Senior Client Partner
Will New 'Sticky' Benefits Really Stick?
The labor market was tight. If specialists left, the team likely wouldn’t be able to replace them. It couldn’t afford to lose their talent. How could the company increase retention across the board?
In the early post-pandemic years, most companies were all about hiring, hiring, and more hiring. Given the extreme labor shortage, that approach made sense. But now firms are asking their HR departments to shift gears—to once again prioritize keeping people over attracting them. The question is, will it work? Experts say it’s a risky strategy, because over one-third of workers plan to leave their jobs this year anyway, and companies have a track record of flubbing their benefit offerings. “Too often, they fall flat and even run the risk of alienating employees,” says Tom McMullen, leader in the North America Total Rewards practice at Korn Ferry.
In the past, companies used golden handcuffs to keep employees around: benefits like parental leave kicked in after lengthy eligibility periods, and stock-investing periods were similarly drawn out, guaranteeing that people would stay for the long term. This approach is increasingly obsolete, especially given that most employees today are fairly new (2 out of every 5 have worked at their firms for more than three years). Instead, companies are building more personalized benefits around particular workforces and their needs. This might mean childcare and camp benefits for a workforce heavy on parents, or outdoorsy programming for a young workforce in the Pacific Northwest. “One of my clients found that bringing in food trucks once a quarter had incredible value for employees, more so than a holiday party,” says Ron Porter, senior client partner at Korn Ferry.
Data and structure are critical in undertaking this process, say experts. McMullen recommends starting with a mix of surveys, focus groups or sounding boards to suss out what benefits and programs employees value, followed by an implementation that’s integrated with the bigger company strategy. For example, if wellness is an important messaging theme at the company, the new offerings should directly tie into that. Then the programs should be assessed regularly, to see how employees are perceiving and using them.
As for which benefits to offer, the goal, says Ron Seifert, sector leader for workforce reward and benefits at Korn Ferry, is employee engagement, coupled with a sense that the company is investing in its people, cares about them, and wants to see them stay and grow with the organization. For ultimate stickiness, Seifert suggests a relatively cheap but powerful three-step program focusing on career growth. It could include communicating with employees about their opportunities for growth, helping them understand how to progress, and providing opportunities to move upward. All of this can require some training. “A lot of companies teach managers how to manage performance, not potential,” he says.
Porter says that the sweet spot is programs or activities that engage employees, help them socialize with one another, and improve their physical or mental wellness or productivity. These can be quite inexpensive—think triathlon training groups or gaming clubs—and greatly increase employees’ interest in staying around. As long as the clubs aren’t too sticky. “You don’t want people in chess club all morning,” laughs Porter.
For more information, please contact Korn Ferry’s Total Rewards practice.