Why Salary is Simply NOT Enough

“Recruiters sometimes have their wires crossed when it comes to what Millennials really want at work… many Millennials are more excited about growing and thriving at a company that appreciates their talent and will help them continue to learn.” — Kathryn Minshew, CEO and founder of The Muse, a career development platform

Long gone are the days when simply offering a good wage was sufficient to recruit and retain top-notch employees. Today’s workforce, largely consisting of Millennials, not only requires but demands that employers take numerous factors into consideration when considering the entire compensation and benefits package they offer. It’s not just an issue affecting payroll anymore. The Human Resources function must now consider a wider range of benefits than they ever considered for Baby Boomers.

Think a high salary should be enough? Think again.

Having to hire a new employee (simply because the previous one was dissatisfied) can cost you thousands in lost skill sets and opportunity, not to mention time spent recruiting, interviewing and onboarding. Today’s strong job market is putting more pressure than ever before to not only lure but also keep the best talent as one-third of workers say they would leave their job for specific perks, according to the Gallup organization.

What makes for an “enticing” work environment these days? According to Gallup, employees are most likely to say they would “change jobs for benefits and perks related to quality of life.” To further help business owners and HR leaders identify how their total compensation package stacks up against what today’s employees want (or expect to receive) from their employer, Gallup has identified four categories:

  1. Basics: benefits that most companies offer
  2. Important to some: benefits that fewer organizations offer and a segment of employees say they would change jobs to receive
  3. Differentiating: benefits that a segment of companies offer that correlate most highly with employee engagement and well-being
  4. Added value: benefits that some organizations offer that also correlate with employee engagement and well-being but that employees are less likely to say they would change jobs to receive

The question to you, as a small business owner, is – are you offering any, some or ALL of these benefit categories to keep your workforce engaged? While great health benefits are also a plus, as you can see, today’s employees have expanded their wish list, and as long as the economy stays strong and remains a job hunter’s market, savvy business owners must step up their game. One of the best ways to do that is to engage with a Professional Employer Organization to ensure they are offering and managing the type of benefits desired today. Leveraging multiple non-salary factors will allow you to assemble and keep a team of dedicated and motivated employees.

While it might be tempting to lump benefits and perks together, they are actually two distinct things. Benefits should be seen as additional forms of compensation such as health insurance, retirement plans, company 401(k) matches and stock options. On the other hand, perks focus on things that help employees be happier, healthier and more productive. Perks can range from gym memberships, tuition reimbursement, company cars, and staff parties to flexible working locations and hours. The well-known job review web site, Glassdoor, reports that job seekers are doing more research as they evaluate potential employers, and 57 percent say that benefits and perks are their top considerations before accepting a job.

The monthly business magazine, Fast Company, says that the top benefits employees want are vacation or time off, performance bonuses, paid (preferably unlimited) sick days and defined contribution retirement plans as defined benefit plans have become more expensive for most employers.

Global employment web site, Monster.com, reports that employers should remember that certain benefits might be seen as more or less important based on salaries – those with lower salaries are likely to place a greater weight on healthcare, while those with higher incomes might prioritize vacation time. And, according to Monster, employee gender also has an impact. Men “tend to” place more importance on compensation and bonuses while women “tend to” prioritize vacation time. And, of course, while life insurance is very important to some employees, at certain stages of life, benefits such as maternity (and paternity) leave should be kept in mind depending on the age of your workforce.

Robert Half International has ranked the top five perks that can improve recruitment and retention:

  1. Workplace wellness programs – any way to alleviate stress and improve employee health will no doubt make employees happier but will have long term effects on potential benefit claims
  2. Free food – any types of snacks and good coffee are always appreciated by employees
  3. Mobile working – any ability to work from home is always highly prized as is allowing employees to work anywhere in the office because it can encourage collaboration
  4. Concierge services – any perk that saves employees time such as on-site dry-cleaning pickup means less time is spent outside work running errands and more time is spent with family
  5. Travel perks – anything to lessen the financial burden by providing free or subsidized parking or public transportation reimbursement

And, last but not least … it’s important to keep in mind that your company’s location and size may be the perk that draws and keeps good employees. If your housing market is affordable, the public schools are of good quality and if local attractions are plentiful – then those perks are something you don’t have to pay for; they are already built into your organization’s benefit package. Working for a small company can be just as meaningful if employees know they have a recognizable stake in how the business operates and/or have an opportunity to learn different skills that may be given to them by faster lateral or vertical moves within a small organization.

If your location is NOT drawing the talent you need, careful structuring of flexible telecommuting options can attract quality employees from anywhere. Flexibility can be also provided in various formats – from alternative work schedules to time off. More and more employees desire (and value) flexibility in their work because it allows them to balance their work and their personal work demands. Whether it’s raising a young family, supporting aging parents or spending time with their fur babies, hobbies or volunteer activities – the point is simple. Today’s employees no longer want their employer to blindly dictate to them what benefit or perk is considered important to them. So, even if it is something as simple as allowing casual dress or allowing an employee to bring their pet to work … the sky is literally the limit when it comes to making today’s employees happy and productive.