As well all know, employee benefits and perks play a significant role in job satisfaction and can often be the deciding factor when choosing between job offers. In recent years, companies have offered various employee perks and benefits to attract and retain top talent. However, as the economy experiences its ups and downs, have you ever heard of a perk-cession? As a business owner, should you be worried about a perk-cession? In this blog, we’ll explore the potential impact of an economic downturn on employee benefits and what workers can do to ensure they’re prepared for any changes that may come their way.
What Is A Perk-Cession?
A perk-cession refers to the trend of employers scaling back on workplace perks and benefits. Business owners have begun realizing that they may have adopted the idea of offering additional perks too quickly, as employees nowadays are becoming more interested in perks that can improve their overall quality of life and work experience. You may be wondering what specific perks are being scaled back. Think about the perks outside of your traditional benefits, which can include the following:
- Gym membership reimbursements
- Social events
- Company outings
- Catered meals
- Retreats
- Conferences
- Home office stipends
Why Is This Happening Now?
While the trend of offering additional perks to employees has been on the rise for several years, the perk-cession is said to be caused by various factors. The COVID-19 pandemic has significantly impacted the economy, leading many companies to reassess their budgets and expenses. In the wake of the pandemic, businesses have had to begin implementing cost-cutting measures, and employee perks and benefits have been among the first to go. On top of that, the job market has become increasingly competitive, with companies struggling to find and retain top talent. This forces businesses to offer additional perks and benefits to lure in employees. However, as the job market becomes more crowded, companies may be scaling back on perks, as they can no longer afford to offer them to every employee. Ultimately, the trend of providing additional employee perks and benefits has reached its peak, and companies have realized it’s no longer sustainable.
To cut costs, Google began cutting back on employee perks such as fitness classes and office equipment. Meta announced their plan to cut an additional 10,000 employees and ended free laundry and dry cleaning services for their employees. This is only the beginning of yet another period of unprecedented times for the workforce.
How You Can Respond To The Perk-Cession
During these challenging times that require significant decisions that will impact your business, it’s critical that you consider your employees as they’re your biggest asset. To ensure your employees are aware of what’s happening, consider taking the following steps:
- Communicate openly and transparently: You must be open and transparent with your employees about the company’s challenges and the measures being taken. Regular communication through company-wide emails, town hall meetings, or one-on-one discussions can help build trust and maintain employee morale.
- Solicit feedback and act on it: Employers should solicit feedback from their employees on what benefits and perks they value the most and use the information to make informed decisions about their benefits packages. This ultimately helps ensure that your company provides the benefits that matter most to employees. It can also aid in deciding whether to eliminate a perk or benefit.
- Focus on non-monetary perks: Consider focusing on low-cost perks that are still valuable to your employees. For example, offering flexible working hours, training and development opportunities, or recognition programs can help to maintain employee engagement and loyalty.
- Be creative: As a business owner, get creative with the perks you offer to make up for the cuts in other areas. Have your leaders/managers help. Perhaps instead of providing free lunches throughout the week, you could offer a monthly team-building event or a fun office challenge.
Consider Partnering With A PEO
As businesses navigate the uncertain economic landscape brought about by the COVID-19 pandemic, attracting and retaining top talent has never been more crucial. However, the perk-cession may leave some businesses struggling to provide competitive employee benefits and perks. That’s where a professional employer organization (PEO) such as GMS comes into play. When you partner with a PEO, businesses can offer their employees a wide range of benefits, from health care and retirement plans to wellness programs and employee assistance programs, at a fraction of the cost of managing these programs in-house. With a PEO’s support, businesses can still attract and retain top talent, even during tough economic times. Do you want to offer your employees the resources they need to thrive in and out of the workplace and stand out from your competition? Contact the HR experts at GMS, who are ready to help you.