The Changing Landscape of Employee Benefits

by Ruairi Park, Team Lead Digital HR Services. Telefónica Europe

When you look at a potential employer what do you look for? Is it salary, culture of the organisation or perhaps the benefits that the company offers? By and large these benefits come down to perhaps health insurance, life insurance, employer pension plan, or even a mobile phone. However in the last decade these benefits have been expanded on hugely by one sector which will be the main focus of this piece; the technology sector, specifically the ‘start-ups’.
Companies that have expanded rapidly with year on year revenues (and profits) in the billions of US dollars. These companies, many of which have their base in Dublin, advertise themselves as looking to hire for creative and innovative staff and therefore offer incentives in line with that. These companies are very open about the benefits they offer their employees ranging from full breakfast, lunch and dinner being provided in the office (Google), free phone and mobile plan (Facebook) to a set amount cash for you to pursue outside of work activities (LinkedIn). These benefits are seen as amazing for many prospective employees and am sure a contributing factor to why it is easier to get a place in Harvard (5.9% acceptance rate) than it is a job in Google (0.4% acceptance rate). But while these benefits are no doubt attractive to prospective employees, are they the be all and end all of employer benefits? And are they conducive to their employees?

A more recent development in tech start-ups has been the inclusion of unlimited holiday within their offerings. The more traditional industries see this as an amazing employee benefit that they would love to have to have those round the world trips or even to be able to consistently take some time off for work. From an employer perspective it is great, as for recruitment purposes it makes a statement to individuals about the employer hiring the right people for the job and having a sense of trust within their decisions to take time off when they need/want it. In addition it can save employers money in the long term as when an employee leaves the business there is no need to process any due holiday. On the flip side of this employees are currently not taking the holidays they are legally entitled to according to a study by Oxford Economics in 2014*, which states that workers in the US are only taking 77 percent of their entitled leave, with the second highest reason for not taking this leave ‘Too much work to do’ across all workers. So unless the HR team and business culture as a whole put a significant focus on individuals taking time off within these unlimited leave policies, people will continue to not take their time off and additionally you will not see this as a business, as there is no tracking of days taken off.

So can this type of policy work? The answer is yes. The messaging start up Kik, has taken a unique approach to this by implementing a must-take holiday policy. Every four months employees must take one week off, and time away from the office is further pushed by their offices closing for two weeks during December. Another standout in this space is Evernote, who have employed an unlimited holiday policy but had concerns that individuals would not take their holidays. Therefore they started to give their employees $1,000 in cash if they took a vacation lasting at minimum a week. This may seem extreme to many readers, however FullContact, a management software company, has gone even further by implementing a policy of funding an employee’s trip up to the tune of $7,500 (!) so long as they travelled somewhere and did not check their work emails.

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This brings us on to how society and the work environment itself has changed along with the technology which we use every day. Stress in the workplace is an ever increasing statistic and one which organisations are aware of in trying to curtail it. One of the main elements of this stress is the constant connection with the workplace. We have a physical connection to the office at all times on us, the mobile phone. It allows our workplace to contact us at any time and for us to check work emails at any time. Because of this some employee’s perception of their free time has actually just become a time “working away from office”. This increases the average working week well and above what society would deem to be acceptable and safe.

The tech sector has been notorious for offering great in office benefits such as foosball tables, slides (which I would love to try, but I hear is more a first day gimmick), and on site bars. In most of these companies the work is fast paced and demanding and the employees are compensated well for this within their remuneration, and these additional onsite benefits are to encourage them to stay late and work or even to come in at the weekend to work (Google provide dry cleaning services 7 days a week). I know many individuals who work in these companies (some of which are in LOVE with them), all of which work longer hours than I and it is the exception not to work over the weekends. Dustin Moskovitz, of Facebook fame, recently discussed the tech industries high pressure and long hour’s environment. Moskovitz wrote, “”The research is clear: beyond 40–50 hours per week, the marginal returns from additional work decrease rapidly and quickly become negative”. Therefore people and organisations should change their mind-set from working harder (and longer), to working smarter. Research from the Draugiem Group has shown that the employees in the top 10% of productivity unexpectedly didn’t work longer hours than anyone else. Using their time-tracking productivity app Desktime, they found that these high performing employees worked smart by taking 17 minute breaks for every 52 minutes of work.

The important piece to consider in this research was that the employees saw these 52 minutes as “sprints” of intense work, followed by 17 minutes of rest for their mind to prepare for the next “sprint”. This shows that employees should focus more on their work than on the time they put in to the work. This is not just isolated to one level of organisations either. In an interview with Mashable, Facebook COO Sheryl Sandberg states that she leaves the office at 5.30pm every day, “I walk out of this office every day at 5:30 so I’m home for dinner with my kids at 6, and interestingly, I’ve been doing that since I had kids,”. If the COO can leave the office at 5.30pm to go home to her family, so can every employee.

Looking at these benefits, some in more detail than others, there could be a case made for a rethinking by companies on not just what benefits to offer, but also how they will or will not be used by employees. Do employee’s use the holidays that are afforded to them with unlimited holiday polices? Do employees work longer hours based on the benefits they receive and how productive are these additional hours? Many of us do feel the need to portray ourselves as ‘busy’ by spending long hours at work, however it is important for companies as a whole to ensure employees realise that stepping away from their desk or leaving work on time is not a sign of laziness or unproductiveness and the science is there to prove it.

*Oxford Economics, An Assessment of Paid Time off In the U.S.: Implications for Employees, Companies, And the Economy. 2014. Web. 13 May 2016.