Walk into most tech company office spaces in Silicon Valley and you’re likely to find employees taking advantage of nontraditional benefits such as free meals, nap rooms, unlimited vacation time and beer on tap. The trend has become so profound that many of these benefits have crept into other industries. For a lot of firms, these benefits are now considered normal.
Still, when it comes to what employee benefits are linked to long-term employee satisfaction, these flashy benefits aren’t necessarily worth it, according to data from employer-review site Glassdoor, which shows that these perks have “a surprisingly weak correlation with employee satisfaction.”
Core Benefits, Like Heath Care, Matter Most
When employees rate a company on Glassdoor, they do so via a five-star scale for overall company satisfaction and for benefits. Glassdoor’s research included site data from June 2014 to September 2015. During that time, as employees rate various benefits, a one-star ratings increase in satisfaction of their health insurance affects overall employee satisfaction with their benefits packages by 0.34 stars. Additionally, a one-star increase in satisfaction of their 401(k) plan changes overall benefits satisfaction by 0.08 stars and increased vacation and paid time off benefits satisfaction affects overall satisfaction by 0.05 stars. Beyond that, other benefits offered were not statistically significant in their impact on overall benefits satisfaction ratings.
To be sure, employees are likely to value other benefits beyond these three, but what really keeps them satisfied in the long-term are those typically included in a traditional compensation package said Andrew Chamberlain, Glassdoor’s chief economist who authored the study. Over time, the employee satisfaction gained by the expansion of nontraditional perks eventually fades.
“I believe that as the tech industry’s growth rates slow down, you’ll see them reassess, go to employees and ask them what they value. And what they’re probably going to find is what we found,” Chamberlain said.
Nontraditional Perks Play Special Role
This isn’t to say that nontraditional perks are valuable. Some employees will value certain benefits more than others. And to some experts, determining a benefit’s value comes down to assessing a few different variables.
The lifecycle of the company is one variable, according to Josh Bersin, principal and founder of research and advisory firm Bersin by Deloitte. Younger talent new to the working world, for example, will likely be more enamored with such nontraditional perks.
“They’re [young talent is] attracted by bright and shiny objects,” Bersin said.
Another is the amount of time employees are expected to work in the office. According to Gallup’s 2013 and 2014 Work and Education polls, Americans spent an average of 47 hours per week working. Naturally, being connected to work for more hours each day means less time to take care of personal errands and other responsibilities. “If the employer doesn’t give us the flexibility in the work environment to actually eat well, sleep well, rest, get a little bit of exercise, have a little bit of fun, we’ll all have heart attacks and die early,” Bersin said. In the end, though, a main reason for employees to stay at their company is because they feel respected and fairly compensated. “When it’s all said and done, what really matters the most is culture, management, the job itself, fairness, a feeling of belonging,” Bersin said.
Then there’s culture. Some companies can use their core benefits and additional perks to create a desired culture, such as employees feeling like they’re part of a cohesive team. “To me, the benefits of all those flashy perks, however you slice and dice them, it all comes down to building relationships through human interaction,” said Mark Sawyier, co-founder and CEO of Bonfyre Inc., an employee engagement software company based in St. Louis. His office has both a pool table and ping-pong table, things he said has fostered a more familial culture at his company.
“I know it works because I know so much about the people that work here,” Sawyier said. Sawyier has made a conscious effort, however, to use these social games for relationship building. “If you’re just getting a pool table to get a pool table, more likely your pool table will just be a pool table and just an empty, flashy perk,” Sawyier said.
Bonfyre also has a program called Fuel the Fyre, in which each of the company’s 29 employees can use $1,000 on community, wellness or professional development. While about 60 percent of the firm’s employees choose to use this money on wellness, 29 percent use the funds for professional development and 11 percent put it toward philanthropy.
“Ultimately, I think it’s important in large part because at the root of it, it’s about empowerment. It’s about saying we care about you as more than just an employee; we care about you as a human being,” Sawyier said.
So, are nontraditional, sometimes flashy, benefits worth it? The decision often comes down to the structure and culture of a given company.
Lauren Dixon is an associate editor at Talent Economy.Filed under: Talent EconomyTagged with: 401(k), benefits, business, health care, health insurance, pto, retirement, ROI, work