Pay packages: benefits focus on homes, loans and wellbeing
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
When Diya Gera moved to London from her home in India as a graduate recruit in 2017 she spent months looking for somewhere to live. She was not alone.
“A lot of my friends were struggling to find good flats with good facilities for an affordable price,” she says.
In the end it was her employer, professional services firm Deloitte, that threw her a lifeline. In 2015 Deloitte had made a deal with corporate landlord Get Living to reserve flats for a number of its graduates in the former Olympic Village development.
The flats are let at market rates but Deloitte takes care of the form filling and tenants do not have to stump up an initial deposit or agency fees, which can bring the otherwise unaffordable within reach.
In the year before the scheme started, Deloitte ran a survey among its graduate intake in which nearly 90 per cent said they wanted help to find housing. “I stopped looking after [I found out] about this,” says Ms Gera.
Deloitte partner James Ferguson, who had made it a new year resolution to get the scheme under way, hopes to work with other employers to scale it up. “We could make it available to all our staff,” he says.
The core employee benefits offered by an employer are pensions and life and health insurance. But companies are also paying attention to workers’ needs beyond the pay packet.
“If the economy carries on growing and there are skills shortages, organisations will be looking to see how they can stand out in the labour market,” says Charles Cotton of the Chartered Institute of Personnel and Development.
One way to stand out is to offer idiosyncratic benefits. They may also reflect the wider values of the organisation and are harder to copy.
At outdoor clothing company Patagonia, some employees are offered three-day weekends to encourage them to get out and about and it has pledged to pay bail for employees if they are arrested during a peaceful environmental protest. At UK-based brewery and pub chain BrewDog, employees with a new dog can take a week’s “puppy leave”. Facebook and Apple offer egg freezing for women and free housing for interns, while Netflix offers unlimited holiday.
Less quirky is help with repaying student loans. A number of employers, including Goodman Masson, PwC, and Penguin RandomHouse, have set up schemes to assist graduate employees saddled with student debt. Forbes magazine dubbed student loan repayment “the hottest” employment benefit of 2018”.
The US arm of PwC will ultimately pay $1,200 per year towards associates’ student debt for six years, which it says will reduce their total loan principal and interest obligations by $10,000 and shorten the repayment period. PwC says around 8,400 employees have taken up the scheme since 2015 and that 7,700 are currently receiving money.
Offering student loan repayment both attracts workers and keeps them loyal. “If people leave within a certain period they have to repay the company, so it’s a good retention device,” says Mr Cotton.
Other employers have focused on the “wellness” trend. “There used to be a divide between work and home, and people talked about work-life balance,” says Debra Corey, adviser to benefits platform Reward Gateway and author of books on HR. “Now it’s work-life integration.”
At London law firm Addleshaw Goddard, as well as private medical insurance, the firm offers a £180 cash benefit toward any health or sports club membership, free weekly yoga classes and a subscription to meditation app Headspace.
Despite “working in a somewhat traditional profession” employees expect such benefits, says the firm’s reward manager Helen Ford.
Addleshaw is one of a group of financial services and law firms that last year drew up a Mindful Business Charter, setting out best practice for reducing stress at work.
There is little point in offering rewards, however, if staff do not know they exist.
Ben Frost, a consultant at US-based recruitment specialist Korn Ferry, says many companies worry they should be offering more: “But actually it’s not a reality problem, it’s a communication problem.”
Developments in technology mean that organisations can easily both glean information from employees about preferences and keep them up to date on benefits offerings through platforms and apps.
Reward Gateway offers one such communications platform. “Each company can put their own personality on it and can use it however they want to drive engagement,” says Ms Corey.
Small companies may not be able to compete with the healthy free food, classes and massages offered by big tech companies in Silicon Valley, but they can make limited budgets work harder by finding out what employees want through engagement surveys and monitoring take-up.
Ms Corey says: “Nowadays tech is so easy. HR needs to get on that bandwagon.”