Are Extra Company Perks Disappearing?

During the pandemic, companies had to rethink worker benefits. The nature of work changed, the workplace changed, and the things that workers found valuable shifted. Nearly all (98%) of companies reported plans for at least one form of benefit expansion, according to a 2021 Care.com survey.

It’s been a time of intense competition for talent and one of the most stressful work environments many people have ever experienced. Employers started offering extras like company-wide mental health days, work-from-home stipends, and flexible hours to accommodate caregiving.

But with inflation at 9% in June and some big companies announcing layoffs, experts are watching to see whether employers keep their benefits extras.

“I think it depends on what type of company it is and what its goals are when it comes to human resources,” says Caitlyn Parish, CEO, and founder of retail company Cicinia. “If they value a happy, mentally healthy employee, I don’t think they’ll take away such perks.”

Here are some factors affecting these decisions:

Companies are desperate for workers

While the economy has made things tight in some sectors, employers still need people to do the work. “The clients that I manage are not scaling back their benefits to employees based on inflation,” says Heather Summers, senior manager of human resources at Flex HR. “In fact, they are making their benefits more attractive to fill their open positions.”

That sentiment is echoed by Matthew Burr, a human resources consultant in Elmira, N.Y.: “I think compensation is actually higher,” Burr says. “They’re still paying people more money because they’re trying to get people to come to work. Labor still has the upper hand.”

Even if a company’s bottom line is suffering, employers may choose to keep benefits and subtract from other expenses. “They may be cutting in other areas, but from my experience, they’re still desperate to get their pipelines filled from an employment perspective,” says Jenna Squires, president of World Payroll & HR. “They’re still dangling all the carrots.”

Employee retention is key

Employee benefits aren’t just about attracting great hires — they’re also about keeping the great talent you have. Sixty percent of workers said their companies’ retirement benefits were a big reason they stayed at that company, according to the 2022 Global Benefits Attitudes Survey by consultancy WTW. In a competitive landscape, shrinking benefits can lead workers to jump ship for companies offering better packages.

“We have concluded that pulling back such offers would diminish our bonds with our workforce, and ultimately reduce employee satisfaction rates,” says Lorie Carson, founder and marketing manager of search site Real People Finder.

Moreover, in some companies, benefits managers are still debating about how to boost perks to meet employee needs.

“A lot of my clients are still looking to add stuff,” says Jill Santopietro Panall, owner and chief consultant of 21Oak HR Consulting. “I’m frequently reaching out to them and hearing, ‘Can I have a corporate wellness person come in to talk about stress in the workplace?’ ‘How do I get an EAP?’”

The bottom line

Jobs growth was still strong in July, but the fact is, the future is uncertain. Higher prices will affect some businesses and require some pullback to stay afloat.

In the meantime, though, many companies are still talking a big benefits game. “I’ve seen an addition of a lot of mental health days or flex days off,” Squires says. “There’s still an uptick in trying to figure out those things for work-life balance. I definitely haven’t seen where those trends are stopping.”