Gone are the days when a fat paycheck was all it took to keep an employee happy. Today, the millennial workforce has begun to see beyond mere compensation while choosing a job that fits their career goals. There seems to be a transition toward a forward-thinking approach to creating a safety net for themselves and their families. Thus, they have started to prefer jobs that provide the right balance of employee benefits and compensation.
In a study conducted by Glassdoor, over 80% of employees are likely to opt for a job that offers additional perks and benefits, rather than higher pay. Thus, the one size fits all approach of companies has long been replaced by a more benefit-heavy compensation that suits the personal requirements of employees.
Why Are Employees Opting for Additional Benefits
So, let us understand why has there been a shift of employees preferring additional benefits over higher compensation packages –
Healthcare Can Be Expensive
With over two-thirds of people citing healthcare as the primary reason for bankruptcy, it has become a primary issue of concern for every salaried employee. A huge paycheck holds little value if the employee has to spend most of it on healthcare costs.
Indians spend over $72 billion a year, paying for health and medical bills that are not covered by their health insurance. It continues to be the single biggest reason for Indians falling below the poverty line every year. So, with the millennial workforce remaining updated with such information, it is not surprising that they consider robust healthcare insurance as a must while choosing their jobs. With an exponential rise in health risks globally, it is indeed one of the most valuable benefits that an employee can have in the present day.
Importance of a Secure Future
Every employee is inevitably working to ensure a financially secure retirement plan in the future. However, more than 51% stated that they had not planned for retirement at all. With average life spans increasing and traditional family structures collapsing, Indians heading for retirement are a worried lot.
A robust retirement fund, provident fund policy, or similar benefits are definitely on the priority list of most millennial employees who would want financial stability after retirement. Employees also prefer the option of matching the employer’s contribution to such retirement funds to help them grow stronger. Thus, a good retirement plan definitely ranks higher than a bigger pay package for most millennial employees looking for a secure future.
Prioritizing Work-Life Flexibility
Employees' efforts to achieve a healthy work-life balance have been severely hampered. Worse, if this issue is not addressed, ongoing workplace stress may harm employee engagement, impede productivity, and increased disengagement, not to mention have a long-term impact on employee health. HR teams must act quickly to improve the situation before their employees burn out.
In the light of prioritizing employee wellbeing, a more flexible working model has garnered the approval of a considerable share of the global workforce due to the increased flexibility that it provides. Several millennial employees have started to seek jobs that offer the option of working from a hybrid workplace setting for at least a few days a week.
These are only some of the reasons why employees today have started to prioritize additional benefits over a higher CTC. The fact of the matter is that companies can no longer view employees solely from a professional lens, pay them a good CTC, and ensure a good retention rate.
The need of the hour is a holistic compensation that is balanced between good pay and employee benefits. Let’s take two examples for a better understanding.
Assessing the Dilemma
Imagine you’re offered a job that has a great CTC but no benefits and another one with good pay but several additional benefits like health insurance, retirement options, and a flexible work-life balance. Let’s say you opt for the former where you get great pay. You’d still have to pay for your healthcare insurance and save up for your retirement fund yourself. This will lead to a consistent drain on your savings with the same or lesser pay. Further, you would have to work from the office every day and it will eventually put pressure on your emotional and social well-being.
In contrast, if you choose the latter, you would not have to pay for your healthcare insurance, nor do you have to worry about your retirement savings. Your healthcare would be paid for by your employer and you can retire with a robust retirement fund. Additionally, you can enjoy the flexibility of the job with a great work-life balance.
Well, the choice would obviously be the latter, where you can have a more stress-free and financially secure career.
Interests, backgrounds, and perspectives differ from one employee to the other. So in conclusion different employees will want different things. For example, while some employees may prefer benefits that provide memorable experiences, others may prefer benefits that have a significant impact on their day-to-day lives.
The one-size-fits-all approach simply does not work, and no matter how well-intended an organization is, there are boundaries to what it can offer. As a result, customized employee benefits and perks are the ideal solution for diverse teams.
This is something employees have successfully understood and is the reason why they prefer additional benefits over a higher CTC. So it is necessary for employers to create a personal relationship with their employees by providing them with benefits that address their unique needs.
Batik’s simplified employee benefits and perks platform aligns benefits with the needs of today's employees. It let’s your employees choose from a range of benefit categories from health, fitness, wellness, and travel to upskilling and gift cards. Each benefit offered on the platform improves an employee’s mental, physical and emotional well-being.