How can you hold on to your top performers and attract new ones? One of the best ways is to offer amazing employee benefits.
How do we ensure that people do not want to leave? That’s the essence of retention in a nutshell. Benefits are only one part of retention, but they are an important part that I’m going to explore in this post.
What are Employee Benefits?
When you say ‘employee benefit’ some people immediately think of stock options, gym memberships or health insurance. But what I’m talking about are the non-monetary rewards that employees get for working with you. That may include things like stock options, gym memberships, and health insurance, but it can also involve a lot of other things that involve very little, or zero, cost to businesses.
Benefit programmes are not just for large corporations. You may be surprised how many you already offer but you haven’t considered them as ‘benefits’ before. From the point of view of your employees, benefits are what makes you different, as an employer, from other businesses in your industry.
Benefits are what makes you different, as an employer, from other businesses in your industry.
For example, we had a professional services client, that gave each employee a free day, once per month, for nonbillable hours. So a whole day every month, during which they could do admin or catch-up work. This may not sound like an obvious benefit, but to people that are used to providing 85% or more billable hours, that was actually a really big benefit. It gave them time to catch up without feeling pressured to hit a particular KPI for that day.
Importantly, this sort of benefit says a lot about the organisation’s culture. It shows that at this firm, it’s important for employees to be able to release the pressure valve, to reset and reframe. It means the organisation cares about wellbeing. It says, yes, we are a professional services firm, we dol need a certain percentage of billable hours. However, we’re giving you one day per month to get this stuff done.
This is a huge point of difference when compared to other firms that don’t allow an admin day. People are forced to catch up in their personal time.
12 Benefits to Boost Employee Retention
There are 12 common benefits that are almost always highly valued by employees. It doesn’t matter what industry you’re in, or the size of your business.
As I go through these 12, imagine that not only do you offer these in your business, but you have them listed in a professionally designed booklet that is given to potential employees. I want you to imagine that because, later in this post, I’m going to look at how to market these benefits.
1. Flexible working
It may not surprise you that this is always one of the top benefits cited by employees. Since we have gone through the last two years, this has become even more important to people. And it’s not just about working from home, it’s in relation to the location of the work, but also the hours and the days.
As we’ve seen, over the last few years, a lot of people have really started to reset their thinking on what’s important. That makes flexibility even more important to them so that they can do things like go to the gym in the afternoon, pick up their kids from school or just go for a walk.
2. Volunteer day
A lot of big organisations do this, but it can be done by smaller businesses as well. It’s as simple as one free leave day per year where the employee can volunteer for a charitable organisation. You might allow each employee to pick their own organisation, or you may do it as more of a team-building exercise where you all go and volunteer somewhere.
This is an important benefit because it helps to cement the purpose of your business. If you have a particular industry or client base that you’re working with, and there’s a really good fit with a volunteer organisation, then that can help to cement it.
For example, if you are a pet food company, you might organise for your team to volunteer at an animal shelter. Things that are clearly connected to the workplace can really help people to feel your embedded purpose.
Generation Y and Z feel a strong need to contribute to society, and have a positive impact as a business and as employees. So having a volunteer day could help employees feel that they’re positively contributing to our society.
3. Additional employer superannuation
This one may sound a bit boring, but depending on your workforce, and your demographics, this can actually make a huge difference. In Australia, employers have to pay employees a certain amount of superannuation every month or every fortnight, depending on the pay cycle, into superannuation.
A scheme where you pay an additional rate on top of the government statutory amount, especially if you have an older workforce, is seen as a huge benefit. Once people hit their 40s, and they start getting financial planners, and they start finding out how much money they need to retire, this becomes really important.
You can also pay superannuation during unpaid parental leave. This is a great way to attract women into your workforce, and to show that, as a business, you really care about equality.
We know that women are much more likely to end their working lives with nowhere near the amount of money required, particularly in comparison to their male counterparts. One of the contributing factors is that women take time out of the workforce to have children and then sometimes return to lower paid work afterwards. This reduces the amount of money available to them in retirement. So paying superannuation during that unpaid portion of parental leave can assist with that.
4. Purchased leave
Like flexible work arrangements, offering purchased leave shows your employees that you understand there are other things going on in their lives besides working in your business. It works by paying employees for 48 weeks of their salary across 52 weeks, which means that they can access an additional four weeks of leave for the year.
Sometimes this can be hard to get your head around. It just means that instead of having the normal four weeks of annual leave per year, an employee gets eight weeks of leave per year, four of which are unpaid. However the reduction in pay is spread over the entire year.
