We recently helped a client analyze a survey they had conducted trying to understand what benefits and activities were valued most by their employees. This particular company worked very hard on its culture and was able to list a couple of dozen programs that were designed to benefit the employees from traditional benefits such as paid time off to events like pizza parties.
When I first looked at the data, it was all over the place. Almost every benefit was loved by some people and not by others. There didn’t seem to be a pattern until I segmented the data by tenure of the employee. I divided up the employees into 3 groups: new employees, 1-5 year employees, and > 5 year employees.
The newer employees really valued the benefits that helped them to learn more about the company and its purpose. This included the onboarding process, tours of other departments, and programs that helped to share the bigger picture such as the Great Game of Business. They also valued community efforts where the company supported local civic and nonprofit organizations.
The 1-5 year tenured employees valued the benefits that helped them develop in their careers. They valued networking opportunities where they could join associations and hang out with peers from other companies. They also valued opportunities to learn including access to workshops and education.
The 5+ year tenured employees valued the benefits that brought them and their families resources. These are more traditional benefits such as pay, paid time off, and retirement benefits.
When we looked at the data this way, it made a lot of sense. This company tends to hire a lot of recent college graduates who are just starting out their career. In their first year, these employees are naturally finding a purpose for their work both inside the company and in the larger world around them. As they get more confident in knowing their “why”, they start to focus on being more effective in “what” they do. They want development and networking opportunities. Finally, as they get settled into their positions, establish their network, and their knowledge base, they then naturally start to think more long term, focusing on salary and other traditional benefits.
The punch line is that different employees value different experiences and benefits. This can be extremely frustrating to business owners and executives who are looking for ways to attract and retain talent, however, it also highlights opportunities for savvy employers. The opportunity exists because too many employers spend too much time lamenting about the “old days” when employees were paid to work and that was enough.
This is no longer the reality. The new reality is that there are more job openings than people available to fill those openings and that this shortage of workers will get worse through the 2020’s. We are entering what is called the Great Sansdemic (workforce shortage).
The other reality is that because workers have more choices on where to work, they are simply demanding more. However, employees aren’t just looking for more money, they are looking for better employers.
The bad news is that the average employer isn’t very good. In the US, only 34% of employees are “engaged” leaving almost two-thirds of employees feeling disengaged or toxic. Since people are hardwired to want to be engaged in their job, this indicates that employers are falling very short.
So how can companies become better employers? Here are some thoughts.
1. Culture Beats Benefits Almost Every Time – Employees today are more aware than ever of creating more work-life integration. They will accept a job that pays a little less to work for a company with a better culture. Companies with great cultures balance empowerment of individual employees with alignment around a larger purpose. A great culture is not about pot-luck suppers and ping pong tables. It is about creating a high-performance environment where employees can contribute their own unique strengths and experiences towards accomplishing something bigger than themselves. However, there is a caveat. If you don’t pay your employees enough or miss out on key benefits, Maslow will kick your ass and your employees will be easily lured into worse jobs for more benefits.
2. Flexibility Matters – The pandemic has taught employers how much flexibility is possible. It has also taught employees the good and bad aspects of working from home and working different hours. Too many employers are concerned about whether or not to keep people working at home or bringing them back to the office to the “old way” of working. The real question should be how to accomplish the needs of the organization and protect the culture while offering employees as much flexibility as prudent. This is a problem that management can solve with their employees instead of solving for their employees.
3. Consider Adding Benefits for Millennials and Gen Z’s – Different generations value different benefits. According to Gallup’s 2017 State of the American Workforce, Millennials particularly value benefits such as paid parental leave (maternity and paternity as well as partner leave), student loan reimbursement, child care reimbursement, tuition reimbursement, professional development opportunities, and paid time off to work on independent projects. Many of these benefits point to opportunities to engage employees to help them create a plan for getting through common life challenges.
I will close with the following analogy that I think describes what the 2020’s will be like for employers. Employers are campers sitting around the campfire. Suddenly, a large and hungry bear wanders into the camp. The bear is the Great Sansdemic. The bear can run faster than any of the campers and none of the campers thought to bring any weapons. If you are a camper in this situation, what strategy do you have?
You can’t outrun the bear, but you can outrun the other campers. The Great Sansdemic will claim victims. Some employers will get eaten by the bear. Fortunately, in this analogy, the other campers aren’t very fast. The average employer is simply not very good.
Your best strategy is to become faster by being a better employer. This starts with going all in on building a great culture. It is supported by examining the benefits you offer your employees. The good news is that being a better employer brings additional benefits such as improved profits and more joy in managing a company.
The bear is here. Put on your best shoes and limber up!