Evolving social values usher in a modern and holistic model for employee benefits that attract reliable and talented workers
Employers duck and dodge as they navigate a labor market obstacle course the US hasn’t seen before. Workers are burnt out and tired of compromising a healthy work-life balance. Challenges for businesses and workers alike have everyone looking at employee benefits to dissolve pain points.
With so much competition for top talent, employers scramble to find effective ways to attract, motivate, and retain high-caliber employees. Studies show that attention to a new generation of concerns and values could be the most effective method for talent acquisition. Implementing a modern suite of benefits and perks can be a low- or no-cost upgrade that attracts workers, retains staff, and significantly reduces expenses.
Shifting social values reveal to employers what workers want, and the length they’ll go to get it. These values are changing the landscape of the work environment and with it, the face of contemporary benefits.
Recent Social Impacts to the Workforce
Several major factors have fueled the changes seen in the priorities and values of workers. These social shifts have abruptly impacted the employee expectations and the bottom line for businesses. As a nation, US citizens have recently faced critical illness, death, job loss, shortages of goods and disrupted supply chains, and with trepidation recession on top of it all. As a result, today’s workforce is reshaping employment by reassigning value to work-life balance, wellness, and purpose.
The Workforce Itself has Changed
Baby boomers are retiring from the workforce, but millennials are entering in hoards and becoming the majority. A recent roundup of statistics about millennials in the workplace reports that around 35% of US workers are millennials now, but in just three years, globally, they will make up 75% of the workforce.
Contrary to the stereotype, millennials aren’t avoiding hard work and 66% are employed full time. Many more are employed part time, and a mere 24% accept gigwork, indicating a preference for the traditional job. The majority of this generation works over 40 hours per week and more than a quarter of them work more than one job. (TeamStage, 2022)
These individuals are a fortunate addition to the talent pool not only for their dedicated work, but because they often adapt quickly, collaborate effortlessly, and possess technical savvy. This generation is more outspoken and apt to ask for guidance at work if the goal or mission isn’t clear. These hard-working millennials are ready to give their authentic best in performance and loyalty IF they feel it’s being reciprocated.
Newer generations want more control over their time and money. A flexible schedule, a flexible work location, and flexible pay options are among the most popular reasons for millennials to take a job opportunity, or jump ship if those perks aren’t available. According to a 2022 workforce study, about 1 in every 2 millennials would leave an existing job for one that offered more flexible work styles. (Nationwide, 2022)
The Pandemic as a Reality Check
The shift in worker values and priorities has been morphing for the last 10 years, but it was the COVID-19 pandemic that fueled rapid changes and impacted the US work landscape. Individuals were prompted to consider what’s truly important and necessary to feel secure and happy. As COVID blurred the lines between work and home life, employee needs began to blur there, too.
The pandemic was traumatizing. Not only were jobs and businesses lost, but also homes, families, and lives. The stability of personal finances, mental wellbeing, and physical safety were all compromised. Now, with barely a moment to catch its breath, the US is facing its next threat: recession. It’s a real possibility, but it would be unlike any recession our country has seen in the past.
Typically a recession will see a scarcity of jobs, as was the case during the 2008 recession (Uchitelle, 2009), but statistics from August 2022 show there are still well over 10 million jobs available in the US. (Statista, 2022) Workers are reacting by seeking jobs that protect themselves and their families.
The Shift in Values Demands Modern Benefits
As a result of so many individuals of younger generations being forced to navigate these extreme challenges, many are taking genuine care to consider what’s actually important to them in cultivating a fulfilling life. The basics, like shelter, food, safety, and security have become entwined with working, but new generations are putting emphasis on self-actualization from work, too.
Workers want a healthy balance of purposeful work and time to enjoy life. They crave autonomy, self-development, and the pursuit of their fullest potential. It’s not surprising that workers lean into companies with a strong and supportive culture that embraces and capitalizes on these ambitions. Employers who want to catch a competitive edge on the War for Talent are updating their honey pots: the employee benefits package. These updates come with more flexibility, control, purpose, and professional development than the market has seen in previous years.
