Connect with us

Hi, what are you looking for?


Can’t give employees raises? Add benefits

DESPITE FEARS of a slowdown, the labor market is still pretty tight. Most companies aren’t laying people off. They are more concerned about retaining the workers they have. But how? Inflationary pressures mean employees want raises, but employers might not want to grant pay increases in an uncertain economy.

Yet too often, companies overlook another way to boost employee retention and morale. Enhancements to benefits are often cheaper than across-the-board raises. There are usually also tax advantages both for employees and employers. Those that convince workers to stay are those that increase what academics call “employee embeddedness.” In other words, they entangle the employee in the organization in a way that makes it tough to escape, er, quit. While nap pods, on-site yoga, and free food got a lot of attention during the tech boom, these sorts of perks are probably better for impressing potential recruits than retaining existing staff. And the most common benefits in the US are more pragmatic: paid vacation, health insurance, a retirement account.

And practical, valuable benefits are what companies are now focused on improving. A few weeks ago, insurance company MassMutual announced an expanded caregiver leave policy, offering eight weeks of paid time off for employees who need to care for a loved one — any loved one, not just an immediate family member. Last fall, Bank of America announced a sabbatical program. An increasing number of US airports are opening daycare centers to help workers with child care — something also possibly coming for employees of chipmakers. And of course, in the wake of the Dobbs ruling overturning Roe v. Wade, several US companies announced that they would pay for travel for employees who needed to cross state lines to access abortion care.

Some of the enhancements are aimed directly at increasing retention by combating the burnout many workers are feeling right now. An array of smaller firms have recently announced two-week vacation mandates, 60-day digital nomad programs and — in the UK at least — four-day workweeks.

Yes, one can find examples of firms that went in the other direction. Hulu, for example, slashed its paid parental leave program from 20 weeks to just eight. (The US has no federally guaranteed paid leave.) Yet firms like Hulu are the exception.*

Companies have clawed back some COVID-era perks such as free lunch for in-office workers, subsidized parking, and, most controversially, flexibility around how often to be in the office. But even the rigid return-to-office plans pushed by some Wall Street firms are an outlier. Data from economists Jose Maria Barrero, Nicholas Bloom, and Steven J. Davis suggest that as of Jan. 1, 2023, almost 20% of workers able to work from home were still working fully remotely.

By and large, it seems that more firms are adding benefits than slashing them. But for employers, this raises a challenge: how to stand out from the pack? One option is to consider adding a less common benefit like paid parental leave, paid mental health days, on-site child care, or a sabbatical program.

Then there is bang for the buck. Retirement benefits aren’t rare, but they are enormously financially valuable to employees. Conversely, I don’t think any employee joins a company for the dental plan, and a perk like dry-cleaning drop-off isn’t going to prevent anyone from leaving.

The opportunity to take a sabbatical — paid or unpaid — is still pretty unusual, but many long-serving employees consider that career break priceless. When Kira Schabram, Matt Bloom, and DJ DiDonna interviewed 50 employees who took a career break, not one regretted it. (Research has also found benefits to the organization; when senior leaders take a career break, it can give more junior employees a chance to grow in their jobs.)

A benefit need not cost an employer a lot of money to have a high dollar value to an employee. Consider flexibility. At firms where employees are more or less always-on — you know, the so-called laptop class — it costs firms little to give workers discretion over when and where they are working. Flexible work is associated with lower rates of burnout and higher intent-to-stay. And workers can save real money when they have more control over the particulars of their schedule and don’t have to shell out for commuting costs, takeout lunches, or the fees daycares impose for late pickups. It’s not surprising that despite the headlines made by some CEOs, most firms seem to be just fine with a hybrid-work approach.

And when you can’t give employees a 6% raise to keep up with 6% inflation, benefits are among the best ways to convince valuable employees to stick around.

* A flurry of headlines have claimed that firms are broadly cutting back on parental leave, but these stories all stem from the same 2022 Society of Human Resources report. SHRM researchers told HR Dive that actually, the sharp increases it measured in paid family leave in 2020 and 2021 likely came from COVID-era federal requirements. When those emergency measures expired, parental leave benefits settled back to where they had been in 2019.


Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



VISUAL communications company Canva released on Thursday a suite of new features based on artificial intelligence (AI) to help both budding creatives and professional...


Finding your aesthetic and keeping in style, that’s the mark of this generation where self-expression is deeply being valued. More than their outfit, they...


PHILIPPINE COAST GUARD/HANDOUT VIA REUTERS MANILA – Maritime issues between the Philippines and China play an important part in relations between the countries, senior...


US Treasury Secretary Janet Yellen — REUTERS/GARY CAMERON US Treasury Secretary Janet Yellen sought to reassure jittery investors that American bank deposits were safe and promised policymakers had more...


SINGAPORE – Singaporean chip designer Eu Gene Goh is an electric-vehicle evangelist with two Teslas in the garage. But the car-tech enthusiast is also not ready to give...


STOCK PHOTO Image by Pexels from Pixabay BRUSSELS – European Union country leaders agreed on Thursday to fast-track reforms to the bloc’s electricity market meant to tame severe price spikes such...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.