#407 Benefits and Recruiting - an article by Niels Brabandt
Benefits and Recruiting
an article by Niels Brabandt
We need talent.
No one will dispute this sentence. We don't just have a talent shortage; we have a labour shortage. Excellent recruiting is crucial here. Benefits, the offers from your side to interested parties, are also decisive. We have just completed the first of Europe's major recruitment fairs in Hamburg, in northern Germany. Here, we saw a wide range of offers and a wide range of more or less deep understanding.
How to deal with benefits?
Pseudo Benefits
The number of alleged benefits that are not really benefits is growing every year. From fruit baskets to free coffee and water, even snacks are now being emphasised. Pizza parties, instead of a salary increase or 'exposure' instead of pay, flexible hours (with 24/7 availability) or unlimited holidays, which nobody takes in the culture of guilt, the range is constantly expanding. In some cases, organisations went so far that one logistics company emphasised the aspect of clean toilets for the drivers. There are problems with this aspect in the industry, but this does not turn clean toilets into benefits. The question is whether human rights or punctual payment will be mentioned explicitly at some point. An even more comprehensive list and the method that enables you to recognise when a benefit really is a benefit can be found in this week's podcast (see links below).
Evidence
Employee benefits have long been more than just a nice extra - they are a strategic success factor. Numerous studies and scientific models show this: Those who offer meaningful benefits not only win in the competition for talent but also promote motivation, productivity and company success.
Autonomy increases motivation and commitment. The Self-Determination Theory (Deci & Ryan, 1985) shows how important autonomy, competence, and social integration are for intrinsic motivation. Flexible working models—such as remote work—support precisely these needs. Studies such as those by Gajendran & Harrison (2007) or Tsedal Neeley (2010) show that employees working from home are more productive, more satisfied, and more loyal.
Leave and wellbeing pay off directly. Those who protect resources win in the long term—this is explained by the Conservation of Resources Theory (Hobfoll, 1989). Benefits such as sufficient holiday or mental health days offer not only improve wellbeing but also reduce staff turnover: according to Glassdoor (2020), the voluntary resignation rate drops by 41% as a result. The Gallup study (2017) even shows that companies with a strong focus on wellbeing generate an average of 21% more profit.
Development opportunities promote future viability. The Job Characteristics Model (Hackman & Oldman, 1976) emphasises how important development opportunities are for motivation and performance. According to LinkedIn Learning (2022), 94 % of employees prefer employers who actively support training and development. The SHRM confirms this: Companies with a clear development strategy achieve 92% more innovation, are 58% better equipped for the future, and are 52% more productive.
Wellbeing pays off twice over - emotionally and financially. The Job Demands Resources Model (Demerouti et al., 2001) shows how balancing demands and resources reduces stress. Investing in employee wellbeing pays off financially: according to Harvard Business Review (2010), every dollar invested saves $3.27 in healthcare costs and $2.73 through reduced absenteeism. A study by Krekel, Ward & De Neve (2019) also found that happier employees lead to a 20 % higher share price.
Recruiting: Benefits send strong signals. Benefits also have an external impact - according to signalling theory (Spence, 1973), they convey a company's values and culture. The PwC Future of Recruiting Survey shows that 70% of applicants specifically look for benefits, with 60% citing them as a decisive reason for choosing an employer (SHRM, 2023).
Real Benefits
Focus on a few categories: Time, health, independence/autonomy, future, value-add/value-creation.
Offer fair pay, regular adjustments or appropriate mechanisms, bonuses, profit sharing, retirement plans, stock/company shares, emergency funds or assistance loans when needed. In terms of working hours, offer real flexible hours, paid time off, sabbaticals, mental health days without hurdles, less day weeks (less than a 5-day week) as a unique selling point. In terms of work organisation, you offer hybrid work, remote work or work from anywhere. Home office budgets, days without meetings and a right to disconnect offer further attractive aspects; Health aspects are also increasingly coming into focus. Therapy allowances or access, help for parents and children, family planning assistance, preventive care, access to doctors - the list here can be long. Some companies now even offer this for employees' pets.