A Modern Benefits Package
The US and its citizens have evolved drastically over the last 70 years. Medicine, politics, family structures, and recreation have all transformed as technology grows in strength and breadth. From communications, to travel, to automation, how we work has changed, too. In days past, a job was center stage and lifestyles were made to fit around work. Today, more and more job seekers are sifting for a job that will fit their lifestyles. With so many changes to the ways employees work, it’s puzzling that the ways workers are compensated have largely remained the same.
In the 1950s, when the idea of employee benefits packages became more common and competitive, a national emphasis was made on employer-sponsored healthcare options. The next few decades saw an improvement on health benefits and a push for life insurance, disability care, and retirement and savings options.
For a while, health, life, disability, and retirement were the bait for employers trying to attract high-quality workers. Paid time off was an uncommon addition to benefits packages through to the 1970s, and considered a brag-worthy perk. (Kolodrubetz, 1969) According to a recent survey by the Bureau of Labor Statistics (2017), now more than 75% of workers have access to PTO. However, only the last decade has begun to show employee benefits that meet the needs and desires of the 21st century worker.
Flexible Work Options
Workers want control over when and where they work. The fear of infection made US workers more cautious about how they interface. The costs of commuting to work and child care influence this, too. Pre-pandemic, 1 in 67 jobs was remote, but today, an average of 1 in 7 jobs are fully remote. (60 Minutes, 2022) What began as a critical need for health and safety has been embraced as a permanent feature. For similar reasons, workers want more control over when they work and take time off.
Competitive employers have responded to this by including flexible work arrangements as part of their benefits and perks. This includes offerings like remote and hybrid work, the ability to set one’s own schedule, and generous or unlimited PTO.
Business owners tend to think of time off as an expense, and that’s not wrong. Absence can slow down overall efficiency, but the cost of employee burnout is much higher.
What might be the best-case scenario is an annual loss of about 35% of the absentee’s salary. (Deonarine, 2021) From there it gets extreme, fast. In the US alone, employee burnout can cost upwards of $200B every year because an employee incurs a physical injury or mental distress under the pressure of burnout. (Garton, 2017) In one of the worst recent cases, a telecom CEO and his management received conviction, fines, and jail time for the suicides of multiple employees. (Vaux-Montagny, 2019)
A More Accessible Paycheck
Years ago, workers were given a paycheck, in person, each pay period. That check was cashed or deposited at a bank, during bank hours. Now, it’s more convenient for workers to receive their pay as a direct deposit to the bank account of their choice. In fact, a survey by American Payroll Association found that about 94% of workers receive pay via direct deposit. (‘"Getting Paid in America’ Survey Results,” 2020)
Still, it lacks the convenience important to workers today. Americans are trying to regain financial stability while 3 in 5 individuals live paycheck to paycheck, just making ends meet. (LendingClub Corporation, 2022) This financial stress is found at both ends of the salary spectrum. To mitigate this financial stress, more than 60% of younger workers are interested in some form of early access to wages. (Thier, 2022)
Earned Wage Access (EWA) is an easy way for employees to access money they’ve already earned, before a traditional payday. This is a no-cost benefit for employers to implement as a means of attracting new talent and retaining current talent. When an unplanned expense does pop up, workers are able to manage it without delay, without overdraft fees, and without loans.
A common employer-sponsored healthcare package will include medical and disability insurance, coverage for dental and vision, and often, paid parental leave. Yet the mental and emotional toll Americans have felt as a result of COVID-19 drives workers to ask for more.
Workers want to be healthy and happy all the way around so companies are adding attractive perks such as mental health and counseling, gym memberships, and sometimes even grocery delivery services. In competitive examples, this might extend to caregiving services, family services, substance abuse resources, financial services, and even legal advice.
Lifestyle and Development
A worker today is more likely to get a job that fits their life, and not a life that fits their job, as previous generations have done. Job seekers are attentive to company culture and consider this when accepting a position. The 21st century worker is attracted to companies that sustain diversity among colleagues, and that promote equity and inclusion.
Recent findings from ADP Research Institute indicate that employees are 75 times more likely to be engaged and present workers when they feel a personal connection to colleagues and management. (Hayes, Chumney, & Buckingham, 2021) Employers in the War for Talent are responding with team building activities, strategic transparency, and open meetings where employees feel seen, heard, and valued.
