Tech companies are known for their lavish compensation benefits and perks: free kombucha, cold brew on tap, ping pong tables, and random famous people occasionally stopping by. It was fun and exciting at the time. With the pandemic and the Great Resignation, the workforce is changing. Priorities are changing. We all want our jobs that are both meaningful and bring joy. While employers are reacting to these changes, employee compensation planning is falling behind.
Hiring outstanding talent requires outstanding compensation, perks, and benefits. While employers are reacting to these changes, compensation benefits are falling behind.
Improving the system for benefits and compensation can be complicated, but it shouldn’t be. Not when employees are telling us what they want: compensation benefits that fit their lifestyles, instead of the other way around.
The Value of Flexible Employee Compensation and Benefits
Due to the drastic changes in the workforce and today’s financial market, employers have found themselves in a unique position: how can they support individual needs for their teams? Not every employee is the same, so a one-size-fits-all compensation program isn’t ideal. And managing multiple compensation and benefit options isn’t realistic either.
So why not consider flexible compensation and benefits that actually help employees reach their personal goals?
Workers want personalized benefits that can activate what’s best for them. They want more than just a paycheck. In our latest Future of Work survey, 62% of workers shared they would prefer to continue working remotely over getting a $3,000 bonus and work in-person.
These changes haven’t gone unnoticed, especially by HR teams. 98% of HR staff felt the pandemic had transformed their role, while 70% stated that the pandemic had been one of the most challenging periods of their careers. The responsibility of planning and offering employee benefits that can attract top talent has become more difficult.
By offering more flexible compensation benefits, employers can simplify that process, and encourage growth both inside and outside of work.
Most Valued Compensation Benefits by Employees and Job Seekers
Compensation is a major factor in considering whether to accept a job offer. The data backs this claim over and over. Remote.com interviewed 2,500 tech workers and found that 63% of them see compensation as one of the most important benefits when seeking a new job.
Our report also dives into how workplace compensation has evolved since the pandemic. Here’s what we heard.
The most valued benefits were ones that offer flexibility, improve work life and financial wellness. These valued compensation programs include:
- Flexible work schedules — such as more lenient WFH policies and 4-day-work weeks, to allow more time for personal goals
- Educational assistance — to help employees pay off loans faster
- Career coaching and training—so employees can unlock their full potential and hone their skills
- Support for their side hustles — to allow employees to embrace entrepreneurship
- Family planning — like childcare, and healthcare plans that cover fertility treatments
- Flexible bonuses — to give employees more money upfront to build financial wellness
At Worklife, we believe employers can play a more active role in helping employees with their personal goals. This is why we invested in Keep Financial, a platform revolutionizing compensation with tech, offering forgivable loans as a recruiting and retention tool.
Keep: Flexible Vesting Cash Plans as an Employee Benefit
As founders of Kabbage (acquired by American Express), Rob Frohwein and Kathryn Petralia had experienced the pain points of traditional hiring, from long recruiting cycles to high employee churn. They went to figure out a solution that would solve these pain points, but also bring long-lasting financial freedom to employees.
Frohwein and Petralia started Keep Financial to help companies design compensation programs tied to retention and performance, so there’s a return on investment (ROI) to boost the company’s growth.
Keep Financial does it in the form of flexible vesting cash bonuses.
What are Vesting Cash Bonuses?
A vesting cash bonus is a type of compensation you get immediately, where you can take part of the bonus at any time, regardless of how long you work there. Depending on the plan, the employer pays the bonus at different points. At vesting milestones, the employer pays down the bonus while the employee is at the company.
The top benefit of vesting cash bonuses is that it gives employees extra money to use for whatever they want.
Forgivable Loans vs Vesting Cash Bonus Plans
Vesting cash bonuses sound similar to employer-forgivable loans, and forgivable loans are nothing new. They’ve been around for a long time, but came into public focus around the pandemic when they were used as government-backed funding for companies facing pandemic related financial challenges.
For context, employer forgivable loans are loans you get from your company, where repayment is contingent upon your continued employment with them.
Currently, employers have to go through a financial institution and keep track of these payments. With Keep Financial, you don’t have to worry about that. They are a licensed lender in 46 states and own that process for you.
Solving Traditional Compensation: Win the Battle for Talent
The job market is competitive, and the rise of WFH and hybrid work has shifted traditional employee values. Innovative companies need innovative compensation to attract the best and increase retention.
One of the main struggles with traditional compensation options is the inability for teams to understand how their achievements are tied to their benefits. And with today’s environment made unstable by inflation and a potential economic downturn, using vesting cash bonus plans can have an immediate and meaningful impact on your employees’ lives.
Keep’s vesting cash bonus plans can help enhance performance of your team while they feel rewarded financially for their contribution, and longevity at the company.
Boost Productivity and Happiness with Financial Wellness
Reducing financial stress in the current economy is a powerful motivator. Financial wellness is just as important as your physical and mental health. The American Psychological Association estimated that employee burnout and stress cost employers $300 billion annually. This number results from high turnover, increased healthcare costs, and lower productivity.
On top of that:
- 82% of workers experience financial stress.
- 34% can’t pay month-to-month expenses.
- 45 million Americans have federal student loan debt (on average around $30k).
- 25% of workers have zero emergency savings.
With inflation on the rise, so does the stress of financial security. This kind of pressure can eat away at productivity—and workers under this kind of stress are 10 times more likely not to finish everything they need to in a work day.