Personal development through seminars, coaching, mentoring, career paths, and help with education for family and children. Additional gifts or similar can be added at any time. In addition, there is a culture of excellent leadership delivered by professionally trained managers with guaranteed psychological safety and a culture in which diversity, equity, and inclusion are practised.
Conclusion: Benefits motivate and make you an attractive organisation. Benefits are an obligation, not an optional extra.
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More on this topic in this week's podcast: Apple Podcasts / Spotify
For the podcast transcript, read below.
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Contact: Niels Brabandt on LinkedIn
Website: www.NB-Networks.biz
Niels Brabandt is an expert in sustainable leadership with more than 20 years of experience in practice and science.
Niels Brabandt: Professional Training, Speaking, Coaching, Consulting, Mentoring, Project & Interim Management. Event host, MC, moderator.
Podcast Transcript
Niels Brabandt
Let's talk about benefits. And I don't mean handouts. I don't mean people who claim money from the state. I talk about benefits that we use in recruiting. We just had our very first of this this year's very first expo about talent and talent acquisition, including recruiting, the future staffing in Hamburg in Northern Germany, 1 of the leading expos, one of the first three or four major ones in whole Europe. And I was booked there six speeches in two days, so it was quite a busy day to say the least. And we talked a lot about employee benefits and recruiting. Let's face it.
We have a shortage of talent, but not only that, we have a shortage of, labor. We have a labor shortage. There are not enough people on the market to cover all the jobs as we like them to be covered.
And recruiting here is a decisive factor. Benefits play a major role here. However, the discussions we had were quite surprising from very positive to very negative. The question is how do we deal with benefits? And the first thing we have to talk about here is the pseudo benefits. So there are huge amounts of of of of benefits in job ads which are not really benefits. So when you, for example, say you have free water or free coffee, you might consider this a benefit.
I can tell you it is absolutely not because people think when you pay me appropriately, I can pay for my own water and coffee. So when you consider this a benefit, that is nothing that motivates me. The question often is people don't really know what should be put on the dropout. What is a benefit? What is not a what is not a benefit? And very simple, there's a technique that you can use which is called the reversion technique. You reverse what you said and then you see what comes out.
I'll give you an example. Let's say we're in London, United Kingdom, and you say we pay for your monthly TfL ticket all zones. That's more than a hundred pound a month, way more than a hundred pound per month. And when you say the opposite of that, the opposite is you do not pay TfL, and that would be a pity. And when you say, oh, what a pity, then it's a real benefit. So when people would be sorry when you do not do it, then it's a real benefit. Always take the opposite.
Reverse what you said. So instead of saying, we pay TFL, we do not pay it we do not pay TFL, and then when you do the opposite and say, oh, what a pity, then it's a real benefit. If you, for example, say free water, the opposite of that will be, we actually have a meter on the tap and you pay for the water you drink. That would not be a pity, that would be an embarrassment. And if you say the opposite is an embarrassment, it is not a benefit that you can sell to absolutely anyone. And I give you a full list of discussions we had where the vast majority, and I'm talking about people who apply or do not apply for jobs in your organization, massively agreed that we face pseudo benefits. And I give you a full list here.
So it started with a fruit basket, free water, coffee, and snacks because usually people can pay for them when you pay them well. When you say, hey, we have more team events instead of salary raise and it turns out because someone on glassdoor.com actually exposed you that you do pizza party every time the mood tips in the organization, you haven't won anything. When you say we do exposure instead of salary raises, exposure never paid the rent. And by the way, before someone now says, this is just another socialist claiming we need to do it x y z.
