According to the Society for Human Resource Management (SHRM), 35 percent of companies increased their spending on benefits this year. As wages have remained steady, companies are leaning on the benefits they provide employees to differentiate themselves and help in their efforts to recruit and retain top talent.
However, the theory of offering something other than a raise to attract and recruit top talent dates back to World War II. During the War, all able bodies were needed to serve, so there was an actual war for talent as companies couldn’t find people to work. The government banned companies from enticing people with higher wages, so they got creative and began to offer benefit packages instead.
While Netflix’s announcement of offering unlimited parental leave in the first year seems bold, shortly after, Microsoft followed suit and announced they would extend parental leave an additional eight weeks. Although this benefit works for Netflix, some companies can’t afford to offer the same for their staff.
As wages stay stagnant, business leaders should recognize that benefits will only become more important, from both a recruiting and retention standpoint. They will increasingly be weighed when candidates consider accepting an offer, or leaving their current employer. In fact, in another study conducted by SHRM, benefits were the third most important factor in determining job satisfaction and engagement.
It's too soon to tell, but yes, it should do what it's intended to. Attract people who want companies that care about their entire selves and well-being. People want to work hard for companies like that, and although it's offered, most people won't use it and few people will abuse it. If they do, that will help Netflix weed out who isn't right.
Also, Netflix is giving top talent what they want. It's a candidate driven market, and candidates will accept offers with companies who offer what they want. Flexible schedules, work-life integration, training, etc. If they did this for candidate attraction, it will work. But perhaps they also did it in response to listening to their employees. Did their staff say they wanted it? If so, it's going to work on a retention front, too.
Bottom line is this policy alone isn't enough to attract or retain people, but all of their policies, their culture manifesto, etc. makes them a great company to work for. If a company only offered this and did nothing else positive for their staff, they wouldn't be mentioned in the same breath with Netflix.
It’s hard to maintain this benefit in the bad times, so it will be interesting to see whether or not Netflix will be able to offer this for years to come, because the ramifications of offering a benefit and then having to take it away can do more damage than not offering the benefit to begin with.
Smaller companies who can’t afford to test this out have other options they can offer staff to stay competitive in the war for talent, such as:
PTO to Volunteer
Now, more than ever, people want to give back. Allowing staff at least two days a year to volunteer with their colleagues helps boost morale, builds camaraderie, and provides a sense of community involvement. Candidates and employees appreciate being able to contribute to the community they work in, and they will invest more into the company as a result.
Gym Reimbursement/Wellness Programs
Preventative diseases are on the rise and companies can help their employees stay healthy by offering gym discounts or wellness programs that promote well-being. Offering discounts on gym memberships, bringing in a yoga instructor to teach a class, or having fruit readily available, are all ways to promote healthy living and keep employees happy.
According to SHRM, the percentage of employees considering career advancement opportunities as very important to job satisfaction rose by 20 percent in 2015. Tuition reimbursement allows companies to highlight career advancement opportunities and keep employees engaged while strengthening their own talent pool.
Companies should not underestimate the importance of 401K contribution for employees. There is flexibility regarding the percentage of what employers match and when employees are eligible so each company can customize it based on what they can afford. Helping employees invest in their future is an attractive tool employers can use to engage and attract talent.