The world has changed significantly in the past few years. Paradigm shifts have challenged the way employees and companies look at compensation and benefits. Companies must, therefore, adjust their compensation structures to match current trends and remain competitive.
Company executives, business owners and managers ask themselves: what do employees desire from companies today? It is important to consider how trends and paradigm shifts have affected employee desires. For instance, the recent pandemic has significantly altered employee priorities and needs. Business executives can design compensation and benefits packages that reflect this new reality by understanding what employees want from their companies and their changing work environment. In turn, companies can attract top-tier specialized talent and retain it.
What Are Employee Benefits?
In essence, employee benefits are how employees are compensated beyond their salary. A common misconception is that benefits need to involve monetary payment or are restricted to healthcare. The truth is that benefits may involve a wide range of compensatory elements that do not necessarily relate to money.
Business executives know that attracting the best workers in their market does not always entail a high salary. Of course, paying a competitive wage is the first major step. Nevertheless, the best talent demands more than just a competitive wage. Top performers need compensation that matches their aspirations. Please feel free to check out the article titled In that piece, we discuss this topic in detail.
In today’s employment market, company benefits packages must go beyond “mandatory” health and dental coverage. Biotech and device companies must be creative and strive to find benefits that match their employees’ desires. These desires are indicative of a changing demographic with shifting priorities. Past generations value job stability over a high wage. Today’s generation places greater emphasis on flexibility and freedom of movement.
What Are Mandatory Benefits?
In some areas, current labor legislation requires companies to offer specific benefits as part of their compensation packages. These benefits serve as a baseline for what companies offer their employees as part of the overall compensation package. Here is a look at some mandatory benefits companies in certain locales must provide their full-time employees:
- Unemployment insurance
- Workers’ compensation insurance
- Family and Medical Leave Act protection (FMLA)
- Health insurance (Affordable Care Act)
Companies that offer wages plus mandatory benefits are par for the course. As a result, regardless of their performance, employees expect to get these benefits as part of their compensation packages. Biotech companies must, therefore, tweak their benefits to attract the best talent on the market.
What Do Employees Desire from their Companies?
Companies must understand their employees’ needs and desires to design effective compensation packages. This understanding helps biotech companies adjust their compensation structures to reflect the needs and wants of their changing workforce appropriately.
A recent Harvard Business Review study presents the results of a large study that surveyed over 2,000 employees and 500 HR directors in the United States.
Here is a breakdown of the survey’s findings:
- 88% of workers indicated that they would prioritize flexibility in hours and location when looking for their next position.
- 83% of workers believe that companies will adapt working models to address the global skilled talent shortfall.
- In contrast, only 66% of HR directors feel they need to adapt their work flexibility to respond to the global skilled talent shortage.
- 76% of workers prioritize their lifestyle over their proximity to the workplace, thereby moving to locations where they can prioritize work and lifestyle.
- 83% of workers are willing to move out of cities to secure predominantly remote jobs.
Performance measurement is another consideration atop workers’ minds.
Here are some interesting insights:
- 86% of workers prefer working for a company that values achieving outcomes over production. This thought underscores the importance workers place on their impact over raw production numbers.
- On the flip side, only 69% of HR directors indicated that their company currently utilizes outcome measurement strategies. Consequently, the bulk of HR directors feel that companies would not be more productive if executives merely trusted their employees, thereby reducing the amount of supervision through various metrics.
Additionally, employees indicated they want to be part of a diverse workforce. 86% of employees stated they prioritize diversity. Conversely, 66% of HR directors feel they must prioritize diversity. Given the constant shifts in roles, skills, and requirements in the business world, diversity figures to play a key role for companies moving forward.
What do these results mean for company executives?
There are three main takeaways:
- First, companies need to focus on building skills. Re-skilling and up-skilling their current workforce will become an essential part of growing businesses. Moreover, sourcing new talent may take much longer than expected. Companies that rely on hiring new staff to complement necessary skills may find it more cost-effective and convenient to train their current staff.
- Second, businesses must be willing to show greater flexibility. In this sense, flexibility entails offering flexible schedules and remote working opportunities. This approach should enable workers to prioritize their work-life balance as much as possible without sacrificing company goals and performance.
- Last, companies should demonstrate their openness to change with the times. Corporations that are “set in their ways” will find attracting and retaining top talent increasingly difficult. The top performers in any industry want to find companies responsive to their needs and desires. While this does not mean catering to workers’ whims, it does imply finding a logical middle-ground.
What Benefits Should my Company Offer?