I'm not a socialist. You find me politically in the liberal conservative spectrum. We just have to talk about scientific evidence here and we get to that in a minute. When we and now we go on with the pseudo benefits. When one company claims you have flexible hours, but then the company claims flexible hours mean for both sides. And that means when I call you 2AM in the morning, and I'm not making this up, one person said it was nice to have flexible hours, but frequently, you will call between 7PM and 3AM in the morning to immediately drive to the office because, you know, flexible hours. That is not what people see as a benefit.
When you, for example, have something such as an unlimited vacation, it's often quite tricky due to law regulations in many countries not even possible in Europe, at least at the moment. When you have unlimited vacations but a culture of guilt, no one is going to take these vacations and that is going to make everything worse. There are good examples. For example, at Reddit, one of my friends worked there as a senior manager, as an executive, and he had unlimited vacations for his team. And he said to every single team member, I expect you to have ten days off per quarter of the year. And when now some people say, well, that's forty days a year. Exactly. Exactly. And he said, you can take more days off.
I expect you not to take less days off because we are achieving goals here, but we also need time to rest. When you and then we get to the next point here. When you have wellness programs, that sounds good. Right? And now I give you what the wellness programs was. One person was was given a wellness program, meaning a gym membership because they said, you need to lose weight. You have too many days off due to your weight.
One person was struggling with mental health, was giving a wellness program with a with a psychologist and said, well, you can go to this wellness program and then you feel mentally better so you can work longer hours. These are not wellness programs. It's a massive embarrassment to do anything even near to that. When you do something such as bring your dog to work days, it's nice, but it's nothing else than that. Also, please check if someone has allergies in the office because then you can't do it at all. When you have free company wear, which is nice marketing, when it's high quality, people might even wear it outside usual office hours. However, it's also free advertising for you.
So it's nice and people have that. One of my friends is a manager at Sony. And for example, when we have pre drinks, for example, before we go out at his house, and I see that all the ice cubes are shaped in the Xbox different sides, that's a nice touch. And immediately, there's an advertising moment for Sony, but Sony takes care of them so well that everything else matches this whole culture. So when you say, hey. Here are free t shirts, and here's a free backpack, and it's all very cheap, and you do not take care of anything else, it is not gonna work on itself. When you, for example, say, hey.
We do team building, and we do education, and we do development programs. I mean, by the way, we pay for it, so you do it during the weekend. Then the books are merely balanced. You didn't actually invest into people. You basically say, we do not really care about team building. We do not really care about you getting educated. So we give it to you because you forced us to do that, but do it during the weekend and then show up back in the office and please work.
Of course, team building and education are part of working hours. There's no question about that. I'm an employer by myself, and I I strongly stand by that statement. When you do lunch and learn, by the way, which means nothing else that you do education for business during your lunch break, it is not a lunch break anymore. It means you took away the break. In certain countries, quite a number of them, you are in violation of working laws, so be aware of that. And many people are frustrated because when they want to have a lunch break, they want to have, as the name says, a break.
Who could have thought? When you have an on-site gym but people get shame when they use it with terms such as or phrases like, we still have we we sort of work on the table. Do you think it's actually good that you lift weights now? Maybe you lift a bit more from your desk compared to the weights in the gym. Then you didn't win anything again. When you, for example, have mental health support, but then you add the phrase, hey. Yeah. We help you with mental health, but, you know, you can't take any kind of therapy hours before 6PM because, you know, you need to come to work.
Then you don't really support anything. You basically just tell someone, there's health insurance in our country and good luck from here. My worst case, what I found this year, is when a logistics company put in the job ad, what we offer for our drivers, and we're talking about truck drivers here. You probably heard that there's a massive shortage of truck drivers. And they said our benefits for our truck drivers is clean toilets. Clean toilets for our drivers. I know that there are many dirty toilets around, but that's that doesn't make clean toilets a benefit.
It can be expected. I mean, what do you wanna do when you say clean toilets are a benefit? What's next? Human rights, but only when you try hard enough? So be sure that you offer real benefits. And this was just a short list of pseudo benefits. Before we get to the real benefits and the categories you should look at, we have to look at what actually is the evidence we have here.