An employee can take eight weeks off per year, which is a huge benefit in itself, but they also don’t feel it financially, because the four weeks of unpaid leave is spread across the whole year.
A lot of businesses get a bit nervous about this one. They think, ‘what happens if everybody wants to do it?’ But it’s all about having a process and a policy in place. Some structures you can set up around this include:
Have a leave calendar
Approve and allocate this kind of leave just once per year
Ensure everyone in the team agrees on when the leave can be taken over the next 12 months
Ensure employees take other kinds of leave first, such as long service leave, or accrued leave.
Ultimately, this has to be at the discretion of the business, as this kind of leave might be difficult to manage for some kinds of roles. I find that there are actually not a lot of employees that sign up for it. However, the ones that do really value it, and even the ones that don’t use it, think it’s great that the business offers it.
This is one of my favourite benefits, because it’s a bit of a sleeper. There aren’t a lot of companies that offer it because they’re nervous about it, but it’s actually not difficult to put in place.
5. Tenure-based bonus leave
This one is fantastic if you want to reward staff members that are staying with you in the longer term. If you’re having issues around turnover, or you’re looking for ways to get longer tenure out of our employees, this one is great, because everyone loves extra leave.
It works like this: after two years of service, you get an additional two days of bonus leave for the year. And you can keep going up, three years of service creates three days of annual leave, four years, four days. You can cap it at five years with an additional five days.
Just as with purchased leave, you need to have a process and a policy around this because it needs to be manageable. To make all the accountants happy, let me emphasise that you don’t accrue this leave, it’s ‘use it or lose it’ leave. It’s not legislated so it doesn’t need to be accrued.
After two years of service, employees get an extra two days over the next 12 months. And if they don’t use it, it’s gone. And the following year, when they hit three years of service, they get three days of extra leave, but they can’t add in unused days from the year before. So that helps to keep the financial people happy. It also means that you’re encouraging employees to use it. If your employees are not using the leave, they’re not going to see it as a benefit.
6. Employee assistance programme
An employee assistance programme (EAP) engages a professional organisation that has counsellors and therapists who provide free, confidential counselling for employees and their family members.
Unlike some of the other benefits, this one does cost money. Depending on the provider, it’s going to be $4000 to $5000 per year, or more. Not every EAP is the same. Some provide training and are much more proactive around mental wellbeing. So, rather than just providing counselling they offer resources about resilience and mental wellbeing as well.
These are the providers that I really like because the extra services say a lot about your culture. It shows you are willing to invest in people and that you understand that your employees are human beings. We all have problems from time to time and it shows you care about the wellbeing of your people.
7. Education assistance
This means contributing towards the cost of a diploma or a degree. It enables people to go back to university, or go to university for the first time, to study, which in itself takes a while. Therefore you’ll be retaining the person for longer, while they’re studying.
They also learn new skills while they’re studying, which can really benefit your business. It’s a very helpful benefit because the cost of university degrees has gone up over the last 10 years or so.
Again, you’ll need a policy or procedure around this, which may include clawback provisions. So if someone leaves within a certain amount of time, they need to pay the money back. And you may have a set budget for the year. This is not a benefit that lots of people are going to use, you may only have one or two people per year. But it may be one worth the investment and the allocation of funds.
8. Social events
We know the part of engagement is sharing social activities with our colleagues. You’ve heard of the whole ‘like, know and trust’ idea, and this certainly cements that. This benefit requires you to provide a budget and a schedule for social events throughout the year via a social committee, social group, social crew, whatever you want to call it.
Personally, I don’t love social committees, they always end up on the shoulders of the same people in every business. I think there’s better ways to do it. For example, one of our clients has split their whole organisation across the three senior managers. They’ve all got an equal number of randomised staff across the three senior managers. They’ve each given themselves a name, and these three groups are then responsible for organising activities.
Group one, let’s call them the Kookaburras, will do a social event for this quarter. Then group two, the Magpies, will do the social event for quarter two, and then the third group will do the third quarter, etc. And they get a little competitive around it. And they have a bit of fun trying to provide the best social activity of the year.
And all you need to do, in terms of benefits, is provide the budget, and then schedule it in.
9. Service awards
These recognise years of service and milestones of employment. So you may have a card, or it could be manager recognition for each year of service. If you want to go further, you can reward service by giving a gift, a gift voucher, or a bottle of wine to commemorate a particular milestone. You might choose to do this at one year, three years, five years, 10 years, etc.
