7 Worst Employee Benefits

August 3, 2022
7 Worst Employee Benefits

We know what employees want, generally, when it comes to benefits. Better health insurance coverage, generous paid time off and vacation days, retirement benefits, and professional development opportunities all rank highly regarding job satisfaction and retention. But what benefits do employees hate? The fact is, some benefits contribute to a healthy company culture and employee work-life balance. And then some benefits are really half-baked perks. Here are some of the least effective benefits and perks on the market today.

What are the 7 worst employee benefits and perks?

1. Entertainment perks

The results are in: ping-pong tables, pool tables, and other entertainment offerings in the workplace are meaningless window-dressing items, not effective benefits.

As an alternative, consider managing a flexible work program, so employees can have fun on their own time.

While having games in the office appears, at first glance, to promote a fun and creative company culture, nobody wants to spend more time in the office. As an alternative, consider managing a flexible work program, so employees can have fun on their own time.

2. Snack bars

In the beginning, full and healthy snack bars were introduced to support employee satisfaction and health initiatives in the workplace. These money leaks are not only unpopular or irrelevant, but they can even tempt employees to eat more — thus potentially gaining weight. In fact, according to a study from the Journal of the Academy of Nutrition and Dietetics, 1 in 4 American workers average nearly 1,300 calories a week from workplace food, most of which is high in fat and sodium. While employers' intentions are good, workers would probably prefer more money in their retirement benefits or health insurance package than all-you-can-eat salads and yogurt.

3. Pooled sick days

Leave sharing, often referred to as pooling PTO, is the practice of employees accruing paid time off, including sick and vacation days, that can be used to benefit another employee. For example, if Susan has 3 extra vacation days, she can lend 3 of those days to Bill, who needs extra days to recover from surgery. This practice generally lowers employee morale, and tends to reflect badly on the company.

4. Animal-friendly workplaces

While many love pets, an employee bringing their dog to work might become a bigger issue than you think. Frequent breaks due to animal misbehavior can disrupt more than the owner, but you are also putting employees with serious allergies at risk. In fact, 43% of workers in the UK found this to be the least interesting benefit. Before implementing a perk like "bring your pet to work," it's best to know whether or not the majority of your team or office can handle an animal in the workplace.

5. Gym memberships

Like the snack bar scenario, gym memberships, whether through discounts, a partnership with a local gym, or reimbursements, aren't as popular as someone might think. For one thing, many employees may prefer to work out at home, especially after the pandemic. But in addition to this, employees may prefer gyms of their choosing or simply don't want to work out — at least not regularly. While it may be a "nice to have," gym memberships are hardly an effective retention strategy.

6. Too many social events

The occasional Christmas party or birthday cake is welcome, but too many after-work social activities, ice-breakers, and other team-building exercises can lead to fatigue and annoyance. While there are strategic ways to use social interaction to improve collaboration and employee communication, making this a central part of your benefits strategy might have the inverse effect. To workaround going overboard with team-building activities, figure out how your employees gauge their interest and communicate in high-performing situations. Try to emulate low-time-cost activities that foster engaging behavior.

7. Employee-paid benefits

Finally, there are some benefits — such as life insurance or retirement plans — that can push the cost of the program to the employee. When an employee does the math and realizes they are paying 100% for a benefit, especially a benefit they don't need, you can expect their trust in the organization to falter. The point of employee benefits is to provide a worker with additional compensation and highlight their value.

Most controversial employee benefit: unlimited PTO

One employee benefit that confuses employees and HR professionals is unlimited PTO days. On the surface, the policy appears to be a godsend for both parties:

  • HR and employers can reduce administrative time since all paid time off days are grouped together.
  • Employees can take "as many days as they want" — usually 30-60 days — far more than the average policy.

However, this program requires significant effort to be effective. According to 1 report, almost 30% of employees with unlimited PTO benefits work while taking their vacation days. Furthermore, a worker with unlimited vacation time will likely take 2 fewer days than those with regular policies. This HR Mythbusters report found that while the average worker takes 15 days of vacation time, employees with unlimited PTO take only 13 days. Without companies enforcing paid leave and ensuring employees that it's OK if they take a break, work and leisure time are likely to merge, leaving employees more burned out than before. Unlimited vacation time also leaves termination payouts uncertain for employees, who might expect to be reimbursed for unused time off. This doesn't mean that unlimited PTO is a complete failure, only that the program needs to be more rigid if it's going to work.

Best practices for developing your benefits package

The right combination of benefits and perks can boost employee productivity and retain top talent. But creating that unique set of benefits is less about following large companies and more about your specific industry, budget, and competitors. To get started building a meaningful benefits plan, follow these best practices:

Ensure benefits are relevant

You don’t want to offer tuition assistance as a key benefit when most of your employees are over 40 or have high salaries in the industry. Instead, additional health benefits, more PTO days, or high-quality retirement funds could be more beneficial.

Ask your employees what they want

The best way to figure out a strong package? Your employees will tell you. Use employee engagement surveys and feedback surveys, as well as benefits usage data, to figure out what employees would appreciate.

Foster a healthy company culture

If you have amazing benefits, but workers don’t feel safe or motivated at your company, there might be a deeper issue beneath the surface. A toxic workplace will drive turnover, no matter how great your benefits package is.

Tell your employees about their benefits

According to 1 report, 23% of Millennials and 36% of other employees don’t have a clear picture of their benefits packages or how to use them. Ensuring that employees are clear about their benefits should be a priority and can be addressed during onboarding, after performance reviews, or at annual staff meetings. You can also keep benefits information in an online portal or the employee handbook.

Benchmark your benefits and offer benefits workers love

On the plus side, there are several highly-desired benefits when drafting your employee retention strategy. And benefits do matter. According to a Glassdoor report, 60% of employees consider benefits and perks when choosing a job offer, and 80% would prefer better benefits over a pay raise. Of course, the number 1 benefit continued to be health insurance, with 88% of employees wanting better health, dental, and vision coverage. But what's considered good coverage? Well, that all depends on your business size and industry. Check out our 2021 Benefits Benchmark Report for the in-depth analysis of the best medical and health insurance packages for small and mid-sized businesses.

This communication is for informational purposes only; it is not legal, tax or accounting advice; and is not an offer to sell, buy or procure insurance.

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