And the evidence because often people say, oh, I don't see that this pays off. They're all after they're only after the money. Anyone's just after the money, nothing else, so I don't do benefits because it doesn't pay off. It's as painful as it gets. And when someone tells me, oh, do you actually have a proof that this works? Yes. I do. Yes. I do.
And we go through the proof right now. The evidence to that. When it comes to autonomy and you work on your own, there's self determination theory by Deccy and Ryan nineteen nineteen eighty five. When it comes to remote work, there's Gajendra and Harris in 02/2007. Adding to that, professor Cheadle Neely in the year 02/2010 wrote an amazing book by the May remote revolution that there is strong scientific evidence for these kind of benefits. When but when it's all about leaving and where you can work and also well-being, what you spend on your employees, there's the there's the con conservation of resource theory by Hopfaux nineteen eighty nine, strengthened again by Glassdoor twenty twenty. According to the Glassdoor study, 41% less voluntary turnover when you offer benefits.
Gallup added on top of it in 02/2017, '20 '1 percent more profits in companies that offer benefits compared to companies that do not. When it comes to personal development, you have the so called job characteristics model by Heckman and Altman nineteen seventy six. Again, strengthened by LinkedIn Learning 2022 where people said in a survey, 94% prefer to work for an employer that actually offers proper development. We had on top of that the SHRM, the strategic human resources management, 92% more innovation, 58% more future proof, 52% more productivity when you offer benefits. And when you still think this is not enough for you, and I couldn't even think of anyone still saying no now, we can still add, for example, for well-being, the job demands resource model by Dema Rutti in 02/2001. That study was published. The Harvard Business Review in 02/2010 also examined that for every dollar you spend, you spend $3.27 regarding health care and $2.73 for absenteeism.
That means you have a return anywhere in between 250 to 300 something percent. That is convincing enough, I think. If you add on top of that Crackle Water Denev in 02/2019 found happier employees also have more drive. Companies with happier employees and benefits have 21% more stock return. So when you want to talk about stock exchange prices, you have to offer benefits as well. Regarding recruiting, when people now say, do you really think it pays off in recruiting? The signaling theory from Spencer nineteen seventy three.
The signals you send out there communicate your company values. And I know it's harder to go through get through the noise out there, which means you have to invest even more in your values, your recruiting, your benefits, your benefits, your benefits, everything you offer out there. On top of that, the PwC future of recruiting survey found out 70% of everyone applying anywhere consider benefits as one of the decisive factors to decide in in favor or against an organization. When we look into the s m the SHRM study in 2023, '60 percent say benefits are a major reason to decide in favor or against an organization. When you simply say, you do not take benefits into account, you do not do benefits, you think it doesn't work, then you are a manager or an executive that is unfit for purpose, unfit for work, unfit for whatever you think you do in your organization. You deliberately harm your organization. Please stop doing so.
The scientific evidence is as unambiguous as it gets. So be sure that you stick to that principle. When we now talk about real benefits, we need to be aware of the fact that the focus needs to be in certain areas. One area is time, saving time. One area is health care, health. Another one is how to work autonomously, how to have independence as a person working. Then another one is future, and then the fifth one is real value add.
Real value add, for example, when you say, you offer free TFL tickets, real value add because you save something. When you offer free water, no real value because pay me properly and I can afford water by myself. So let's go go through a whole list. Of course, you need to have fair pay, look into your industry, and please pay people accordingly. Have regular raises either connected to inflation. Please don't go by the system. Anyone has to back for a salary raise one by one.
Because what happens then is people talk amongst each other. They will get very angry finding out the differences, and then you have a massive nightmare in your organization. Be sure that you have some system for raises in place. Also offer bonuses, for example, profit sharing, do something for pension funds. You can also offer stock options for equity. And, of course, when you have something such an emergency fund in case of need to help your employees or you have zero loan programs, probably not for another iPhone or something, but if something happens as an emergency, you can help your employees. They will be very happy about that.
