2015 21 December

A MarketPoint Whitepaper

Soft Benefits:
Money Isnt Everything

Most

employers would agree that hiring the best talent has never been easy.

network, bring in recruiters, pore over resumes, screen, interview

You

advertise,

and just when you think

youve found the perfect candidate, she accepts another offer.

What was the tipping point? How did you lose?

Money isnt everything

ometimes, the answers are simple: more

money, better healthcare, longer vacations, free life insurance, bigger 401(k)
match. But increasingly, employers find
themselves facing more intangible expectations
from candidates, like job-sharing opportunities,
work-from-home arrangements, or onsite daycare.
These non-traditional perks, or soft benefits, were
largely unheard of when the baby boomers were
entering the job market. But times have changed,
and so have workforce expectations. In response,

savvy organizations have begun to embrace alternative and sometimes unorthodox means of
tempting talent.
Difficult to categorize, soft benefits may be
taxable or non-taxable, tangible or intangible,
financial or non-financial. This broad new
category refers to any set of workforce benefits
other than pay (base, bonuses, commissions,
etc.), health and dental insurance, life insurance,
retirement plans, sick time, and paid vacation.

Why are Employees Attracted to Soft Benefits?

They recognize employees'
contributions in
non-financial ways

They change perception of

the culture or feel of the
organization

They improve the

employees quality of life

They eliminate an obstacle

to employment

Soft benefits may be attractive to employees

because they recognize their contribution in nonfinancial ways, or because they change perception
of the culture or feel of the organization, or
because they improve the employees quality
of life, or because they eliminate an obstacle
to employment. They are generally attractive
to the employer because they add value for
the employee (or increase the organizations
perceived value as an employer) at a greater rate
than they increase costs (in short, because they
have a positive ROI).
Fortune tracks more than a dozen perks offered by
major corporations to attract top talent, including
compressed work weeks, paid sabbaticals,
paid time off for volunteer work, onsite fitness
centers, discounted gym memberships, onsite
medical care facilities, 100% health coverage,
telecommuting, job sharing, onsite childcare,
same-sex benefits, tuition reimbursement and
insurance for part-time employees (Fortune).
None of these necessarily increase the taxable
income of the employee, but all of them make the
employer more attractive.

Clearly, these soft benefits carry costs. Paying

employees while on sabbatical, for example, may
double payroll costs, because the organization
must pay one employee who is absent, while it
also pays a replacement employee. But in the
calculations of the providing organization, that
cost is more than offset by improvements or
reductions in other areas, such as lower cost of
recruitment, a more highly qualified workforce,
higher employee morale, increased productivity
during regular work hours, higher-quality work
product (or customer service), cross-trained or
more versatile workforce, and so on. The same
ROI principles can be applied to paid time off for
volunteer work, 100% health coverage, tuition
reimbursement and insurance for part-time
employees. Other benefits, like job sharing,
child care and telecommuting are instituted to
remove obstacles for highly qualified employees
who could not otherwise work, such as mothers
with young children, or those who live great
distances from their offices, or those who have
physical limitations, including the disabled.

Benefits: From obvious to ridiculous

oft benefits take many forms, some

predictable and some bizarre.

Flexible Benefit Accounts, a natural extension of employer-provided health plans, are

growing in popularity because they cost the
employer little or nothing to implement but can
save the employee significant tax dollars. HRMA

of British Columbia reports that 40% of the

companies it surveyed now offer Flexible Benefit Accounts, and half of those companies have
seen recruitment improvements because of it
whats more, 56% of employers have found significant improvement in employee engagement
(Thomsons Online Benefits).

