Attract Top Candidates With the Pay and Benefits They Actually Want

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If you’re hiring in 2019 but not offering competitive benefits, you could be missing out on the best applicants

Despite being major private employers collectively, small businesses are, in many ways, still the underdogs. They have to work harder at everything, from front-office management to back-office operations — each new workday presents a new battle. When placed next to a Fortune 500 company, one can’t help but ask, “How can David compete with Goliath?”

But we all know how that story turned out. The key, as with any challenge, is to gain a competitive edge. To even the playing field between small business Davids and corporate Goliaths, TSheets and QuickBooks Payroll sought out what employees want from a pay and benefits package, to learn how small businesses can best compete for top talent.

 

Employees want paid holidays, sick leave

Because the U.S. is the only advanced economy without a federal PTO policy, the TSheets survey examined the state of paid time off among employees throughout the country, from how it is used to its perceived value. At a glance, we found:

  • 69 percent of respondents would reject jobs without any PTO.
  • The average PTO allowance is 11 days per year.

But PTO can include several types of time off (vacation time, sick time, bereavement leave, etc.), and not all types of PTO are created equally. Respondents in the TSheets survey ranked what they think employers should provide in a PTO policy, and paid holidays reigned supreme. This refers to federal holidays, such as Thanksgiving and Christmas, that private sector employers are not obligated to grant time off for, let alone paid time off.

Second to paid holidays was sick leave, or paid absences from work employees can use to seek medical care for themselves or immediate family members. Additional data from the survey reveals how the lack of this provision may be the reason almost 90 percent of respondents have gone to work unwell.

More unfortunate is how 32 percent of employees say they feel pressured not to take time off. Meanwhile, those who classified their work-related stress level as “unhealthy” were also less likely to have any paid time off, factors that can lead to burnout and a short workplace tenure.

 

 

Employees rank flexible schedules as highest workplace incentives

In the QuickBooks Pay and Benefits Report, survey respondents were asked to list the incentives that would ultimately increase satisfaction and retention. Their responses corroborate the TSheets PTO findings, in that different incentives appeal to different people.

Healthcare is a must for some, but a gym membership is irrelevant. And parental leave won’t carry the same weight for employees without children. Incentives from the Pay and Benefits Report range from performance-based raises to working from home, emphasizing the importance of finding the right person for the role, instead of just filling the seat.

 

 

Employees don’t want benefits and bonuses that keep base pay low

The good news is that many employees are getting what they want. Seventy-four percent of respondents, QuickBooks reports, got a raise in 2018, while 23 percent of respondents are eligible for a bonus in 2018, versus just 16 percent in 2017.

This should amount to additional good news. But when it comes to compensation trends, employers should tread carefully with bonuses and benefits, as employees can see right through an offer that’s pretending to be competitive. In fact, employees cite a low cost of living (36 percent), benefits (30 percent), and bonuses (27 percent) as the bait-and-switch decoys employers use most frequently to avoid giving proper raises. One in 10 employees also says the offered benefits have decreased in the past 12 months.

 

Caution: Even great benefits can’t remedy a toxic work culture

In the end, the same culprit emerges from both surveys. At the root of employee unhappiness is a toxic work culture where the employer just wants to squeeze employees bone-dry. This could be why 47 percent of employees plan to change their jobs in the next 24 months, even though an overwhelming 75 percent say they are either “satisfied” and “very satisfied” with their jobs.

In his book, “Small Giants: Companies That Choose to Be Great Instead of Big,” journalist and Inc. editor-at-large, Bo Burlingame, discovered growth and profit should not be a business’ only measures of success or recruiting appeal. Instead, a thriving, value-driven culture creates happy employees who, in turn, become the business’ most powerful recruiters.

So as you set out to hire, despite the out-of-reach resources, know there are plenty still within your control. How you choose to use them is entirely up to you.

10 Comments

  1. Marila Marrero says:

    Giving your employees the benefits they deserve would make your business a great place to work. Also would be a competitive business with the great employees you’ll be recruiting. If it wasn’t for the employees and their hard work no business would be where they are right now.

