Just as the work landscape has changed over the years, employee benefits have evolved, too. Embracing a unique mix can make all the difference.
Once upon a time in the United States, men were the primary wage-earners in two-parent households, employees expected to stay with the same company for a lifetime, and wages were the primary factor in deciding whether or not to accept a job offer.
For instance, according to a 1999 U.S. Department of Labor report, only 3.6% of married couples in 1969 had both spouses working full-time. By 1998, that percentage increased to 10.1%. In 2017, the number of married couples with both spouses working comprised 48.3% of the workforce.
My, how times have changed.
In a dwindling labor pool, benefits become more specialized
After rising steadily for decades, the labor market participation rate peaked at 67.3% in 2000, and then dropped to 62.7% by mid-2016. Combine that with the higher specialization of jobs requiring more skills (i.e., a higher educational level) and training, and the labor market is tighter than it has ever been. Employers have to come up with ever-more creative strategies to attract and retain top talent.
Benefits have had quite a history over the course of several years, with the continually changing work landscape. In the late 18th century, a glassworks company established profit-sharing as a way to keep and incentivize workers. Then came private pensions and group health plans. And later? Total rewards.
Today, a combination of healthcare, retirement, and a variety of other company perks helps employers draw the best-qualified people for their business pursuits. What it has ultimately created is a change in the perspective of benefits: a must-have.
HR finally enters the C-Suite
At the head of all this is the still relatively new role of Chief Human Resources Officer. The CHRO is tasked with shifting the current paradigm of policies and controls to focus more on aligning human-capital strategies with business goals. This role not only represents a major evolution of the workplace, it’s a milestone in the evolution of benefits.
Many companies tend to hire outside of HR when seeking a CHRO. In fact, Deloitte reported that from 2008 to 2011, only 34% to 38% of newly hired CHROs were promoted from within organizations—and, citing a Harvard Business Review article, “Instead of turning to career HR practitioners, companies are increasingly filling the CHRO role with leaders from functions on the business side, such as operations, marketing, or corporate law.” This demonstrates the expectations being put on this role to cover a number of factors pertaining to major business goals, past the historic approach for HR.
For the CHRO’s part, Deloitte says their top priorities need to be how to make the most of a tight labor pool while remaining closely in line with and accountable to their company’s objectives. Benefits, which historically make up about 31% of a new recruit’s total compensation package, are an increasingly important component to how successful the HR department is in attracting and retaining top candidates. The addition of the CHRO role, and the attention put on it, says a lot about how the philosophy behind benefits has evolved. Something that was once viewed as just another task or element of HR is now a driver of business strategy and a pillar of the C-suite’s priorities.
Embracing today’s standard can make all the difference
In addition to what have been typical and expected benefits for some time (PTO, health insurance, retirement plans), employees have come to expect the extra perks as well. For instance, HBR reported that while health insurance tops the list, work/life balance improvements such as remote-working opportunities and extra vacation time also rank highly in the most desired benefits—tuition reimbursement was next, followed by wellness benefits such as a free gym membership and fitness classes. According to a 2018 article in Employee Benefit News, a worker poll from Unum showed the most desired perks for employees involve flexible work options, like paid family leave.
Looking back at how the landscape has changed, the way we look at benefits now is truly different than when they first entered the workplace. The expectations surrounding them and the capabilities we have to address these new standards represent a remarkable transition. By understanding how history has brought us here, we can better comprehend how to use benefits to our advantage and make them the competitive element job candidates seek.