Post perk-cession, employers course correct to focus on meaningful benefits
Earlier this spring experts declared we were in a perk-cession due to employers pulling back on benefits like free food and laundry in an effort to cut costs.
However, others are considering it a course correction, an opportunity for employers to determine which benefits are must-haves versus nice-to-haves.
“We are definitely in a difficult economic situation that is hard to deny or avoid,” said Ally Fekaiki, founder of flexible benefits company Juno. “I don’t necessarily want to point fingers at companies that have decided to tighten their belts because survival was important to them.”
Those must-haves, which usually address key issues in staff’s lives outside of work like childcare support, mental healthcare, fertility and family-forming services, are being solidified. At the end of the day, those core benefits matter more than any of the other frills.
Some of those frills have previously included a wide range of perks, from rolex watches, daily catered lunches and cash holiday bonuses, to in-office massages, free haircuts, and even free botox. There was a time when it seemed employers seemed to be pulling out all the benefits stops to attract and retain talent.
In recent years companies have made strides in offering more inclusive benefits, like fertility benefits and transcare, which have largely been a part of their diversity, equity and inclusion goals. But the perk-cession has been a time where companies have had to decide whether to put even those more serious benefits on ice.
In some situations, that had to be the case. Jenny Saft, co-founder of fertility benefits company Apryl, said that some of the companies it has worked with, which have been under financial pressure, had to pause offering this benefit. “When you’ve just let go of 10% or 20% of your workforce, you cannot announce an expensive new benefit at the same time,” said Saft.
It’s tricky for employers to navigate. Do they stop daily free lunches which might cause more noise in the workplace or pause certain healthcare benefits that may be used by far fewer people?
“There’s things like free lunches where there is a lot of noise when you take them away,” said Saft. “There was one company we talked to where they turned other benefits off for two months and no one complained. It was super interesting.”
Either way, companies are having to get real about which benefits they can afford to keep, and which need to be cut. And that will often vary depending on the business.
“It’s important companies look at it from a very utilitarian perspective,” said Fekaiki. “Benefits should be utilitarian. People may not want to get their drinks trollied around on a Friday, but they still need to get their kids to school, sleep well, and take care of their mental health. The vision of perks and benefits should always be, and has been at great companies, that it’s something they need in their life, not a nice- to-have.”
Ultimately it unveils to the employee what the employer truly values. “Big tech companies are suddenly waking up and realizing there are so many benefits to people where it’s just too much,” said Saft. “Cutting down they ask what do we actually want to offer? Is the fruit basket in the office the one thing that really keeps them there? Is it the gym membership? It’s asking who do we want to be as companies.”
For some that might mean the clear answer is keeping benefits that are a part of their DE&I goals.
“We believe that fertility and family-forming benefits are one thing that you cannot really touch,” said Saft. “Once it’s implemented, it’s very hard to take away. It tells a lot about a company’s values if it’s taken away.”
Tate Hackert, president and co-founder of earned wage access provider ZayZoon, recommends involving employee feedback where possible if faced with a decision on what benefits to keep or cut.
“The issue that exists in defining perks is that you really don’t know until you communicate with employees through intensive surveys, bringing topics up in your one to ones and your all-hands meetings,” said Hackert. “Everyone is going to be affected differently by different perks.”
He suggests working on defining the specific culture of a workplace to help identify what benefits will resonate the most. For example, if one of the core values is to be employee health, both mental and physical, that would most likely mean that benefits like gym memberships or telehealth shouldn’t go away. Plus, if a majority of employees are working parents, it might make sense to keep a flexible work benefit.
“It starts with what the core values of the organization are and how you want to shape the culture,” said Hackert.