10

MOST COMMON

Standard Benefits
and Their Adoption Rates (SHRM)

98% 95% 95% 83% 83% 86% 96% 59% 54% 50%
offer some
type of health
care coverage

offer dental
insurance

offer
prescription
drug coverage

offer companypaid group

life insurance

offer
vision
insurance

provide paid
holidays

provide 6 to 20
vacation days
per year

Some airlines allow employees to fly free, when

there are empty seats on a regular flight (Wolters
Kluwer). This practice, commonly called deadheading, costs the airline nothing but carries
substantial value to the employee and, according
to tax advisors Wolters Kluwer, is completely tax
free (Wolters Kluwer).
The Society for Human Resource Management
noted several popular fringe benefits in its 2014
Employee Benefits Survey, including the following
(SHRM):

offer undergraduate
educational
assistance

offer service
anniversary
awards

offer graduate
educational
assistance

90% of responding organizations offer

on-site parking
82% offer professional development benefits
60% offer company picnics
59% offer service anniversary awards
59% offer some form of telecommuting
54% offer undergraduate educational
assistance
50% offer graduate educational assistance

Other sources point to less expected perks,

such as
Reimbursement for fitness-related
purchases, like gym memberships, running
shoes, yoga mats, bicycles, etc. (Matuson)
Freedom to work from any available office
space thats conducive to getting the job
done (Kurvers)
Flexible work schedule, which CareerBuilder
calls one of the most coveted employee
perks, with 59% of respondents saying it was
important (Spors)

Monthly commuter stipends for those

who commute on public transportation
(Matuson)
Paid sabbatical leave (Kurvers)
Game rooms with pool tables, dart boards,
foosball and arcade games (Harrison)
Free food: Google offers all meals, snacks
and treats at no charge (Kurvers)
Concierge services like dry-cleaning pickup
or dropping off your car for servicing
(Kurvers)

Benefits Found at Fortunes 2012 Best Companies to Work for (Van Camp)

Atlantic Health
offers acupressure
services in its
on-site mind-body
centers

Mashable allows
employees to take
their dogs to the
office

GoDaddy puts money toward

off-site employee
activitiesheld during work
hoursto boost team morale

Intel moves people to

new positions every
18 to 24 months to
encourage them to
explore new fields

Kimpton Hotels & Restaurants

holds a Housekeeping
Olympics, including
blindfolded bed making and
the vacuum dash

Salesforce allows
each employee six
paid days a year for
charitable work

Ultimate Softwares health

insurance plan has no
premiums, and there is
coverage for all dependents

Fortunes list of Best Companies To Work For cites even more unorthodox soft benefits, including
(Van Camp)
Atlantic Health: Acupressure services to help employees get through stressful projects
Mashable: A bring-your-pet-to-work policy
GoDaddy: Financial allocations for off-site, morale-boosting activities during work hours
Kimpton Hotels: Housekeeping Olympics, featuring blindfolded bed making and the vacuum
dash
Ultimate Software: Premium-free health insurance for employees and dependents
And, of course, some tech companies take soft benefit programs to ridiculous extremes: (Messieh)
Airbnb employees receive $2,000 every year to travel anywhere in the world; they may bring
their pets to work, go sailing on work hours, play pingpong, take yoga, and eat free organic
lunches every day.
Ask.com employees have no vacation policy because vacation is not tracked; they also receive
tuition reimbursement, and the company matches their charitable donations.
Automattic employees also have an open vacation policy; whats more, they set their own
working hours.
At Dropbox, all meals are free (including snacks and drinks); the office has a fully equipped music
studio and game rooms and gaming tournaments; employees also set their own online storage
quotas and celebrate Whiskey Fridays.
Eventbrite employees are encouraged to leave the office anytime: for breakfast, or bike outings,
or to play on the trampolines; snacks are free, and so is the company wellness and fitness program;
pets are encouraged in the workplace, and so is playing with Legos.
Facebook offers four months paid parental leave, reimbursement for daycare and adoption
fees, and $4,000 baby cash for each new arrival.
Google employees eat free organic food in the cafeteria, ride bikes, play volleyball, and swim in
the company pools; they receive free oil changes, car washes, dry cleaning, massages, hair styling
and bike repair; they may also receive up to $12,000 in tuition reimbursement per year, and
emergency back-up child care and adoption assistance, with $5,000 in reimbursement for legal
fees.
Apple employees get free trips to the Apple store. (Need we say more?)
StumbleUpon employees eat like Googlers and have full gym/wellness reimbursement; they also
have quarterly team outings, access to an art program, and onsite massage sessions.
Twitters San Francisco employees enjoy a daily catered breakfast and lunch, weekly in-office
yoga and pilates classes, and discounts on Zipcar and wireless service.
Yammer employees have a fully stocked kitchen (with free beer), bring their dogs to work, and
take vacation whenever they need it; and did we mention cupcakes on Valentines Day?
Zynga employees eat free meals and snacks; their vacation policy is please rest and take
some days off; workers play Nintendo, arcade games, Xbox 360 and PS3; get free massages,
reflexology and acupuncture sessions, and haircuts; dogs are encouraged at work, and theres a
monthly poker tournament.

