Boosting Benefits in an Employees’ Market
Peace Coffee, a certified B corporation, focuses on nurturing its employee culture. Among its benefits are supports for fitness and biking. Here, employees celebrate at the company’s 25th anniversary party. Photo courtesy of Peace Coffee

Boosting Benefits in an Employees’ Market

From mental health support to unlimited days off, benefits packages are being tailored to meet the demands of people's new work lives.

Employees took a hard look at their work lives during the pandemic, and many of them concluded they want to change their profession, their employer, or their daily existence of when and where they do work.

In seeking a clearer sense of purpose in their lives, many had to acknowledge that their work-life balance was out of whack. They recognized they needed more support and flexibility to be good employees and good family members.

As companies contemplate the workforce shortage and newly empowered employees, businesses are taking a fresh look at their employee benefits. To retain workers and attract new ones, some businesses are demonstrating they’ve heard the call of employees. They’re introducing new benefits and enhancing existing ones, such as promoting employee well-being, flexible work policies, and increased paid time off.

In the Twin Cities, corporations including Target and 3M are offering new or better benefits for education assistance, mental health support, flexible work arrangements, and parental leave. Smaller companies, including Pivot Strategies, Field Nation, and Gravie, promise employees unlimited paid time off. And Peace Coffee, a certified B corporation, keeps benefits aligned with its biking and fitness culture by providing indoor bicycle parking, an on-site tool shop for bike maintenance, and discounts on parts and cycling gear.

Changing benefits 

The days of benefits packages consisting of nothing more than medical insurance and a 401(k) plan appear to be gone in most workplaces. Several corporate leaders have adjusted benefits to align organizational values with employees’ most pressing needs.

Tim Allen, CEO of Care.com, a platform for finding and managing family care, wrote an article this year for Harvard Business Review about the changing nature of employee benefits. He explained: “The pandemic laid bare the fact that we have a broken care infrastructure, support for mental health is insufficient, and many of us are entangled in demanding and inflexible workplace cultures that create burnout.” 

Allen cited his company’s survey of 500 human resource leaders and C-suite decision-makers. “Almost all (98 percent) of the leaders we surveyed plan to newly offer or expand at least one employee benefit, prioritizing the ones workers deem most essential, like child and senior care benefits, flexibility around when and where work gets done, and expanded mental health support,” he said. “Organizations are responding. They’ve recognized that employee benefits can be life-changing for their workforce.”

Waging a war for talent

In the Twin Cities, benefit offerings are beginning to reflect unprecedented societal transformation. “The type and scope of components in packages certainly have moved and shifted in the wake of the pandemic,” says Jim Kwapick, Twin Cities district director for global staffing firm Robert Half International. “It’s accelerated what employers are doing at a pace that’s greater than anything that’s happened in the prior 10 years. The world of work has changed so fundamentally, and as the war for talent becomes more pitched and acute, benefits will reflect that.”

Kwapick notes that an industry rule of thumb is that benefits usually account for 20 to 35 percent of an employee’s total compensation. The Twin Cities, he says, is probably at the top of that range. “It’s historically been a market with progressive companies known for placing a high value on employees. There are many local employers who are open and sensitive to doing things that are more employee focused.” 

3M has developed a benefits philosophy for its 90,000 employees that focuses on attracting the right people, supporting them with the right benefits, and keeping a sharp eye on how those benefits stack up with competitors’ packages. “We strive to offer attractive and relevant benefit programs that will help bring people to work at 3M and encourage them to stay once they get here,” says Deidre Rehfeld, vice president of global benefits and HR vendor strategy. “We ensure employees and the important people in their lives have a variety of supports to maintain their health, resiliency, and overall well-being in ways that are meaningful to them and their unique needs, and we also prepare employees to meet their retirement goals through resources and educational programs, including an on-site financial educator.”

Rehfeld points out that once 3M decides which benefits to offer, it monitors and measures to make sure everything is on track. “We work with quality vendors while actively managing benefit costs for our company, our plans, and our people. And we ensure that we’re meeting and exceeding administration goals. Finally, we monitor the market to identify trends, utilizing external benchmarking and research, partnering with trusted benefits partners who put people first.”

At Peace Coffee, a Minneapolis-based company with 50 employees, benefits are strongly linked to its culture. “Our goal is to provide supportive benefits so that our employees feel that in addition to compensation, they have the support they need and know they’re employed by someone who cares for them,” says CEO Lee Wallace. “It’s the right thing to do.”