Another way employers are ensuring their workers feel valued is by investing in their professional development. Some companies, like Apple, keep it close to home and require the worker to pursue education and training that supports their development within the company. Some, like Amazon and Starbucks, will cover 95-100% of tuition costs for a bachelor’s degree in any discipline. (Haslam, 2022)
For some businesses, full college tuition isn’t something they can offer, but that doesn’t mean they can’t use professional development as an attractive benefit for workers. Employers can also sponsor online courses and certifications at discount, or offer employees paid subscriptions to online learning platforms like Coursera or Udemy. Access to webinars or events that promote professional development are seen as not only an excellent tool for education and training, but also networking.
How the Employer Benefits
What happens to companies when they prioritize new worker needs? What happens when they don’t?
Some employers might think that expanding benefits and perks is too expensive, but they may not actually calculate the cost. Benefits providers can work with existing programs and provide better tools and resources that fit new employee needs with little or no additional cost.
A common place to begin gathering data on what workers want, is to ask the workers themselves. Competitive employers will conduct a benefits survey, asking employees about their experience and satisfaction with current benefits and perks. This survey usually shares ideas about benefits and perks that the company plans to explore, and whether those are desired among workers. Business owners may be surprised to find that the cost will be minimal to add the benefits and perks staff really want. The real cost is ignoring the demand.
Don’t Lose Talent to a Trend
The labor market has seen some interesting trends over the last two years. The Big Quit marked a massive amount of workers suddenly uprooting from current jobs and leaving in search of greater opportunities. Job seekers with the pains of pandemic still fresh in their minds, opted out of unfulfilling work that led to burnout and started looking for jobs that offer an improved quality of life.
More recently there’s been attention to Quiet Quitting, a labor movement stemming from younger workers who are fed up with putting in extra time and effort at work for what they feel is a lack of compensation. Instead, there is a general feeling of being taken advantage of, overworked, and underappreciated. Employee burnout pervades. Rather than taking the risky leap to resign, workers are “quiet quitting”, or performing at bare minimum; enough to skate by but still receive a paycheck. Employees are “phoning it in”, disengaged from work goals and culture and not psychologically committed to their work. The consequences for businesses can be detrimental.
Globally, a lack of work engagement like that seen in the Big Quit and Quiet Quitting is costing $7.8T in productivity. However, a genuinely engaged team is a valuable competitive edge. Finding ways to engage employees and ensure they feel valued can deliver upwards of 20% higher profitability, and anywhere from 18-40% reduction in turnover. (Pendell, 2022)
It may seem simple to replace a worker quickly, afterall the market is flooded with qualified job seekers. But if employers aren’t actively providing an environment that fosters engagement, loyalty, and motivation, a new hire can come and go before the business has recuperated costs on recruiting and training. Turnover can cost from 30%-150% of that worker’s salary, a figure that gets very serious very fast, especially for companies with higher turnover rates. (Hall, 2019)
According to a 2022 study by MetLife, 80% of employers think it’s important to address changing employee needs with modern benefits and perks. When they do, workers are upwards of 2x more likely to stay within the company, reducing turnover costs, increasing productivity, and eliminating the stress and burnout placed on other colleagues who pick up the slack when a worker leaves. (“The Rise of the Whole Employee,” 2021)
The War for Talent requires powerful ammunition and for employers, that’s a robust and comprehensive suite of benefits. Adding perks that offer flexibility, control, and self-development are attracting, motivating, and retaining the workforce’s newest generations.
It’s often said that we get out of something what we put into it. This is true for employers and workers alike, who sift and sort for one another through an ambiguous economic stretch.
Workers search enthusiastically for companies that support modern values and needs and in return they bring their best skills to the table with genuine engagement, loyalty, and productivity.
The old way of doing things isn’t always the best way and employers are realizing employees want new ways to manage the work-life balance, lead meaningful careers, and establish holistic health and security. In return, employers see significant cost reductions in recruitment, turnover, and burnout. They see higher employee engagement and productivity.
For employers and their staff, embracing the demands of a new workforce is the ultimate benefit.