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Dec 07

Category: Employers

What employee perks best motivate staff?

AirBnB — the online short-term lettings website — not only insists that all of their staff take holiday time every year, but also gives them up to $2,000 each to spend on time away from the office. Google and Facebook both provide daily lunches, onsite health centres and free childcare. Pinterest buys every single employee a brand new MacBook.

In Silicon Valley, where competition for the best and the brightest is extreme, a benefits war is breaking out between the big firms. Employee perks, it seems, are the in-vogue way of attracting, motivating, and retaining staff.

Over on our side of the pond, though, we seem to be missing a trick.

YouGov — the polling agency — recently reported that workers in receipt of three or more benefits were more satisfied, motivated, and likely to remain with their employer. Yet, fewer than half of UK employers (48%) reported that they recognised a link between staffing and employee benefits.

Arguably, British employers need to up their benefits game if they’re going to attract the most talented staff, especially in highly competitive spaces like marketing, digital, business development, bid management, and design.

Cost is obviously a consideration, however. So what does the evidence say are the most sought after benefits that cost employers the least? What perks give the most bang for the buck?

More holiday? Nope.

In the United States, where there is no minimum required holiday period and the average number of annual paid vacation days is just 7.7, firms that offer sizeable chunks of time off stand out. Four weeks of holiday marks a U.S. firm out as being very generous indeed.

While some British firms, as we are, are trying novel approaches such as unlimited paid vacation, generally, because the legally required minimum is 20 days + bank holidays already, there isn’t much space to differentiate. A few days here and there are helpful, but it’s rarely the ‘game changer’ in terms of a benefit.

A really generous pension? Not really.

While a large number of employees rate an employer contribution pension highly, the actual details of the pension plan are less inspiring. The reason for this is simple: many people, especially those under 40, simply aren’t thinking all that much about retirement and, so long as a pension is available, aren’t all that likely to look at it too close.

The Harvard Business Review suggests this is because of a changing attitude towards retirement — as we live longer, healthier lives, people see themselves working and remaining active for much longer. As a primary motivator, it’s losing its sparkle.

Higher pay? Not so much.

It’s usually a pretty safe assumption that a higher salary offer will seal the deal. Not necessarily. In a review of all of the evidence on pay and motivation, a group of US-based business school professors found the association between salary and job satisfaction to be ‘very weak’. So weak, in fact, that they found just a 2% overlap between salary and satisfaction at work.

So, if these three traditional employer benefits aren’t particularly effective, what will attract the most talented staff to your company?

Flexible working

This doesn’t simply mean the opportunity to organize your work day more flexibly, to work from home, and so on (though, as we’ve written before, this type of flexibility is increasingly important to people). It also means autonomy; that is making people feel as though they have some choice in what they’re doing.

Manager’s hold the key to delivering this sort of autonomy, which requires a major departure from traditional ‘command and control’ management style. Instead, employees are encouraged to give their perspective, choice and self-initiation are encouraged, and managers are responsive rather than dictatorial.

Evidence backs this up: In a 2004 study, researchers found employees granted greater autonomy were better performers, and happier too.

A strong community / culture

Thanks to social websites like LinkedIn and Glassdoor, candidates have more opportunity than ever before to get in the insider lowdown on a company’s culture. Basically, if you’re not a great place to work, people are going to find out fast.

Many companies have work to do, however. According to Glassdoor’s database, the average employee gives their company only a C+ when asked whether they would recommend their company to a friend. If you’re going to stand out, and attract the best, you need to do better.

What’s one popular way to start instilling a better workplace culture? A focus on workplace wellbeing, say some. Big law firms, for example, are focusing on fresh fruit, health and fitness classes, regular social events, and event meditation.

Regular recognition / rewards

Annual bonus schemes are now fairly commonplace, but on-the-spot bonuses and simple recognition practices are less common. The evidence, however, says that they’re a strong motivator.

86% of employees are reportedly motivated by recognition and 65% say that they would work harder if they were better recognised at work, according to a survey. On-the-spot bonuses coupled with an acknowledgement of particular achievements in staff newsletters and in meetings are now considered to be much more motivating than a single, once a year, payment.

While we’re not writing off salary, pension, and holiday hours as decision factors for candidates, it’s clear that a broader range of factors is in play than previously. Increasingly, softer benefits are clinching the deal. So, if you want to attract and retain the very best, it may be time to reflect on your employee benefits packages.

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