With the U.S. unemployment rate at a historic low, domestic workers should be experiencing wage growth that is commensurate with a tightening labor market. However, this is not the case, as there seems to be another form of compensation in favor. Companies have been investing more in providing benefits for employees and less in increasing wages.
As of the second quarter of 2018, according to the Bureau of Labor Statistics, employees received 32% of the total compensation in the form of monetary benefits, such as bonuses, paid leave, and employer contribution to insurance and retirement. This is an increase from 27% in 2000. It is important to note that this statistic does not account for the growing availability of non-monetary benefits, such as flexible work hours, casual attire, gyms reimbursements, and more, which also serve as means of compensation for employees.
A major aspect of the shift towards non-monetary compensation is due to the increasing prevalence of employee well-being as a priority. Employers are increasingly recognizing the value in demonstrating appreciation for employees, which is best relayed through benefits that allow these individuals to take optimal care of themselves and loved ones. There are many benefits pertaining to employee well-being that have shown significant growth within the past few years.
Health Savings Accounts (HSAs) have added a new dimension to traditional workplace healthcare benefits, as they have increased in popularity by 11% in the last five years. HSAs provide employees with a high-deductible health plan a triple tax benefit, essentially lowering their taxable income while providing tax-free investment growth for funds in the account. Moreover, HSAs allow employees to make withdrawals for medical expenses without the burden of paying tax.
Relieving employees who are new parents is a growing objective amongst companies as well. In the past two years, the availability ofpaid parental leave has increased significantly, growing from 26% to 35% for maternity leave and from 21% to 29% for paternity leave. In addition, more and more companies are offering new mothers with lactation rooms.
Company-organized fitness challenges and competitions are two more wellness-centric perks offered by employers that have seen substantial growth. Specifically, the percentage of organizations offering these benefits increased from 28% to 38% in the span of a single year.
As employee stress becomes a greater concern and detriment to the workplace, many employers are adopting onsite stress management programs. The presence of this type of wellness offering has increased from a mere 3% in 2014 to a notable 12% in 2018.
The move towards non-wage compensation will help satisfy and better the lives of employees while simultaneously increasing the success of the organization. Countless evidence has depicted that employee wellness, when treated as a priority, increases overall productivity. It makes sense as employees that perceive their employers as helping them live healthier and happier lives are more likely to succeed in the workplace.