Rethinking the Benefits Package for Today’s Workforce
JULY 14, 2021
A paycheck, an insurance policy, two weeks’ vacation and a pension just don’t cut it anymore. To attract and retain talent, companies are putting an unorthodox spin on the traditional benefits package, including concierge medical memberships, competitive retirement programs and extended parental leave for both moms and dads.
A "benefits 2.0" package can include the following:
Concierge Health Coverage
The U.S. healthcare system’s employer-provided model is rooted partly in companies needing to one-up each other during the recruitment process. The model took off during World War II, according to NPR, when factories used generous health plans as a recruitment tool to meet product demand. But today, health insurance doesn't translate to a great patient experience, as employees struggle with crowded waiting rooms, endless paperwork, rushed appointments and a wasted work day.
A growing number of companies are buying into a new vision for primary care offered by concierge services such as One Medical Group. The San Francisco-based organization accepts most forms of insurance and charges a yearly fee. Members get benefits such as same-day appointments that start on time and direct communication with their physicians. More than 80 companies now cover the membership fee as an employee perk, according to Paul Jorgensen, vice president of enterprise sales at One Medical Group.
"We’ve seen the most penetration in tech, as well as finance and legal," Jorgensen says. "All employers view One Medical a little differently. Some view it as a cost-savings tool because we have the ability to lower healthcare costs. We’ve seen some clients post One Medical on their job application as a perk to attract talent. We’ve seen others do it as a way to make their employees more efficient."
But don’t forget about Fido. Many companies now extend health benefits to employees’ pets, as well. Chipotle Mexican Grill, MGM Resorts International, Ford Motor Company and thousands of other companies offer company-subsidized pet insurance as a perk, according to the Associated Press.
"Like any kind of health care offering, (pet insurance) is viewed as an employee enticement and retention tool," says Charles J. Sebaski, insurance analyst for BMO Capital Markets.
Smarter Ways to Save for Retirement
Competitive salaries are an obvious financial draw, but companies are getting creative about their portfolio of financial perks too. Even the 401(k), popular since the early 1980s, is getting a makeover. USAA, for example, matches employees’ contributions dollar for dollar to eight percent, according to Entrepreneur.
The Roth 401(k) is another common retirement benefit that companies offer in addition to the traditional 401(k). The Roth 401(k) is funded by after-tax dollars, allowing employees to avoid unpredictable taxes on those contributions when they retire.
Companies looking to get in on the next trend might consider offering managed 401(k) plans to help employees make good decisions. These plans put the investing decisions in financial professionals’ hands. Saving for retirement is an important, complex decision — and most people just aren’t very good at it.
"I joke that most people spend more time each year figuring out who they are going to start on their fantasy football team than how their 401(k) account is allocated," Joshua Itzoe, a partner at wealth management firm Greenspring, tells Bankrate.
Time Out of the Office
As employee benefits such as unlimited vacation, catered meals, gym subsidies and on-site childcare become more mainstream, companies are looking for other ways to differentiate their culture. This is especially important as a new generation of job seekers redefine the notion of work/life balance.
One strategy is paid maternity and paternity leave that extends beyond the timeframe required by federal and state laws, says Kathryn Ross, vice president of marketing at Sequoia Benefits.
Last year, Yahoo extended its parental leave benefits in an effort to attract employees. New moms now get 16 weeks of paid leave, while new adoptive or foster parents (moms and dads) get eight weeks of paid leave, according to Bloomberg.
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