So, how will you compete?

learly, not every company can or

should compete with the most
extreme policies listed above; fortunately, you dont have to. Whats

important is that you offer pay and benefits

(both traditional and soft) that help you remain
competitive with those organizations that
compete with you for employees.

Is Your Organization Listening to Employees?

75% 59% 40%

of organizations reviewed
their benefits programs
annually (SHRM)

of employees now say flexible

scheduling (determine ones own
schedule) is important (Spors)

of companies now offer some

form of flexible benefits, with a
further 12% looking into it
(Thomsons Online Benefits)

4 out of 5

UnitedHealth Group employees who were allowed to volunteer during work time said they
feel better about their employer (Vozza)

And implementing these soft benefits programs is easier than you might think. Here are a few tips
from the experts:
Build a benefit package that is congruent with your organizations brand. The soft benefits you
choose should support the organizational culture you are trying to build.
Select benefits that are likely to appeal to the type of employees you are trying to attract.
Identify ways to remove obstacles that stand between your organization and the employees
you would like to recruit. On-site day care is a good example.
Demonstrate your organizations commitment to a healthy work/life balance.
Leverage your positive relationships with existing staff members to keep tabs on other companies benefits programs; find out what soft benefits resonate with them.
Look for low-cost benefits that are likely to have a high perceived value among your employees.

 Look closely at educational, professional, and career development benefits, as these may
save you salary costs in the future. This is especially important if your success is dependent on a
highly skilled and well-educated workforce.
Consider benefits that directly address stresses caused by the work environment. For example, jobs that require extreme concentration become tedious after a few hours, and productivity
increases when workers get up from their chairs and engage in some physical activity.
Promote flexible work arrangements like job sharing, telecommuting and flexible hours, for
positions that will not be negatively impacted by these approaches.
Improve your employee communications with respect to benefits. Encourage employees to
use their benefits. This will have a positive effect on morale and a viral effect when it comes
time to recruit new employees.
Brand your soft benefits program. Package it to create excitement among current and prospective employees.
Remember that soft benefits are supplemental benefits. They are never a suitable replacement for more traditional benefits like healthcare, 401(k) benefits, or paid vacation time.

About the Author

ichael Zimmerman is the Senior Marketing Strategist at MarketPoint

LLC, a business consulting firm specializing in strategic communications, brand management and outsourced marketing. Calling on 36
years of management experience, including two CEO positions and
several marketing leadership roles, Michael is a regular contributor to SmartCEO
Magazine (New York, Philadelphia, Baltimore, and DC editions); he has been published in Social Media Today, Technorati, The Social Customer, and Sales and Marketing
Management Magazine, and speaks frequently at area universities.

Jenna George contributed research for this whitepaper.

Copyright 2015, MarketPoint LLC

Works Cited
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<http://www.prnewsonline.com/featured/2012/10/01/theres-nothing-like-soft-benefits-to-keep-and-attract-top-talent/>.
Vozza, Stephanie. Why Every Company Should Pay Employees To Volunteer. 11 March 2014. Blog. 1 November 2015.
<http://www.fastcompany.com/3027465/dialed/why-every-company-should-pay-employees-to-volunteer>.
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Copyright 2015, MarketPoint LLC, Havre de Grace, MD. Reprints by permission: 410.942.0600