  2. Kelli Wilson says:

    Why is there no mention of health insurance on this list? Everyone I have ever spoken with has said they prefer their employer to offer a group insurance plan, rather than being forced to use the Exchange. This is exactly the predicament I am facing now, in my current job.

    • Dottie Chong says:

      Hi Kelli, thank you for sharing because that’s a great point. If you click on the individual link for each survey, you’ll see how respondents were asked to rate between pay and benefits (such as healthcare, flexible work schedule, dental care, even a retirement savings plan), as well as pay and paid time off, and pay won overwhelmingly in all instances! It was definitely a surprise for us as well.

  3. Siscily Rose Espirito says:

    Article does not include how many respondents voted to come up with these stats?

    • Dottie Chong says:

      Hi Siscily, thanks for your question. If you click on the individual link for each survey, you will find details on the methodology. Very briefly, 500 employees took part in the PTO survey by TSheets, while 1,000 employees from companies with 20 workers or fewer were surveyed in the QuickBooks Payroll survey. Hope this helps!

  4. As a small business employer, I was shocked to read the following statement in this article “… employees can see right through an offer that’s pretending to be competitive. In fact, employees cite a low cost of living (36 percent), benefits (30 percent), and bonuses (27 percent) as the bait-and-switch decoys employers use most frequently to avoid giving proper raises.” This statement insinuates that small businesses are generally trying to deceive their employees by giving them benefits and bonuses! What a divisive opinion and interpretation.

    As a small business owner, we go with less so our employees can have more. To hear health care benefits and holiday bonuses be described as essentially a con job is painful and upsetting. We give everything we possibly can to remain competitive and attract and retain employees, this includes pay decreases for ourselves and going with less for our own families just to keep our doors open. We work right along side our employees and to Marila’s point above, we wouldn’t be where we are today without EVERYONE’s hard work. It seems almost lost that most small business owners are following their dreams to create their own business, taking significant financial risk, and hopefully they are able to create fun and engaging work places for other people to enjoy.

    I think an article that shares information about how small businesses reward and compensate their employees with a positive message attached to it would have been much more useful and could have helped employees see the good in their employers rather than trying to make them out to be bad.

    • Dottie Chong says:

      Hi, Colleen. Thank you for sharing your thoughts (we read and appreciate every single one)! We agree. It is unfortunate that many employees feel the way they do, and we recognize their responses aren’t a universal representation of how every employee feels or employer acts. Our goal is to present all sides of the story, like how we dedicate an entire week of content to Small Business Week. Here we highlight all the sacrifices business owners make, like paying their employees to more than they pay themselves, rarely taking time off, and being the first rise and last to bed. We love employees and fight for the success of small business owners everywhere. Thank you for what you do!

  5. Sharla Holladay says:

    RE: this comment from Colleen. TRUTH. But the reality is that employees DO feel this way. It’s just us small business owners that know the truth about our sacrifices.

    “… employees can see right through an offer that’s pretending to be competitive. In fact, employees cite a low cost of living (36 percent), benefits (30 percent), and bonuses (27 percent) as the bait-and-switch decoys employers use most frequently to avoid giving proper raises.” This statement insinuates that small businesses are generally trying to deceive their employees by giving them benefits and bonuses! What a divisive opinion and interpretation.”

  6. TD says:

    We should re think why employer provided health insurance is so important. Why is your employer responsible to decide what level healthcare your family receives? If you’re a younger employee in a company with older employees, you will pay higher premiums because you’re subsidizing them. If some of those employers smoke, you’ll pay even more. That’s not fair for a healthy, younger employee who has no control over his colleagues health choices. Why not get your own health insurance for your family that is priced per your circumstances. Then an employer can set up a benefit program that reimburses you for your premium expenses, in whole or a percentage.
    Group healthcare costs more for the employer and employee. Everyone loses. We need to rethink this.

  7. Marilyn says:

    Re TD’s comment: Yes it might appear unfair that you pay for health insurance when you are healthy and do not need it. However, remember that you too will age and be in the position of those that you now resent because you think you are subsidizing their poor health. Do you resent paying for motor vehicle insurance? I have not had an accident in the last 15 years yet I am required to have motor vehicle insurance. Am I subsidizing those motorist who have accidents? Do you feel the same way about motor vehicle insurance?

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