Bankers’ bonuses may claim all the column inches, but a growing number of companies are offering their employees far more imaginative incentives beyond financial benefits.
From in-house yoga classes and dog-sitting to free holidays and academic courses, this new era of employee perks and gifts has in part arisen from the recession – with pay slow to rise, employers have had offer other incentives to aid staff retention and boost morale. It’s also in tune with the values of Millennials, now the largest generation in the workforce, as 42% of junior staff believe a good work-life balance is important compared with less than a third at board level, according to a study by The Future Workplace. “We’ve seen over the last few years that businesses need to take a fresh perspective when reviewing their business incentive schemes – as surprisingly many employees want something other than financial rewards,” explains Endaba’s Managing Director Patrick Egan.
As part of a Market Intelligence report produced for one of our clients, a leading global restaurant business, we investigated what best-in-class competitors were offering. Examples included free on-site beverages, food and Childcare Centres, while [at one company] staff with +17% sales increase would receive a free car of their choice to drive for one year – complete with company and ‘Symbol of Success’ scheme logos.
Netflix have announced that they are starting an unlimited leave policy for new mothers and fathers for the first year after the birth or adoption of a child. As part of this policy, employees will continue to receive their normal pay and are able to return to work part time or full time afterwards or they may return to work and take additional time off, if needed. This policy exceeds typical leave for businesses in the US. “Netflix’s continued success hinges on us competing for and keeping the most talented individuals in their field,” Tawni Cranz, chief talent officer at Netflix, said on their website blog. “This new policy, combined with our unlimited time off, allows employees to be supported during the changes in their lives and return to work more focused and dedicated.”
In a similar move earlier this year, Sir Richard Branson is offering male employees at Virgin what seems to be Britain’s most generous paternity leave deal. The offer extends to both male and female employees and this too exceeds the new laws on shared parental leave that came into effect in April. Men who have 4 years at the company will be entitled to a year’s full pay on paternity leave. Last year, Sir Richard also offered his employees the chance to take unlimited holidays throughout the year in order to improve morale, creativity and productivity, inspired by the success of Netflix’s non-policy on holidays in 2010.
At healthcare company Roche on-site facilities include a physiotherapist, chiropodist, massage therapist and sleep pod, while aerospace engineering firm Finmeccanica UK focuses on discounts that help employees enjoy their leisure time, negotiating deals with local supermarkets, golf clubs and spas.
The UK’s Department for Work and Pensions has gamified the process by creating a virtual rewards platform called “Idea Street”. Points are earned for submitting and further developing ideas, and invested into others’ promising ideas. It had approximately 4,500 users within 18 months and generated 1,400 ideas.
Others are putting their original spin on financial compensation. For example, online clothing retailer Zappos.com has pioneered peer-to-peer rewards, whereby high-achieving employees are able to ‘pay it forward’ and award cash bonuses to other colleagues.
In this way incentives become a key way to hero behaviour or values the company wishes to promote – whether it’s philanthropy (London creative agency Dalziel and Pow gives staff a paid day off to volunteer with a charity of their choice) or positivity and resilience. US software company Intuit even bestows a ‘Failure Award’ on the team whose unsuccessful idea resulted in valuable learning, as part of a company-wide ceremony.
Financial rewards are always welcome of course, as is constructive feedback and praise, but recognition should be more than that. Less mercenary, more meaningful – these types of alternative reward can foster a deeper, more personal connection between employer and employee. By going the extra mile with these sorts of relevant, life-enhancing incentives the company ultimately reaps their own rewards: a more productive, content and loyal workforce, which ultimately reduces staff churn and recruitment costs. As Sir Richard said in a statement, “If you take care of your employees, they will take care of your business.”