Benefit and remuneration packages are changing fast

Pressing staff recruitment and retention issues are forcing companies to reconsider reward packages and supports

In May the jobs site Indeed became the latest large employer to beef up its family-friendly benefits for employees. The company describes the package as a “family forming” initiative: it provides fertility and pregnancy support as well as assistance with surrogacy, adoption and parenthood.

Indeed’s initiative is very much part of a new trend in employee care which is moving away from traditional perks, such as free food and gym memberships, towards initiatives focused on wellbeing and work-life balance. This change in emphasis is also leading to a reworking of employee leave policies to offer options such as unlimited paid time off, enhanced holiday allowances and more paid time-off days.

Working from home has meant that subsidised canteens and even company cars no longer have the same currency and have been overtaken by benefits that better reflect people’s post-pandemic needs.

Topping the list are flexible working arrangements and mental health/digital fitness subscriptions, while improvements to child and elder care policies and access to better health and dental cover have all become more relevant. On top of this companies are expanding their broader employee assistance programmes, adding extras such as financial health checks while some have extended their counselling services to include the children of employees who need help adjusting to life after lockdown.

Another initiative aimed at keeping staff happy, especially if they are now working more in the office than at home, is allowing them to work remotely for the summer months while children are on school holidays. Some companies are also allowing overseas staff to work from their native countries for blocks of time at a go. The four-day week has also moved up the agenda, with a number of Irish companies currently participating in a six-month international pilot being run by the 4 Day Week global campaign.

Also changing is the one-size-fits-all approach to rewards, with companies now offering suites of benefits that employees can pick and choose from based on individual need. To help pay for this organisations are repurposing budgets traditionally allocated to cover subsidised food, sport and leisure fees or travel when people were office-based.

The Indeed package is at the leading edge of this new wave as it elevates benefits for employees trying to start a family to a new level, with reimbursement for fertility-related expenses including egg and sperm freezing. Also part of the package is a breast milk delivery services for business travel that provides refrigerated or frozen overnight shipping of milk back home at no cost.

Driving these initiatives, apart from an interest in employee welfare, are pressing staff-retention issues. Recent research conducted by Indeed found that 40 per cent of women have considered quitting their job in the last year, citing burn out and the pressures of family life as the main reason, while 22 per cent said it had simply become too difficult to balance work and home-life responsibilities.

On the salary side of rewards packages, labour shortages and the rising cost of living are driving wages up, with the Irish salary guide from professional services recruiter Morgan McKinley predicting a 5-10 per cent rise in general remuneration rates this year. However, in sectors where labour is particularly tight, such as construction, technology, data, and engineering, the rise could be as high as 20 per cent.

And the labour market doesn’t look like settling down any time soon as 82 per cent of Irish professionals say they are considering a job move in the next six to 12 months.

Two other interesting nuggets to come out of the Morgan McKinley report are that the average salary in Ireland currently stands at €44,183 and that people don’t like being left dangling when job-searching. Almost 50 per cent of professionals have declined a job offer because the hiring process went on too long.

“Salaries are being pushed upwards for sure, along with pressure to offer sign-on bonuses to get offers over the line,” says Éimhín O’Driscoll, managing partner of Fastnet Executive Search, which is heavily focused on the thriving life sciences sector. “The challenge for the hiring company is that they are very conscious of equity within their existing team and the reality is that if they are going to attract in new talent, that equity is going to be challenged.

“We have some companies that just can’t offer more based on internal equity and candidates are declining the roles. We have other companies that are pushing the boat out to attract talent and that can have an impact internally within the team from an equity perspective. Sign-on bonuses are typically what companies are using to try to bridge this gap.

“Another trend we are seeing is that candidates are very reluctant to commit to a five-day on-site role. While I believe that people are often driven by factors outside of remuneration when it comes to employment, in reality in today’s market very few job-seekers will take any kind of a hit on their overall package,” O’Driscoll adds.

“We are also finding that candidates are being counter-offered when they go to hand in their notice, and this practice has increased significantly in 2022. So if you have a candidate who was making a fairly lateral move from a compensation perspective it is very difficult for them to turn down an attractive counter-offer, leading to a lot of frustration all round.”