So this is just all about pay here. When it comes to time, look into flexible hours. Look into paid time off. By the way, in many countries, when you now listen from Europe, you probably think paid time off is a lawyer. Well, in many countries, it is not. So pay time off should go without saying. People are way better as workers and people are way more productive when they also have time off without worrying about finances.
Think of sabbaticals. When people have mental health days, these need to happen with no questions asked. You can't sit there and say, you have mental health day. Why? Why again?
What's going on there? Then you don't have mental health days. You offer them or you don't, but mental health day means no questions asked. And also think of and I know I'm now touching something which might make the whole room explode. Think about less days per week. I'm not gonna force you anywhere, but when you say we offer a five day working week or even more, congratulations, you are on the mass market. You're competing with absolutely anyone.
When you only say we offer four point five days or four days and by the way and or even less. When you say four let let's just say four day working week. You offer four day working week with the same pay. However, that also, of course, includes achieving the same goals. And here's a political dimension of this. If anyone tells me we want to have four day working week, sell same pay, but less productivity, you would drive many economies out of the competitive range, especially when you have high costs for production. So be aware that less working days still mean same day, so you have to be more productive in one way or the other.
In addition to that, think of offering hybrid work, sometimes working in the office, sometimes working from home. Think of remote work, working from home constantly, so saving on the travel, the time, and the cost connected with it, and also all the costs that you have with buying food externally. Think about work from anywhere, that people can work from anywhere. Very important here. Also think of when people go somewhere that they have an obligation as well. You cannot go to your little villa somewhere in Fuerteventura and then say, oh, sorry. My Internet here is really bad, so I can't connect and I can't actually take part in the meetings. No. There are obligations on both sides of the game.
But work from anywhere is a tremendously great idea and also what you, of course, need to have some consultancy before that. Because when you stay somewhere longer than ninety days, social security and everything kicks in. So be sure that you need to check with regulation before so you do not have a problem that suddenly someone says, oh, you work here, so you have to pay into our social system. Think about having home office budgets so that people can actually work from home, that people, when they work from home, get a certain amount of money either for equipment, either as a loan or as a gift. So you can pre preferably as a gift, of course, in the in this case. And also offer right to disconnect policies, including no meeting days. Right to disconnect means when work is over, work is over.
No WhatsApp, no call, no nothing, and no meeting day simply means people can actually work constantly and actually focus on what they want to get done. Many companies now pick up especially with a no meeting day. It's not easy to implement, but it is possible because my company has it in place as well. In addition to that, especially in the English speaking world, think about what you can offer with health care, either private health care or in The US any kind of health care, free free or subsidized therapy. What about when people become parents? In Europe, we have something which is called parent times. People have paid time off when when they are parents.
So think about that because when you I don't even have children, but even I know that your life, I think, significantly changes on any level as soon as you have children. But, of course, people will get back to work when you don't pay them, and probably their thoughts are anywhere but not with work. So they would produce lots of errors which you have to pay for. So be aware that parent time also is a massive distinction compared to other vendors on the market. Think about that you might offer help for their children when it comes to education, for example. Is there anything that that you can offer which is health health related for certain certain specific aspects of life? So if and by the way, there are benefits now, which I saw at the expo, focusing on very niche target groups from knee injuries to people who had football or soccer injuries to just to just to bridge the American and European gap here.
Any kind of injuries, menopause, fertility, family planning benefits from companies for their employees, any kind of, breast cancer screening and and any kind of bowel cancer screening, any kind of back pain which many people have, or simply private access to doctors when you need it. That is, of course, not not always cheap, but it's really appreciated by people because they know how hard it might be. We, of course, now can discuss, is it a good idea that health care becomes an employee benefit? In The US, it is like that for decades now. In Europe, it's not, but it's shifting in the way that it becomes more or less at least a benefit where people have massively better access to health care.
