A November 2018 study from the Federal Reserve Bank of San Francisco found that the aggregate labor force participation rate leveled off, and along with a low unemployment rate, the U.S. labor market was operating “at or beyond its full potential.”
And with these glossy numbers comes a shift in the balance of power-from job provider to job seeker. Companies have to get more aggressive and creative when dipping into a much shallower employment pool.
In a less constricted U.S. workforce, businesses would compete for the best candidates using the obvious weapon- money. Bump the pay relative to your competitors and your offer becomes a lot more enticing. But these days, an increase in salary is not enough for those looking to make a big change in their careers. Companies have to bring more to the table.
I’m talking about perks. Younger generations of workers are increasingly valuing additional benefits offered by prospective employers. Money can’t buy you happiness – but all this other cool stuff might! Some of these perks may seem really weird to you (pet insurance!), but others make complete sense for millennials looking to assert themselves in adulthood (paying off their student loans).
We have perks that are admirable and can be essential pillars in building an ethical work culture (paid volunteering opportunities), and others are just fun (access to lounges teaming with televisions, games and catered lunches). We have pampering perks, like free breakfast every day (all hail the office Keurig!), free snack cupboards, sporting event tickets and napping rooms – yes, napping rooms! There are community perks, such as book clubs, employee sports teams and Halloween costume contests. And I would be remiss if I didn’t mention lifestyle perks, like reduced summer hours, casual dress codes and paid days off for birthdays. Online warehouse company Boxed pays up to $20,000 for employee weddings. That’s how far perks have come.
States are also getting in on the action. Tulsa is offering a program called Tulsa Remote that will pay you $ 10,000 to move to the Oklahoma City in an effort to boost its economy. It will also give remote workers free desk space and a free housing stipend. Vermont is taking a similar approach, giving $10,000 over two years to eligible remote workers of out-of-state employers to cover relocation fees, a computer and co-working space. Maine provides student debt relief to graduates who live and work in the state. Those with STEM degrees get more beneficial terms, such as the ability to receive a check from the state if their student loan payments exceeded their state income tax liability.
I know what some of you are thinking – is all this stuff really necessary? Well, it depends on the person. You may think I artfully (or unartfully?) dodged the question, but it’s true. We all like money. But people want to be happy when they enter and leave the office every day. And different things make different people happy. By offering a variety of relatively inexpensive perks, a company can cover a wide range of desires and values, maximizing their chances in snaring the very best in the workforce.
These perks serve a psychological function as well. By offering them to current and future employees, you show that you care about them, that the relationship between employer and employee is not just exchanging work for cash. It adds more personality to the business and warms the relationship between those up top and those on the front lines-potentially melting away the cold barriers within the company and providing a fun and inviting workplace.
Choose Perks That Fit
So, what perks fit best for you? Try to find some that align with your current operation. If you’re a smaller motor shop, having an on-site fitness center doesn’t sound sensible or feasible. But a monthly dinner with the owner might make your employees feel valued and give you a chance to connect with them on a more personal level.
Department retreats to build trust and teamwork may scare off your more introverted employees and be too costly and time-consuming. But discounts on travel and not demanding that your salespeople stay in only the cheapest hotels can go a long way. Find the perks that correspond with your budget, company size, workplace culture, and your employee’s wishes and go from there.
Many of the most effective benefits are these culture perks. When interviewing job seekers, don’t simply focus on their education and accomplishments, stress that the work is challenging but rewarding, that you value collaboration and feedback, and that the work environment is enjoyable and appealing. In a tight labor market, something as simple as offering freedom to be creative can be the deciding factor for someone.
Culture perks also are essential in retraining your current talent. As the number of unemployed dwindles, companies are turning to employees from competitors. For some businesses that are struggling to find good fits, perhaps they should instead focus on developing their current employee base and wait for an economic downturn and subsequent increase in job seekers. Prevent turnover by setting a clear path for your best and brightest. Consider expanding the responsibilities of young hires. Utilize the resources you already have because many companies are lying in wait to snatch up your disgruntled workers at the drop of a hat.
I often hear from motor shop and plant managers that they have difficulty finding people who have the necessary skills to perform specific technical tasks. Managers may have to bite the bullet and hire the inexperienced with the commitment to train him or her in-house. In the current economic landscape, you shouldn’t wait for the perfect employee to come along.
If you establish an outstanding training program or expand your current educational offerings, you can essentially create a competent employee factory. Sometimes, the best employee can come from the unlikeliest of backgrounds, so don’t completely dismiss people out of hand. A 55-year-old man may wind motors at double the speed of die young buck on his first job.
Train and retain! This one-two punch, alongside valued perks that fit your business goals, will keep your company stocked with the best workers and give it the ability to weather a tight labor market, a loose labor market, a labor market of any size and complexity. And if all else fails, consider offering pet insurance. People love their pets.
The views of the author of this article do not necessarily represent the views of Gradifi. We make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the information contained here. Readers should consult their own attorneys or other tax or financial advisors to understand the tax, financial and legal consequences of any strategies mentioned in this article.