The pandemic has required a few flexes. “So much of our culture has been focused on getting together in person and celebrating company and personal milestones, so we’ve had to transition,” she says. For their annual year-end party in 2020, for example, the company provided employees with a take-home dinner from Brasa Premium Rotisserie to share with their families, along with a Patagonia branded jacket. The evening concluded with a virtual trivia night gathering. 

Benefits that matter 

Most companies offer a basic benefits package, but some are getting creative with new offerings. Here’s a roundup of some innovative benefits provided in the Twin Cities:

Paid time off: The offering of unlimited paid time off has been on the upswing, especially in the tech sector. Other companies offer a weekly allotment of “protected time,” which allows employees to block their calendars for activities that promote creative thought and well-being. That might be a trip to the gym, a walk around the lakes, or time to read that latest business title. At Peace Coffee, employees get eight paid hours annually to volunteer within the community, and many other companies offer paid time off for volunteering.

Flexibility: In August, 3M introduced Work Your Way, which Rehfeld describes as “a new approach that prioritizes flexibility in a new way and supports working differently.” The new model allows employees to tell their supervisors if they want to work remotely or have a hybrid schedule, then create a personalized plan. In addition, the company introduced what Rehfeld called “mindful pandemic leave policies” that give employees more flexibility to take care of their personal health and their loved ones.

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Mental health: Many companies are expanding their mental health support. During the pandemic, Target introduced free access to online resources and apps that support mental, emotional, and physical health, a benefit that’s now available to all U.S. employees. The company also has the long-standing Team Member Life Resources program, which offers a limited number of free in-person or virtual counseling sessions.

3M also added virtual appointments with mental health support professionals. Later this year, it’s launching a new digital mental health platform that offers virtual support for depression, substance use disorders, post-traumatic stress disorder, and bipolar disorder. 

Family care: Target offers free backup child care through Bright Horizons. At 3M, Rehfeld says, “We’re particularly proud of our U.S. parental leave program, which allows employees up to six months of leave for caring and bonding, and which is available to either parent.”

Education: While tuition reimbursement has been a part of many traditional benefit packages, Target made a splash in August with the announcement of a debt-free education assistance program that requires no out-of-pocket costs. The goal, says a Target spokesperson, is to eliminate college student debt and promote equitable access to education. “After one week, nearly 10,000 team members had already signed up to get more information about the program,” the spokesperson says. 

Salary vs. benefits

In an employment market where job candidates are definitely in the driver’s seat, their first consideration still is compensation, say industry experts. “Salary has always been No. 1 with job seekers, and it probably still is,” Kwapick says.

Laura King, marketing practice lead at executive search firm SkyWater Search Partners, agrees. “Usually the offer amount and who you’ll be working with is what matters,” King says. 

“I think employees are more focused on compensation right now,” Wallace says. “Around July of this year, most businesses started realizing that employees were in demand, and no business was immune. In our case, we usually give a cost-of-living adjustment raise at the start of the year, and we moved that up to September. We also analyzed every job to make sure we were competitive, so some employees got a percentage increase, and a number of them are now in reclassified roles.” 

What advice would Rehfeld give to another company thinking about revising its benefits package? She says: “It’s critical to understand both the needs and goals of your employees, and it’s also so important to understand the external environment. At 3M, we have nine employee resource networks, and our benefits team stays closely connected to several of these groups to hear firsthand from networks like the parents and LGBTQIA+ communities. To avoid being too insular, you also need to research market trends.”

“Companies need to think about what’s important to people today,” Kwapick says. “HR and benefits are important. After all, you’re only as good as your people, and companies that understand that generally prevail.” King says the companies “that are winning are those that are listening to their employees.”  

For Wallace, shifting workplace expectations have meant opening up to increased outreach that lets employees know that support and flexibility are woven into the fabric of their corporate culture. “We can’t just assume employees will come to us if they need more flexibility,” she says.

“We need to be the ones to initiate those conversations and to spell out why you should stay home when you’re sick, or what to do if you’re just having a bad day. We want them to feel supported, especially with mental health, and we’re aiming to be role models for checking in and caring for each other. The pandemic has pushed us to make sure that compassion is a clearly stated company priority.”

Julie Kendrick is a Minneapolis-based freelance writer.