10. Recognition programmes
Again, this is about providing a budget and a framework for recognising great work within the business. In a previous post, I talked about recognition programmes and how it can be difficult sometimes to get a recognition programme that suits everybody, along with providing some tips on meaningful appreciation programs.
11. Pet friendly
Usually pet-friendly policies relate to dogs, especially small dogs. Depending on whether you’re back to the office, you could develop an overarching pet-friendly policy, where people can bring their pets to work. Or you just do it a couple of times a year, with a ‘bring a dog to work day’. I find that people either really love this or are really ambivalent about it. Personally, although I’ve fostered dogs that I’ve been involved with a foster charity for animals, I’ve never owned a dog myself. So for me, I’d be more in the ambivalent camp.
For other people, dogs are like family members and it is just totally awesome for them to be able to take them to work, show them off, look at everyone else’s dogs. And it does bring a sense of fun and excitement and something different into the office.
12. Referral reward programme
With this benefit, I refer someone into the business for a job when there’s a vacancy. I say, ‘Hey, I think this person would be great for that role’. I get a financial reward but also, because I’m bringing someone I know into the business, I’m more likely to stay with the business myself because I like to work with people that I like.
The other benefit to the business is that it could save you a lot in recruitment fees. This is another benefit where it’s good to just have a very simple process policy around it. And this one can be a really huge benefit for both sides for the business and for the employees.
Now I asked you to imagine that you put all your employee benefits into a booklet. This is because we have to market these benefits to our current and also potential staff.
Part of putting these into a booklet is that the booklet becomes a tangible item that you can provide to potential employees and current employees. It helps market you as an employer to new employees, but it also helps the current employers remember what’s available to them, and reminds them that you really care and support them.
Before we do our booklet, we need to choose the benefits. How do you choose which ones to implement? Ask these questions:
What are the benefits that can be implemented quickly and easily? I’m all for keeping things simple.
What are the ones that we already have? You might have things set up in your business that you haven’t really thought about with a benefits lens. These need to go into your booklet as well.
What issues do you have at the moment? If you have issues with retention, then tenure-based leave is a really good option. If you have issues with staff returning from maternity leave, paying superannuation during that period, might be a good strategy.
What do your team members want? Simply ask them what they think would be really valuable, particularly if you have new team members. Ask them what benefits they had in their old organisations that they wish they had now.
Once you have the benefits together in a booklet, you can highlight one of the benefits when you have a monthly staff meeting or put out a newsletter. You remind people, for example, that there is tenure-based bonus leave available to them. You can say, ‘don’t forget, if you’re eligible, to take those days of leave’.
Remember, you don’t have to launch every benefit immediately. Even if you like every one of the 12 in this list, you can start with what you have, and add two or three new ones, then add to the list over time.
Also, new benefits often come onto the market so you need to keep looking around. Every time a new person comes into the business, ask them ‘are the things that you used to have in your last organisation that we don’t have here?’
The other part of doing all that is that you might discover that some of the benefits that you have, are not being accessed at all, and there’s not a lot of point in continuing with them. If you’re reviewing your benefits every 12 to 24 months, you can have a look at what else you can add in, but you can also review things that you’re currently doing that you really don’t need to be doing.
I would just add a caveat – removing benefits could become a point of contention. So even if employees are not using a benefit at all across the organisation, if we say okay, we’re not going to do it anymore, it feels like a loss.
I have worked with different businesses that had very high service-award values. Once upon a time, this was a common benefit and people could get thousands of dollars for hitting certain years of service. And then, over time, a lot of companies decided to lower the level of these kinds of awards.
So perhaps, previously, employees received a pen and $500. And now they just received $100 and a thank-you card. That $400 difference could have been reallocated by the business into other benefits, but employees don’t realise that or they just forget. Years later, people can still be talking about how the organisation became really cheap for cutting down the service awards from $500 to $100.
That’s why I caution against implementing every benefit straight away, because you actually want to have a programme that’s of the most value to your employees. Once you have implemented them, you need to be careful about removing them. Make sure you’ve really considered the pros and cons and consulted with everyone to let them know why you’re looking at removing a benefit.
Benefits of a Benefits Program
So those are some ideas for setting up a benefits programme, particularly in smaller organisations and, importantly, how to market your benefits to your current staff and potential new employees. A great benefits program means that the longer employees stay, the more they’ve got to lose if they leave.