There’s no doubt that the relationship between the employee and employer is evolving quickly. Major companies across the U.S. are rapidly adjusting their employee benefits packages to try to better fit employees’ wants and needs. The advent of the remote work revolution brought on by the COVID-19 pandemic has radically shaken up the once-stable relationship between employees and companies.
The question now is: what do high-quality employees prioritize, and what strategies will attract and retain the cream of the crop?
Big corporations are trying a variety of things to counteract, and in many cases, take advantage of this shake up. Some have opted to simply increase wages, driving the year-over-year compensation costs for all civilian workers up by 4% in the final quarter of 2021, according to the U.S. employment-cost index. This change alone averages out to the highest wage increases in 20 years, but it’s hard to say whether these increases are actually what employees want. Unfortunately, wage increases pale in comparison to the speedy inflation we’ve seen coming out of the worst of the pandemic, with overall inflation weighing in at around 7% for 2021.
So what strategies seem to actually be working?
Differing Approaches to Benefits
For example, Starbucks has announced sweeping reform to its benefits packages. Of course, it’s not difficult to view increased emphasis on unionization as a response to challenges posed by the pandemic, and an overall restructuring of the employee/employer relationship. The new benefits will include better sick leave, improved training, and credit card tipping, as well as a baseline raise for most of their employees.
However, many see this move as a type of union-busting tool, as CEO Howard Schultz has made it clear that these improved benefits will only apply to un-unionized employees. As Starbucks employees protest these changes, while also trying to make substantial business relationship changes on their own, this approach seems more like a bandaid than effective, sweeping reform.
Bank of America (BoA) is trying a slightly different approach, by giving an inflation-adjusted raise to a large percentage of their employees and rolling out sustainability incentives. In May of 2022, BoA announced pay bumps of 3-7% for all employees making under $100,000, with the degree of the raise depending on overall time spent working for the company. While these raises may placate some financially stressed BoA employees, they’ll only go as far as to return employees to a pre-2021 inflation world, and in that sense, don’t actually constitute much of a raise at all.
Moving on to their more quirky new perk, BoA simultaneously announced that they’ll give a $4,000 bonus to any employee making under $250,000 who purchases an electric vehicle. Employees who sign a lease on a similar vehicle will receive a bonus of $2,000. For those BoA employees already sold on the EV revolution, this is great news. But are these perks enough to keep the rest of their employees around?
Employees are Expecting More
It’s important to remember that just as few companies were insulated from the COVID-19 pandemic, few companies will be insulated from this increasing wave of employee demand. Through the magic of remote work, increased flexibility, and more time to spend with their family, disgruntled workers everywhere are asking for their due. And it’s only going to become more widespread.
So looking at the data, what can bosses give their employees that they might actually want?
A recent study done by the Society for Human Resource Management (SHRM) collected data about which types of benefits employees valued the most in late 2020. The study found that quality healthcare was the most important benefit to employees, with 90% of those surveyed claiming they considered it to be either extremely or very important. Flexible/remote work options and paid leave weighed in as next most valuable to employees, both tying for second and third place with 83% of respondents answering that found them to be extremely or very important.
If you want to keep the great employees you have and hope to attract more to your company, these three elements are probably the most important ones to lock down.
Going the Extra Mile
However, benefits like healthcare are often already covered by most mainstream companies. What are other companies and industries doing to try and attract the best talent?
Other companies, largely driven by a grassroots movement in the startup community, are experimenting with a 4-day work week. Proponents argue that giving all employees an extra paid day off per week can promote high levels of productivity, as well as drawing more young professionals to the organization. While it remains to be seen if this truly takes off in mainstream American culture, it’s important to note that it’s being seriously considered by more companies than you might expect.
Another angle to approach the problem from is significantly raising the quality, affordability, or visibility of your pre-existing healthcare coverage. medZero is attempting to be a part of this solution by implementing “Buy Now, Pay Later” programs for employees who are signed up through their employer. By making healthcare more affordable for those who need it the most, we hope to be able to help employers retain the highest level of employee retention, while also attracting the best new workers.
medZERO is unlocking a smarter way for employees to pay for care. Find out how.