Determining what benefits a company should offer largely depends on the company’s workforce structure. Therefore, biotech companies may choose to tweak their benefits package based on the predominant demographic in their workforce. The following table illustrates generations’ different values on the current voluntary, or discretionary benefits companies offer.
|Student loan forgiveness
|Upskilling and training
Source: 2018 Employee Benefits Report, AICPA
Greg Anton, chairman of the National CPA Financial Literacy Commission, had this insight to offer regarding the results of the cited AICPA report, “Beyond the dollar value of having good benefits, employees gain peace of mind knowing that if they can take a vacation without losing a week’s pay or if they need to see a doctor, they won’t be responsible for the entire cost.” This insight underscores why 56% of respondents value health insurance benefits above others. Of course, health insurance is already a mandatory benefit. But in employees’ minds, employees need to know that they have coverage when they truly need it. Health insurance is much more valuable to older generations such as Baby Boomers. Thus, companies with an older workforce structure would do well to prioritize health insurance coverage.
Additionally, retirement benefits such as 401(k) contributions also permeate employees’ minds. It is worth noting that 401(k) contributions go beyond merely helping workers save up for retirement. These benefits are about giving workers peace of mind. Ultimately, having peace of mind results in a happier, more productive workforce.
Other benefits such as paid leave, flexible schedules, and remote working can significantly boost compensation packages without representing a substantial cost to companies.
Given workers’ prevailing needs and desires, the following discretionary benefits would go a long way toward building a happier and more productive workforce.
1. Health Insurance Benefits
Health insurance is the most popular and the most expensive benefit to offer. On average, health insurance can cost between $6,435 and $18,142. Nevertheless, companies ought to consider going beyond mandatory benefits and offer some of the following:
- Access to preferred doctors and hospitals.
- Health savings accounts (HAS).
- Accident insurance coverage.
- Flexible spending accounts.
- Dental coverage.
- Vision coverage.
- Life insurance.
In particular, additional insurance coverages such as life insurance have become quite popular in recent years. A term life insurance policy is relatively inexpensive, and it can be a one-time expense. Similarly, accident and temporary disability insurance provide workers with peace of mind.
2. Paid Leave
Some states have legislation to regulate sick leave, paid vacation time, and personal leave (maternity/paternity or bereavement). Paid time off is a discretionary benefit companies offer as an incentive for their staff. An increasingly popular practice has been to offer paid time off in exchange for volunteer work in recent years. For instance, employees who volunteer for charitable causes can earn paid time off. Naturally, companies must regulate this practice to maximize its benefit.
3. Tuition Reimbursement
More and more biotech and device companies are using tuition reimbursement to recruit top talent. This benefit appeals to a younger demographic. Still, it does not mean older workers cannot take advantage of it, too. Older workers may qualify for tuition reimbursement for training, re-skill, and up-skill programs. Tuition reimbursement has shown to be an effective tool. A Lumina Foundation study of CIGNA employees from 2012 to 2014 found that employees enrolled in CIGNA’s tuition reimbursement program yielded a 129% return on investment. Specifically, the return was due to the cost savings derived from reduced staff turnover. Indeed, investing in current staff is much more cost-effective than recruiting and hiring new workers.
4. Wellness Benefits
Wellness benefits are a relatively new category. These benefits intend to promote health, engagement, and productivity among staff. During the COVID19 pandemic, companies had to invest in promotion wellness plans for their employees. Mental and emotional health programs, exercise plans, and ergonomic equipment were the most common benefits companies offered their staff.
Here are some other benefits to consider:
- Fitness and exercise plans/challenges.
- First-aid training.
- Smoking cessation support.
- Ergonomic equipment (standing desks, chairs, keyboards, screens).
- Mental health care.
- On-site healthcare facilities, fitness centers, nutritional support.
- Health and wellness stipends.
- Overall, culture changes focused on promoting physical, emotional, and mental health.
Given the current state of the world, mental and emotional health have gained increased importance. Thus, companies must ensure some sort of benefits in place to address this increasingly significant matter.
How Can Simply Biotech Help your Company Design the Right Benefits Package for your Workforce?
At Simply Biotech, we know what it takes to help staff feel happy and become more productive. We strive to provide compensation that reflects the needs and desires of our diverse workforce. We take the time to listen and build our compensation strategy around people. Let us show you how we do it. We are sure we can help you find an approach that will help your workforce become happier and more productive.
This post is made available for informational purposes only to provide a general understanding of the topics discussed herein. It is not intended to provide specific business, legal, or professional advice and should not be relied on as such. Simply Biotech is not liable or responsible for any damage or loss arising from any reliance placed on such materials.