That means your output isn’t as efficient as it could be.
Taking a more active role in helping your employees move toward financial wellness can increase engagement and productivity at work. Take student loans as an example. When employers contribute money to student loans, their workers can pay off their loans years earlier and save thousands of dollars. People are looking for this when they’re searching for a job, and it has an influence on retention rates:
90% of job seekers look at student loan programs like this when deciding whether to stay or leave a company.
How to Build a Workplace Where Personal Goals are a Priority
Compensation programs for your employees can take many forms, from flexible work schedules, supporting your staff’s side hustles, and rethinking vesting cash bonuses with Keep.
When it comes to employee wellness, here is how you can help them achieve their personal goals:
- Instead of the traditional work week, adapt to a flexible schedule
- Implement student loan payment and new compensation plans
- Invest in coaching or training opportunities for your team
- Embrace the side hustle while working full-time
Flexible working hours are here to stay. Many have ditched the standard 9-5 and have mastered asynchronous work.
While some companies decided to allow hybrid or remote working schedules to accommodate a more flexible work schedule, others have turned to a four-day work week.
In our future of work survey, 87% of workers supported the idea of a four-day work week. If you’re considering implementing a four-day work week, we suggest:
- Aligning your policies to your mission
- Eliminating or reducing meetings
- Monitoring for overwork and providing additional support resources
- Not sacrificing pay or company benefits
- Understanding that company culture might change, and that’s okay
- Testing, refining, and optimizing your policies
Helping Pay off Student Loans
We’ve already established how much employees value student loan assistance, but what does that look like in practice? In some cases, employees are given a certain amount of money each year to help them pay off their student loans. Employers can cap these payments at a certain amount, but others can choose not to set a cap.
For example: giving an employee $2,000 each year, but with a maximum amount of $10,000. Once the company has given $10,000 total after five years, the perk ends.
Helping with student loans is becoming increasingly popular, especially since they’re considered an education assistance benefit until December 2025. It’s a win-win situation, as companies can take advantage of these tax breaks to help their employees.
Companies can provide up to $5,250 per employee per year for tuition, tax free.
Career Coaching and Training
Executives, athletes, and top performers continue to level up and grow thanks to coaching. If they can have a coach, why shouldn’t you?
Career coaching is one of the best ways to show employees that they are seen and valued.
According to BetterUp CEO Alexi Robichaux, “the ultimate sign of an employer respecting an employee is investment. You’re essentially tapping someone on the shoulder and saying, ‘Hey, you’re high potential. Here’s a real human expert to have in your pocket as you work and engage with the world.’”
Offering coaching as a standard perk shows your team that they are seen and valued. Think of it as part of mental fitness. We take care of our bodies by going to the gym. We should also take care of our minds by having a coach who can help us with our confidence, decision-making process, and productivity.
Employee discount programs
Employee discount programs are also another company benefit to consider. You can provide discounts to specific services or offer a payment program through a payroll deduction, and offering a discount program can provide extra support to employees in both their professional and personal lives.
Employee discount programs provide workers with access to products and services at a discount.
Worklife company Mmhmm offers one of those programs. Mmhmm gives their employees $800 each month to spend on whatever they need for their workspace. Employees can use it on new chairs, upgraded laptops, or whatever they wish. On top of that, their policy is built on trust. Employees aren’t required to submit receipts for those purchases.
Support Side Hustles
With the workplace changing, so has the culture around side hustles. Today, around one in three Americans have a side-hustle, and having one job at a time has become a thing of the past.
Side hustles allow employees to build their own businesses and pursue their own passions outside of working hours. Offering support to your team for their side hustles also reduces the impulse to switch careers, and offers flexibility and support to your employees.
I’m a strong believer that anyone should have the ability to start a business or a creative project. This is why I love Shopify’s entrepreneurship culture.
Shopify execs encourage and support internal side hustles. The company hosts internal business competitions, allowing employees to expense up to $1,000 in business-related costs per year.
Shopify’s president Harley Finkelstein co-runs a Shopify-powered DTC brand called Firebelly Tea with DavidsTea founder David Segal. By running this business, Finkelstein had a stronger understanding of how merchants use the platform. This benefit has helped more than 30 employees launch their own businesses and helped create the Shopify Mafia.
Really, Shopify is leading the way in removing friction for employees when it comes to compensation. They recently overhauled their compensation system to give workers more flexibility around cash, RSU, and stock options. Employees can now see exactly what they make and figure out what mix of compensation benefits they want based on their goals.
When deciding on compensation benefits for employees, it’s important to make these programs easily accessible and understandable.
Worklife tip: Track how often your employees use their benefits, so you know the ROI. This can help you decide what to invest in next.
Take an Active Role in Workers’ Goals to Stay Competitive
The days of in-office flashy perks are gone.
It’s no longer about a bigger paycheck or in-office benefits, but flexibility and support. To beat that constant cycle of finding and replacing talent, we need to adapt.
Too often company benefits are underutilized because employees don’t know how to use them or it doesn’t match what they care about. Employers who listen to employee preference on company benefits are poised to navigate their happiness, retention, and productivity.
Have examples of businesses offering flexible company benefits? We’d love to hear about it on Twitter.
Liked this? Also check out:
- Can You Start a Side Hustle While Working Full Time? My Colleagues Did.
- Career Coaching Should Become a Standard Perk – Here’s Why
- Preventing Employee Burnout Can Transform Your Company