participation opportunity for employees and are not part the compensation package or salary. Perks are intended to provide the extra boost to the prospective employer's offer.
Perks are the package add-on that makes employees choose your workplace as the next step in their careers instead of your competitor. They are also cost-effective incentives for your current workforce to remain in their current positions.
Knowing what perks to offer requires you to know the needs and desires of your employees. A popular example of employee perks is free snacks, water cooler, and free coffee/tea or soda in the break room. These snacks save your employees money and time. No need to buy or pack snacks if the boss provides them free of charge in the break room. Snack breaks may improve productivity, too, providing that much-needed pick-up that can increase productivity in the inevitable afternoon slump.
In addition, employee recognition programs are key to recruitment and retention. Employees who excel or who reach an important goal feel valued as team members when employers publicly recognize their hard work. The recognition may come in a company newsletter, or at a company-wide conference. In these days of remote workers, a basket of fruit or a special t-shirt dedicated to the team's successful efforts goes a long way to reinforce the company's inclusive culture as well as provide a giant boost to the team's spirit. Valued employees work even harder when employers acknowledge their value as members of the company's family.
Another potential perk proves popular with those employees who volunteer their time on behalf of an organization. Volunteer time helps improve lives within the greater community and validates the efforts of those employee-volunteers. Many employers set aside company time for volunteer opportunities in the community. By doing so, employees do not have to take time out from their personal lives to volunteer their services. This perk is a win-win. The employer reaps positive name recognition within the greater community that mere money cannot buy.
Providing employees with perks has several advantages. First, adding perks helps you attract the top talent in your field. Prospective candidates will see you as an employer of choice. In practical terms, that means you can lure the best candidates. This is true even for those candidates not actively looking to leave their employer.
Second, perks make working conditions better for employees without having to expend as much capital as that associated with health benefits. Moreover, health and pension benefits are fraught with regulatory compliance issues while de minimis employee perks escape regulatory guidance because government agencies consider the accounting of them as unreasonable.
Rather, because the types of perks under consideration are small enough to consider non-compensatory, they fall easily into the category of common business expenses.
Without question, employee perks offer an economical way for businesses to provide lifestyle choices to their employees. Given these choices, employees become more productive and happier. Happier employees, in turn, indicate a more stable workforce. A more stable workforce makes it easier for you to make long-term, strategic decisions for your business.
Elia is a Human Resource Consultant with over 25 years of experience. She specializes in employee relations, training and development, legal compliance, and HR consultation.