As unemployment drops, employers get creative with benefits offerings
To attract Millennials, companies are offering quirky perks such as bike-sharing memberships and pet insurance. But the largest generation in the workforce is more interested in opportunities for career growth and help with paying off student loans.
National unemployment, on the decline as the economy recovers from the recession, dropped to 5 percent in September and with less competition for each job opening, potential employees are earning back their leveraging power.
In order to attract employees, companies are getting creative with benefits packages, often targeted at Millennials, who surpassed Generation X to become the most represented generation in the workforce in 2015.
"Millennials are looking to connect their personal and professional lives in a way that's dynamic," says Jim Conti, director of talent at Sprout Social in Chicago, told Inc. "They want to feel at home and a company can achieve that with more than breakfast on site, flex hours, and stand-up work stations."
For example, vacation rental company HomeAway offers its employees a free vacation rental and Audible Inc. caters lunch for its workers each day. Others have fancy espresso machines in the break rooms, give employees discounts on fitness classes, memberships to bike-sharing services, or pet insurance.
But while no one is complaining about free food, these quirky perks do not correlate with employee satisfaction and classic benefits and a 401(k) plan, health-care coverage, and paid time off, still matter the most to employees of all ages, according a GlassDoor research report.
Brandon Rigoni and Amy Adkins, whose research looks at what defines Millennials as employees, wrote about similar findings in the Harvard Business Review:
Contrary to popular perception, Millennials place little importance on a company encouraging creativity or being a fun, informal place to work. In fact, Baby Boomers are slightly more likely than Millennials and Gen Xers to say that creativity and fun are “extremely important” to them when applying for a job. But Millennials do need to be convinced why and how an organization will help them learn, grow, and develop, and further their careers.
And although income is not among Millennials’ top five factors when applying for jobs, it still matters to them when looking for a job, as it does to all employees. Millennials have high levels of student debt and are living in an era of anemic wage growth.
And some companies, eager to retain young employees have created benefits package that address the student loan problem.
In March, Fidelity began offering all full-time employees $2,000 each year for student loans, a benefit which is capped at $10,000, but since then several companies, including Chegg, PricewaterhouseCooper, and ChowNow have offered similar loan repayment programs as part of their benefits package.
Tony Aguilar, the founder of Student Loan Genius, told The Washington Post that he has noticed another trend.
In 2015, Natixis Global Asset Management released a report showing that the burden of paying off student loans frequently prevented young employees from putting money into their 401(k)s, and so an increasing number of companies now make a 401(k) contribution when an employee makes a loan payment.
Millennials' "eyes are not on retirement, it's 'how do we get rid of our student loans, control our debt,' " Mr. Aguilar told The Washington Post. “These sorts of benefits are for a different generation with different problems."
However, regardless of how useful or wanted some of the perks now offered in benefits packages are, only about 5 percent of small businesses offer them, Evren Esen, head of surveys at Society for Human Resource Management, told the Monitor in June. Moreover, many people struggle to obtain even basic benefits such as health care and a retirement plan.