Why the most innovative employers are rethinking total compensation

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In today’s war for talent, the number on the paycheck is just one of many aspects prospective employees consider when deciding where to work. Millennials are largely driving this shift, as they look for work/life balance and a socially conscious corporate culture.

Leading innovators, including Akamai, Rackspace, Southwest Airlines and Vivint, are focusing on “quality of life” perks and other benefits that our grandfathers wouldn’t have dreamed of — or thought possible. They include daycare assistance, adoption and fertility funding, onsite medical scans, ID-theft services and enhanced options for working remotely.

“Benefits, or what we refer to as WorkPerks at Southwest, are a big driver when it comes to attracting, retaining and engaging [employees],” says Julie Weber, VP of people at Southwest Airlines. She adds that the company “doesn’t just focus on traditional benefits like wellness, healthcare and retirement.” For the airline, that means a positive work culture, career development and generous travel privileges.

Sarah Sardella, senior director of global benefits for Akamai Technologies, a digital content delivery company based in Cambridge, Mass., has come to the same conclusion. She says many companies focus on health insurance, which is important, but it doesn’t have to be in the gold-plated category to attract talent.

“If we’re going to spend more money, I can take that and spend it on enhanced caregiver benefits,” Sardella says. “Those tend to be something employees respond to.”

Benefits aren’t make or break when it comes to hiring, but they are a key negotiating point, says Sharon Noneman, director of global benefits and wellness for Rackspace, a cloud services technology company in Windcrest, Texas. “They are the ancillary things that push them over the edge: massage on site, free onsite gym, paid family leave,” she explains.

The key is getting the offerings right. Increasingly, that means exceptionally strong family-oriented benefits. While baby boomers focused on good traditional benefits, millennials are more interested in quality of life.

“I do think we see more of a desire for flexibility,” Weber says.

American Express recently expanded its parental leave policy and now offers its U.S.-based full-time and part-time employees 20 weeks of paid time off. And it offers the same benefit to both men and women.

“We believe longer parental leave has a far-reaching positive impact on the mental and physical health of our employees and their families,” says David Kasiarz, senior vice president, global rewards and learning.

The chemical company BASF, based in Florham Park, N.J., has followed suit and grown its parental leave program to 16 weeks — and added five more days of medical leave. “We give people time to unplug and really be there with their families,” says Mollie O’Brien, the company’s director of total rewards.

The home technology company Vivint, based in Provo, Utah, supplies 12 weeks of paid maternity time and six weeks of paid time off for adoptions. “It gives people an opportunity to bond with their child and recover from having a baby or going through the hoops of adoption,” says Starr Fowler, senior vice president of HR. “They can come back and they don’t need to worry — we’re taking care of them.”

Akamai offers birth mothers paid leave for up to 18 weeks — eight weeks through the company’s short-term disability insurance and 10 weeks of paid family leave provided by Akamai. New fathers and adoptive and/or non-delivery parents receive 10 weeks of paid leave. The company also goes a step further and provides up to $5,000 to help with adoption expenses.

Fertility coverage is becoming more common as well. BASF offers up to $10,000 to cover IVF treatments. Akamai also provides infertility coverage in its health plans, as does American Express.

Destination employers also have begun to recognize the importance of supplying support for daycare and eldercare. Many employees live in the sandwich generation and are in need of both. American Express offers enhanced eldercare support that helps employees find the right situation for their loved ones.

“The program provides 24/7 access to confidential help, including assistance in finding long-term care solutions such as assisted living facilities and nursing homes,” Kasiarz says. The company has a deal with the provider Bright Horizons and gives its U.S. employees up to 20 days of subsidized care per year.

Rackspace and Akamai also offer supplemental eldercare as well as child daycare. The benefits are designed as a stop-gap when babysitting situations fall through. Akamai employees can get the help for just $6 an hour. BASF offers 80 hours a year of backup childcare and also provides nursing rooms on site.

Work/life balance

The pampered millennial is a cliché, but as always there’s some truth to the generalization. One issue smart companies are paying close attention to is work/life balance. Boomers were trained to show up, toil at their desk and stay, if required, until the job was done. Millennials see work as more fluid and not specifically tied to the workplace.

“Millennials say, ‘What’s the big deal? I have email on my phone,’” states Sardella, who was working at home and taking care of her child when interviewed by EBN. “We’re out of the recession and it’s starting to get harder to find good talent again. What do you want that work experience to look like?” Sardella says Akamai strives to offer benefits that complement work and family life so employees can “manage that blur between being at work and being at home.”

