Employee Benefits in a Capitalist World
Do you remember the first time you got your company's car to pick you up? Or the fancy 5-star hotel you got access to because your work project is outside the main office? Or how easy it was to get reimbursed for your spectacles? How about the flexibility to not come to the office at all? These are some of the benefits companies have been using for a long time to retain you by making you feel valued.
It is a well-known fact that you should take care of your employees first so they will take care of customers, and eventually, the company will take care of itself. Don’t you agree?
Employee benefits have, however, undergone series of changes before getting to their current stages and are still evolving. The simple reason for this is Gen Z won't like what attracted boomers.
According to an HR expert, benefits form 20-25% of the consideration set for employees to choose between similar organizations.
But how did these benefits start in a capitalist world?
A popular rumor holds that non-wage employee benefits arose in response to rationing during World War II. The story suggests that unable to raise salaries in order to attract or retain talent, employers instead devised a variety of benefit programs, ranging from healthcare sponsorship to defined contribution plans.
While there is some truth to the idea that wartime economics led to a growth in the popularity of benefits programs, their existence predates World War II by generations.
It started during the Industrial revolution. Employers needed a way to manage an aging workforce, while workers sought some form of insurance against aging past their prime working years, without a family farm to generate income. Retirement plans were the dominant employee benefits in the early 20th century right up until World War II broke out. The emergence was very similar in Europe as well.
The new set of benefits started emerging with startups gaining popularity. Different generations preferred different kinds of benefits. With Facebook and Google providing the flexibility to work the way you want to, the entire Silicon Valley started adopting that culture.
According to a study by Benify, the following were the most important benefits for different generations(in order of priority).
Now with the advent of remote work and increase in its acceptance, benefits are again undergoing a change. Some of the remote specific benefits that employees are asking for are as follows:
Home office equipment: Your fancy chair worked when you had to work for 2-3 hours at home but now you need a comfortable chair so that your back still remains with you after 5 years. Laptop, chair, desk, etc. are some of the equipment employers are increasingly providing to their workers to enable working from home.
Co-working space and travel: Once the dust settles, it might be difficult for some to sit and work from home for all days. Co-working space provides a good change of environment and also lets employees meet different people. Employers are paying for the space and sometimes, also reimbursing the travel expenses.
Offsites: Offsites and money to travel to different places to meet colleagues is getting common.
Online learning and development courses: Constant development of employees has become important for both employers and employees. Three-quarters of companies offered to cover additional training and education for their employees in 1996. Now 86 percent of employers offer this benefit, encouraging more workers to continue learning and adding to their skill sets.
Wellness benefits: Post pandemic, people have become more aware of their health and asking for gym memberships, mental health support, etc.
A few other companies have come up with unique perks like Pacaso in addition to the equity also offers a $25,000 credit toward the purchase of a Pacaso home, unlimited vacation, a $700 stipend to outfit a home office. The video technology company OneDay reimburses employees for a stay at a destination away from home where they’ll work remotely.
Companies are saving a lot due to remote work (Google's estimated savings are $1 Bn annually) and some part of this will go to benefits with workers asking for more of them.
Companies are differentiating themselves by providing the above benefits along with better health insurance plans, social security, and flexibility to work from anywhere. Benefits are going to further evolve with newer generations coming and with all other things standardized, this can be a good way for companies to make their workers feel special.