Like salaries, an attractive benefits package can make or break a potential candidate's interest in a job.
In fact, a study by the U.S. Chamber of Commerce Foundation found that “more than half of millennials (56 percent) agreed that a quality benefits package influences their choice of employers and 63 percent say that benefits are an important reason in staying with an employer.”
As ever more companies look to diversify their talent, they're expanding and modernizing their benefits packages to appeal to a wider pool of applicants, as well.
So what exactly is a benefits package, what's considered a benefit (and, of those, what are some of the best benefits), what's not common as a benefit any longer, and how do you negotiate a better benefits package? Let's dive in.
A benefits package is a package of benefits to which employees are entitled. The U.S. Department of Labor’s Bureau of Labor Statistics defines benefits as “non-wage compensation provided to employees."
What are some employee benefits? The National Compensation Survey groups benefits into five separate categories:
The above five categories are indirect and non-cash forms of non-salary compensation that can vary by company. Companies provide benefits packages to create competitive overall compensation offerings for potential employees, and to retain existing talent.
They're also required to provide certain things, such as the following, which are required by federal or state law to provide:
Benefits are typically different from fringe perks, however. That's because benefits tend to cover the basic needs of employees (and are sometimes required) or, otherwise, employees will have to cover those expenses themselves. While employees can set up their own retirement plans, pay for their own insurance, and even take vacation days that are unpaid, many companies offer to help with or cover these costs for them.
Fringe perks, however, are additional benefits that offer appealing but no-so-necessary help. While employees can self-fund daycare or gym memberships or their lunches or their commutes or even things like IVF, fringe perks are icing on the cake.
A benefits package will have benefits and, often, a number of fringe perks, as well. An attractive benefits package will almost certainly have both.
What are some good benefits for employees? Benefits and fringe perks are up to the company, but there are still some that are more competitive than others. Here are four benefits and fringe perks that an attractive benefits package would offer.
Most developed countries do indeed offer paid sick leave, but the U.S. is the only one that does not have national standards regarding paid family or sick leave. Instead, employees rely on voluntary employer policies as the federal Family and Medical Leave Act (FMLA) only requires eligible employers to provide unpaid family leave.
A wealth of research shows that millennials, especially, will have a hard time saving up for retirement as student loan debt soars. In fact, two-thirds of millennials aren’t even saving for retirement at all, largely because student debt is approaching $1.5 trillion – $620 million more than U.S. credit card debt. That means that graduates today find themselves with $39,400 in student loans on average; one in six graduates owes more than his or her annual incomes, and about 2.5 million Americans have student debt in excess of $100,000. Retirement plans that offer a matching program (meaning the company will match what the employee puts in), are a major incentive for a lot of people.
A recent report from FlexJobs, Working Parents in 2017: What They Want at Work, shows that more than four out of five parents value work-life balance more than salary. In total, 76 percent of respondents said that a flexible schedule was even more important to them than pay. And 81 percent said that work-life balance mattered more to them than earnings. Seventy percent of those surveyed even said they’d thought about leaving a job because it didn’t offer flexibility. Well, with technology such as smartphones, virtual meeting platforms like Skype, and instant messaging mediums like Slack, working remotely is easier than it ever was.
The United States offers notoriously poor parental leave benefits, especially compared to countries like Denmark, for example, which offers a year. Other countries like Italy offer five months; France offers 16 weeks. According to a 2016 Pew Research Center analysis of 41 countries, the U.S. is the only country to offer no paid parental leave. In fact, only five states and Washington D.C. offer paid leave to workers. This means that only 60 percent of Americans can access FMLA for parental leave, and paid leave is only available to 13 percent. That's why offering a parental leave program, especially for both moms and dads, is a great benefit.
What are good benefits to look for in a job that aren't so common? The companies that go the extra mile might offer added perks like the following:
Different companies have different standards for what's considered a good benefits package. For example, a startup and a corporation might have very different ideas. What are startup benefits vs. corporate benefits? Well, a startup might not have the means right away to offer employees all of the aforementioned benefits and fringe perks, but it might be able to offer the following:
A corporation, on the other hand, may have more stability and bandwidth to offer more of the aforementioned benefits and fringe perks.
Here are three examples of companies that offer good benefits packages:
Netflix offers its employees who are new mothers and fathers up to one year of paid time off to new mothers and fathers, as well as unlimited time off for vacation and sick days to everyone.
"Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field — experience shows people perform better at work when they’re not worrying about home,” said Netflix chief talent officer Tawni Cranz in a blog post announcing the change. “We want employees to have the flexibility and confidence to balance the needs of their growing families without worrying about work or finances.”
Abbott is offering its employees a new student loan/401(k) program, known as Freedom 2 Save. It helps employees pay off their loans; if employees can put two percent toward paying down their student loans, Abbott will match it with a deposit into their 401(k) accounts.
"We fundamentally believe innovation is not only about our technologies — it’s also about the opportunities we create for the people who invent and refine them, and that’s why we dig deep to figure out what the greatest pain points are for our employees and then work to come up with innovative ways to address them," Abbott’s executive vice president of human resources Steve Fussell told us. "We don’t conduct research in the market and with recruits and employees to be like everyone else – we use these insights to offer them something different. What we learned in the U.S. over the last several years was that one of the biggest financial concerns, especially for millennials and gen Z, was student loan debt. More specifically, we learned that crushing levels of student debt had caused some employees to choose between saving for their futures and paying off school loans... That’s an especially big problem when you consider every decade you wait to start saving for retirement, the amount you need to save roughly doubles."
Comcast employees who live in serviceable areas all get free XFINITY TV and internet services, as well as voice and home options at discounted rates. That saves them about $3,000 annually. "We have a very diverse population that we need to offer benefits for and take into consideration,” Jill Personett, senior director of benefit design and strategy at Comcast, has said.
Just like you should negotiate your salary to a number with which you're comfortable (and deserve), you're entitled to negotiate your benefits. After all, according to the Northwestern Mutual guide, “Changing Jobs: Top Financial Considerations Beyond Salary,” a 2015 Bureau of Labor Statistics (BLS) stat indicates that the remaining 30 percent of compensation is made up of benefits. You'll want to be sure that, before you say yes to a job, then, both the salary and the benefits make sense for you.
There are three general steps to negotiating anything in life.
Before you go into any negotiation, know the outcome you're hoping to get. If you want more flexibility or some help covering the costs of your commute, know exactly what flexibility looks like to you or exactly how much compensation you're looking for to cover exactly how much your commute should cost you.
Be sure to look around at competitor's benefits packages to see what they offer. This way, you'll know what's standard and more likely doable.
Always be confident in asking for what you want. The worst that can happen is that the person you're asking says no.
AnnaMarie Houlis is a multimedia journalist and an adventure aficionado with a keen cultural curiosity and an affinity for solo travel. She's an editor by day and a travel blogger at HerReport.org by night.