The COVID-19 pandemic brought many changes that basically influenced every aspect of our lives. And this same change cuts through how employers manage their employees, what benefits to offer, and more dynamic strategies to use when recruiting more hands from the talent pool.
For example, there was a time when in-office recruitment was a thing. Infact, only 6% of Americans were working from home pre-pandemic. But now, remote working has taken the stage. 81% of job seekers now prefer companies that encourage remote-working.
Likewise, employees are beginning to desire more flexible, personalized benefits and not just high-paying opportunities. Anything other than this will only result in continuous resignation or a drop in productivity.
In this article, we will explore what personalized benefits are all about, and how to use them right.
What are personalized employee benefits?
Personalized employee benefits are a form of indirect compensation and perks that are outside of the agreed wage or salary live party and travel tickets, access to some interesting gadgets, design tools, performance awards, tuition funding, student loan assistance, etc.
It could also be a budget for professional training or upskilling programs that are beneficial to the company in the long run. Some of these benefits are mandatory by law, such as Health insurance in America. Others are discretionary, and the decision whether to use them or not is up to you as an employer.
Beyond the legal and discretionary benefits, there’s a new third wheel - personalized benefits. Unlike the legally approved and discretionary benefits, the personalized package gives your employees a say in deciding what type of package they want.
For example, your country’s laws might mandate you to provide health and disability insurance. You too might decide to add a Paid Time Off to help boost productivity. Both of these will surely contribute to a positive working experience. However, they might not really be what your employees want.
On the flip side, personalized benefit packages fully rely on the inputs, painpoints and needs of your potential workers or existing employees. So it’s not just a random decision and neither are you following a fixed baseline set by your location.
How do personalized employee benefits affect your business?
Personalization is the key to achieving a breakthrough in every industry. In the past, B2B and B2C companies only implemented this approach in their content production.
But now, businesses can integrate the same method into their recruitment strategy and use it to retain their exceptional talents.
Here are three ways personalized benefits can take your business an inch further.
1. Employee satisfaction and enhanced productivity
Employee satisfaction is one of the current causes of headache for businesses. And reduced satisfaction can directly or indirectly impact productivity. As the saying goes, happy employees are happy workers.
By offering personalized benefits and different packages of relevant perks, you can boost your worker satisfaction. Moreover, satisfaction has a good link to loyalty. When your employees are loyal, they tend to put in their best in executing whatever task is assigned to them.
2. Increased employee retention
Happy employees are not just happy workers - they also stay. When you offer a listening ear and respond with a tailored benefits package, you don’t need to be worried about losing your most skilled employee.
For example, close to 91% of Gen Z prefer a company that offers mental health benefits. Addressing this need as soon as possible can make you a better employer even if you pay less compared to your competitors in the recruiting market. Your talents will also have less reasons to ditch your job offer or tender their resignation letters.
3. Reduced cost per hire
This is one crucial point that has a huge influence on your expenditures. Cost per hire goes beyond just the wage or salary. For example, Buffer has a habit of giving their new employees $500 and a laptop to help them setup their remote office.
Other companies have their own onboarding packages of all sorts. If you’re unable to keep your talents, then it means you have to keep dishing out freebies to every new employee while exhausting your capital.
Posting your job openings on platforms like LinkedIn also increases your cost per hire. And all of these can be avoided by personalizing your employee benefits package.
Key components of an employee benefits package
Major components of an employee benefits package include health insurance, retirement plans, and Paid Time Off. Others, like location-bound perks and life insurance, are also becoming the norm.
So let’s see what they are all about.
1. Health Insurance
Treatment for an uncomplicated leg fracture can be as high as $10,000 or more in some regions like Hawai. In other countries, the cost of visiting the clinic even once a month can be anywhere from $100 to $500.
Now imagine if your employees only get paid an average of $700 a month. That means about 30 to 60% of their salary is going for monthly health management.
But with a health insurance benefit in place, your workers don’t have to be overly bothered about using a huge chunk of their income on medical checkups or emergencies.
2. Retirement plans
Retirement plans go beyond just monetary value alone. Nowadays, companies educate and encourage their workers on better options to save ahead of retirement. A common example of this is by having your employees invest in the company’s stock and bonds. These assets can be very beneficial to them after retirement.
In some cases, you might decide to use the 401(k) plan, which ensures your employees are contributing a part of their salary to a retirement account. Some employers often decide to assist with the contribution.
3. Paid Time Off (PTO)
PTO is not a new thing. However, it has gained more traction post-pandemic. While there are legal and agreed periods of the year when employees can take a paid break, a few unforeseen changes like health emergencies can make your employees request an unplanned time-out.
In such situations, you might want to ensure there is still undisturbed compensation.
4. Disability and life insurance
Disability insurance takes care of expenses that arise as a result of sudden disability of an employee. This can be medical costs and even therapy or rehabilitation bills. The extent of this insurance is usually dependent on if it is a short-term or long-term disability.
