Whether you’re ordering fast food or building a new home, Americans are increasingly used to getting things exactly the way they want them. So as the talent war continues and intensifies – many wonder if work perks such as a-la-carte benefits could soon be coming to an office near you.
It’s not a new idea. Fifteen years ago, our team discussed the idea with a Fortune 50 consumer markets client. At the time, they were offering customized products to their customers, so why not do the same for their wide variety of employees? The hope was that we could let people choose from stock options, 401(k) matches and a variety of other benefits— an idea that sounded great in theory, but turns out the technology wasn’t there at the time to make it happen.
Fast-forward more than a decade and increasingly, to compete in the race for talent, companies are pondering this idea again— wondering how to best offer benefits to employees in a way that reflects their wide-ranging characteristics, interests and needs. Some want non-cash benefits. Others are focused on compensation or see retirement in their future and want to put more into their 401(k). Some need leave to take care of aging parents. Others are looking for time off after bringing home a baby.
While there is a way for people to choose what they want and need in terms of benefits that can be good for business, there are still three main challenges on this front:
1. Significant tax law restrictions.
2. Digital systems not being in place. This is helpful, not only to offer customized benefits but also to track what people use, value and want.
3. A company’s responsibility to take care of their people. For example, you can’t let employees cash in all their vacation days and work all the time. There needs to be guardrails.
Customized benefits is going to be necessary to cater to diverse workforces and vital if you want to compete in the war for top talent
Even so, with benefits becoming more wide ranging, many companies have started testing the waters with options that offer maximum appreciation at minimal or no cost while also giving people some choice in terms of what is best for them at the respective points in their careers. Here are five examples:
A more relaxed office
Flexible dress codes and the option of bringing your dog to work are examples of where some are starting. These kinds of policies don’t cost a company a thing, but they have great value to employees.
In theory this shouldn’t have any incremental cost, although it only works when you have the technology and systems in place to measure productivity. Companies that offer the benefit of flexible workplaces and schedules find that this benefit improves productivity, reduces stress and burnout and increases employee appreciation and work/life balance. There are times at PwC we even see flexibility saving us money. Someone on our team based in New York City recently decided to move to Pittsburgh. The firm decided we want to keep this great employee and our flexible work environment makes that possible. The cost for us is nothing and we actually save in not having to conduct a job search and train a new employee.
Low cost benefits
When it comes to a-la-carte benefits, some companies are so intrigued, they’re willing to offer some benefits even when a small cost is involved expecting a bigger payoff for their people. Free credit card monitoring, for example, costs very little but makes employees feel safe in the wake of a multitude of breaches.
Student Loan Reimbursement
You can also build in options by offering benefits that target certain parts of your population, like enhanced parental leave or student loan paydowns for recent graduates. At PwC, we started a program that give employees $1,200 a year in student loan debt assistance. That’s a minimal cost from a company perspective, but the value for new employees is staggering. Many cite it as a deciding factor in accepting our offer because it shows we are willing to partner with them to pay down their debt.
Affordable Care Act-compliant health benefits
Benefit choice is becoming so attractive to some companies, they’re opting for it even when there is a larger cost to them. One media company we work with chose to roll out Affordable Care Act compliant health benefits to all its employees. They saw a bigger plus in spending more up front and offering the choice to everyone rather than limiting employee choice and potentially paying some tax penalties.
The bottom line is this – benefits of the future will increasingly be customized. It’s going to be necessary to cater to diverse workforces and vital if you want to compete in the war for top talent. It’s also good for business because you’ll no longer be wasting costs on benefits that people don’t appreciate, want, or use. That makes benefit choice a win/win for everyone and something worth exploring.