Tech companies have become known for their unconventional benefits packages, which seem to attract envy and disdain from the general public in equal measure. Recently Eleanor Wilson-Holt published an article on egg-freezing which put this most recent addition to the Apple and Facebook employee benefits under the telescope. Other recent quirky perks include Google’s ball pits and AirBnB’s "Moustache Mondays" where (yes, you guessed it) everyone at work wears a fake tache...
These examples may fall under the 'sublime to the ridiculous' category, but they do raise a wider question about employee benefits more generally. What is the nature and rationale behind them? What impact do they really have on our employment? Do they also have an impact on our lives outside of work?
Employee perks can reduce turnover rates
There are real cost-saving arguments in support of competitive benefits packages. Staff turnover rates can be reduced by as much as 50% simply by rewarding employees in the right way. The CIPD estimates that the average turnover cost per employee is £8200, with this number rising for senior managers and directors. If the research that competitive employee benefits packages genuinely minimise company turnover rates is correct, the benefits of potential savings in recruitment costs and the value of having a workforce with a deep knowledge of the business arguably outweigh the costs of providing these benefits. This point was in play in the Facebook / Apple egg-freezing offer (however negatively it may have been received by certain quarters): by giving employees a benefit that makes it easier for their job and their personal life to co-exist, employees are more likely to make the choice to remain in their employment.
Feeling valued is linked to job satisfaction
Although people look for meaning in their work and job satisfaction is clearly not just about free food and sleep pods, benefits certainly go some way towards showing employees that they are valued. According to MedLife's 12th Annual Survey into Employee Benefit Trends, those satisfied with their benefits packages are more than twice as likely to be satisfied with their jobs. 75% of those employees were also satisfied with their jobs, as compared to the remaining 25% of people who were neither happy with their benefits nor their jobs. There is a strong and clear correlation between job satisfaction and benefits satisfaction. This is likely to get stronger as Generation Y moves further into the centre of the working market, since they have already been proven to care deeply about their employment image, branding and workplace culture.
With increased job satisfaction you get a more loyal workforce
Showing your employees that you care by treating them well enhances their loyalty, productivity and happiness – which are benefits from both a commercial and personal perspective. High job satisfaction generally results in a more productive, engaged and loyal workforce. In fact (and perhaps unsurprisingly), committed employees are likely to put in 57% more effort than uncommitted employees (Bob Nelson, "1001 Ways to Reward Employees"). Further, a highly engaged workforce can help the company generate as much as 29% more revenue according to the Right Management survey.
Most people spend more time at work than doing any other activity in their lives. Perks and benefits undoubtedly make employees' lives easier, especially in highly competitive and stressful professions. But they also help the company create a happy and thriving workforce, which cannot be underestimated in enhancing its success. The power behind employee benefits from both a business and a personal perspective should not be underestimated.