Gone are the days when companies promised flashy cars and gourmet meals to attract and keep top employees. These days, practical tools for balancing work and life are the best reward, according to new research.
Companies that recently enhanced employee benefits tended to offer improved health care, more vacation days and flexible work hours, according to a survey released this week of 3,500 human resource and recruiting executives.
As practical benefits are on the rise, offers of lavish luxury benefits are on the wane from the late 1990s, said Heather Galler, chief executive of JobKite.com, an Internet job site that conducted the weeklong e-mail survey in late July.
Then, luxuries such as nice cars and on-site game rooms were common, whereas now they are a rarity, Galler said.
A former recruiter, she recalled one, now-defunct, hi-tech firm that gave BMW cars to each employee, including secretarial staff.
There were all kinds of chocolate-covered carrots hanging out there, like Mercedes leases and chef-prepared meals, she said. It was the complete opposite of what's going on now.
Of the companies that increased benefits in the last six months, the survey said, 88 percent expanded health care coverage, 41 percent increased paid vacation days, 36 percent added flexible worktime or telecommuting and 69 percent added financial incentives such as stock vesting, increased pension plan contributions, raises, bonuses or relocation packages.
The shift to more pragmatic benefits reflects what employees are telling companies they want, experts say
At the Aflac insurance company in Columbus, Georgia, which is launching a new work-from-home program next week, interest from employees far outweighed the number of slots available, said Amy Giglio, Aflac's manager of talent acquisition.
There were three times as many applicants as there were openings, she said.
It's the younger generation, Giglio said. They want to experience life. They don't want to work as hard as they've seen their parents work.
We're seeing 'What can the company do for me?' as opposed to 'What can I do for the company?', she said.
More pragmatic benefits can build better relations between employees and employers than flashier benefits, experts added.
Companies were losing employees to other companies that could 'one-up' them, Galler said. Benefits that keep employees dedicated, such as flextime, those type of workplace benefits, are going to be long term.
After the bursting of the dot-com bubble of the late 1990s and the attacks of September 11, people care more about stability and longevity, and they care about companies that care about them, Galler said.
JobKite.com received 263 responses from public and private companies, 56 percent of which said they have made significant enhancements to employee benefits in the last six months.