Is that good? Not really. However, is it developing in that way? It does. Be aware that you need to take a careful step where you send the science here, your political science as well. And in addition to that, you can offer all of that not only for human beings, but also for people's pets. And I really because I I don't have pets thought, is that really a benefit when someone pays for my dog insurance and my dog surgery?
And then someone told me what the cost for these surgeries. And I nearly fell off my chair. So, yes, when people have pets paying for their insurance, etcetera, etcetera, that of course also is a massively nice benefit. When it comes to personal development, you need to think about how to develop your people. If you do not want to do that because you just want to keep them on the level they are and don't invest in them, they will go somewhere else. They, of course, need training, coaching, seminars, mentoring, career path, any kind of education for themselves or for their family, for their children. All of that, of course, is relying on you having a great culture, and that means you do not only have excellent leadership by professionally trained and coached leaders.
In addition to that, of course, you have to guarantee psychological safety and DEI, diversity, equity, and inclusion before someone now starts to scream woke because these people are now around ever since Donald Trump took over the office. Be aware that diversity when someone at the at the expo told me, oh, this is only about gays and lesbian and trans people, isn't it? No. It's not. When you go over a certain age, do you want to be discriminated against? No. Well, that is diversity.
When you fall over at home, you suddenly have back pain and someone says, I'm not sure if you can work in the office here anymore. Do you want to be discriminated against because of your health? No. That's diversity. If you, for example, have a certain accent because you come from a certain region, if you even if you are native born in the country where you work, do you wanna be discriminated by your accent? No. That is diversity.
Diversity affects absolutely anyone except the birthright privileged group in the country. So be aware that DEI is crucial for absolutely anyone. These are the benefits of the categories which I mentioned now, which do not even include anything you can give from coupons to gifting people, giving people money to giving them any kind of bonuses. Anything you can give to people comes on top of that. So when now someone sits there and say, hey. We work in a really difficult market, and there's lots of production work in factories and not very pleasant. I don't think this whole benefits thing is for us.
Something of what I just named for you will be for you, and pick carefully. Because when you say there is no offer, people will go to any other employer that offers something compared to you offering nothing, not even talking about the catastrophe that will happen to you on Glassdoor or similar platforms. Wrapping all this up together, when we now put everything together, benefits motivate. Benefits make you a better employer. Benefits are something that is not nice to have, but in today's challenge and fight for the best talent and best workforce, it's not a nice to have. It is a must have. So you better go for it right now, and I wish you all the best doing so.
And when you now say, that was bit of a bit bit bit of a complicated thing. I think I need to talk with you.
Feel free to do so. When you now need something very specific, whether it's a training, a seminar, speaking, coaching, feel free to contact me there as well. But if you really just like to have a chat, feel free to drop me an email, nb@nb-networks.com. Feel free to write me an email, and then we just take it from there. I will put the email address in the show notes of this podcast, including my LinkedIn. Feel free to connect with me on there. For the Germans, you can also connect me on Xyng as well.
I'll also put my website down there, nb-networks.biz. And that, oh, by the way, on the website, you'll also find the transcript of this podcast. So I'm looking forward to seeing you there as well. The second aspect I always recommend is when we have live sessions. You can join us there at no charge when you go to expert.nb-networks.com. I also put that link in the show notes of this podcast. When you sign up there, you just need to put your email as in there.
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The last aspect and the third one here is the most important one that I always mention. Apply, apply, apply what you heard in this podcast because only when you apply what you heard, you will see the positive aspect that you probably want to see happening in your organization. Because if you do not want to see it, otherwise, you wouldn't sit here listening to me for more than twenty minutes, actually. So I'm looking forward to you implementing all of this. Feel free to contact me. If you need any kind of help, contact me anytime. I'm answering any message within twenty four hours or less, so I'm looking forward to hearing from you.
And at the end of at the end of this podcast, there's only one thing left for me to say. Thank you very much for your time.