Life insurance basically covers post-death expenses of an employee. For example, funeral bills and support funds for people who depend on the employee for a living.
5. Personalized remote or in-office work stipend
Personalized in-office benefits could be anything from free lunch, using a company vehicle for commuting, or getting a daily stipend for expenses like car fueling to data subscriptions.
For remote workers, companies like Buffer provide employees with a fixed amount and a functional laptop to help them set up a remote office - at home or anywhere else.
6. Learning or skill development opportunities
Offering learning and skill development opportunities as part of an employee benefits package is a valuable strategy for organizations seeking to attract and retain talented employees.
Providing your employees with opportunities to enhance their knowledge and skills, can help companies foster a culture of continuous learning and professional growth.
The learning and skill development opportunities could be anything from training programs, professional certifications, tuition reimbursement or providing access to design tools like Canva, Adobe Illustrator, or Procreate (along with Procreate brushes free download).
How to create personalized employee benefits package
We’ve explored the vital impact of personalized employee benefits on businesses. And to create one, you need to follow the steps below.
1. Assessing employee needs
We said earlier that personalized benefits are different from mandatory and discretionary ones. This is because you are bringing your employees into the decision-making stage.
In order to assess what your employees need most, you need to roll out a survey. The survey should ask questions like:
- On a scale of 10, how satisfied are you with the current employee benefits package?
- Are you satisfied with the coverage capacity of the 401k retirement plan?
- Will you be satisfied with contributing a part of your salary for additional benefits?
- Do you prefer a fixed but higher salary or the usual salary with some additional benefits?
- How competitive is our benefits package compared to other competitors?
- Do you have something that you would like to add to your benefits package?
- What part of the package do you think is redundant and should be removed?
These questions target your employees’ pain points and are crafted to help them communicate their opinion. You can also customize more lines or restructure to fit your industry purposes.
2. Researching industry standards
Now that you know what your employees want, you also need to find out what other companies offer. You can do this by visiting their official website and scrolling through the job board.
Some companies keep this information to themselves. So you might need to reach out to an employee and ask them directly. Another way is to create a survey directed toward business owners and workers in your niche or region.
3. Identifying core benefits
Compile the results of your research and group each input into the different categories of benefits we’ve discussed above. Then analyze which ones are top priorities and should be worked on first.
Let’s say your most received input is “work stipend”. Then that’s one of the core benefits that you should readily invest in.
4. Customizing additional benefits
Additional benefits are those that might not necessarily be the top inputs from your survey, but are equally important and play a huge role in employee satisfaction. It could be about providing a free lunch ticket for every workday or once in a while.
Others include allocating funds for internet data, morning coffee, wellness programs, office snacks, and sports tickets. Although they are not as extensive as health and life insurance, they encourage your employees on duty.
5. Considering financial constraints
This is a roadblock for most startups. You need to assess your financial capabilities and see how much benefits you can offer in the long run without breaking the bank. On a better note, you should start with a single benefit outside the ones mandatory by law.
Gradually add more perks as the company grows. You might also decide to have your employees contribute a part of their wages for additional benefits. However, it should entirely be their option, not forced.
6. Communicating the benefits package
Once these benefits are ready, you need to inform your employees immediately. Often, most workers are unaware of the benefits their company offers. And they tend to find out later - which is not okay.
Your benefits package should also be on your job board and should be communicated with potential employees. This will help you attract more talent and shorten the recruitment period.
7. Seeking professional guidance
Having a professional to help you set things in stone is very helpful, especially for new businesses. That way, employers can avoid going bankrupt, providing unsatisfying benefits, or providing too many perks.
You should get someone with a sound track record of helping businesses with their benefits proposition. Communicate your plans and discuss possible loopholes that might also legally implicate your brand.
8. Obtaining employee feedback
Employee feedback is necessary to figure out how effective your new benefits package is. The best way to do this is by sending out a survey to each worker. Of course, you can also use metrics such as productivity to measure effectiveness.
Satisfied workers are more productive and have increased performance at work. Once you have your reports on desk, fix what’s needed immediately and carry your employees along with the changes.
9. Regular review and adjustments
Most companies make the mistake of rolling out their package and leaving it there for a few years. Conversely, you need to review the benefits offered at least twice a year. As time changes, what people want also changes and your offers must not lag behind.
Send out a survey and collect employee feedback occasionally. This will make your employees feel appreciated and included since their employer constantly wants the best for them.
Gone are those days when the only form of compensation was a monthly salary. Now, jobseekers want companies that can provide additional benefits even as far up to student loans and parental leave.
What’s interesting is that, businesses must meet these needs. But that doesn’t mean you should go bankrupt in the process. By personalizing your benefits package, you can avoid overspending and focus on providing the perks that really matter.
First off, dig out what your employees think and research the current industry standard. Afterwards, implement these changes and ask for feedback while also considering your financial constraints. Lastly, seek professional guidance, and review your packages constantly.