The company offers a liberal telework program called Akamai Anywhere that allows workers to apply to do their jobs entirely off-site. Sardella recently had a valued employee in tears in her office because of a pending move to upstate New York. The worker thought resigning her position was inevitable until Sardella solved the problem.

“She’s now working at her house in Syracuse,” Sardella explains. “It works fine, and she loves it. It’s part of who we are.”

American Express offers a Work Life Program to help employees manage the balancing act. “We not only want to help our employees and their families make their fulfilling experiences happen, but we want to give them back some time in their day,” Kasiarz says. That includes the improved parental leave policy, but also a new personal assistant service to help employees with a range of to-dos, like finding affordable pet or childcare, sourcing home repairs, planning a move and even party planning.

HR experts agree that millennials also want flexibility when it comes to time off. More organizations are moving way from the “Sir, may I” tradition of tightly controlled vacations and the associated stress and anxiety. Tech companies have clearly led the pack, but the trend toward open vacation policies is slowly gaining ground.

Vivint has done it for some time. “We’ve done away with tracking vacation and time off,” Fowler says. “We recognize not everyone manages to an annual calendar. We trust they’ll get the job done.” That leaves it up to workers and managers to negotiate the right balance.

Akamai hasn’t required a formal cap on vacation for a decade. While the policy sounds great on paper, Sardella concedes managing it is “really tricky in a lot of real, tactical ways.”

It requires managers to set measurable goals and objectives and stay on top of them, she says. “We ended up launching a training program where part of it dealt with how to use discretion, be consistent and be fair.”

The other challenge would seem less apparent: Without a traditional vacation policy with use-it-or-lose-it rules, some employees take less time off and are at risk for burnout.

“Some employees think it’s great, and others think it’s a ploy to not let them take as much time away from work,” Sardella says.

The policy clearly isn’t for every industry. BASF hews to traditional vacations, given the nature of its business, O’Brien says. “Half our population at BASF is in chemical plants. They are production workers that have very technical roles.” If John doesn’t show up for work, somebody on his team has to cover his shift.


As insurance premiums continue to rise, destination companies are pushing wellness as a key benefit to encourage employees to lead healthier lifestyles. Southwest offers its own internal rewards program that supplies up to $500 in cash for getting enough sleep and exercise. The company also provides biometric screenings (bloodwork, etc.) and even brings mammography trucks to the workplace.

American Express has gone wide and deep on wellness. “Our goal is to build a culture of health through our leadership, policies and work environment,” Kasiarz says. “Better health for our employees and their families is good for them and it’s good for us.” The company operates 22 Healthy Living Wellness Centers in its worksites across the world.

In 2013, American Express began targeting mental health. “We know that one in four people around the world will be affected by mental or neurological disorders at some point in their lives,” Kasiarz says. “We also know that the trajectory of mental illness is far better when addressed early on.” The company provides counseling 24/7 via telephone, and employees can also work with a mental health professional on site or near work. The service is free and confidential.

Vivint has an onsite health clinic that is also available to family members. It costs just $30 a visit.

The concept of wellness is now being applied to the financial health of employees. American Express offers an extensive package of services called Smart Savings that includes a personal finance coach. “We also offer various discounted insurance options so employees can protect what matters to them at a lower cost, and [it’s] hassle-free through automatic payroll deductions,” Kasiarz says.

Southwest also offers one-on-one financial counseling, as does Akamai.

Millennials like to have options, which is leading destination employers to offer more customization and personalization, says Bill Ziebell, CEO of Gallagher Benefit Services. Voluntary benefits are gaining popularity by giving employees access to discounted services from legal assistance to auto and home insurance, and from pet insurance to identity-theft protection. Many companies are also making available critical-injury insurance for younger employees confident in their physical invincibility.

“Millennials know they need insurance, but don’t want the expensive plan,” Ziebell says. “They would rather have more days off.”

BASF offers a full complement of voluntary benefits, as does Akamai, but Sardella warns that managing them isn’t as simple as just signing a deal with a third-party vendor. “You really have to hone the benefit if you’re going to get serious interest — it’s actually more complicated than it should be,” she says.

The average student debt in America currently stands at $30,100 per college graduate, according to the Institute for College Access and Success. More companies recognize the crushing burden and are offering tuition reimbursement to lure the best prospects. Last year, Southwest began providing $2,500 to undergrads and $5,000 for graduate and professional certification training. Akamai offers $7,500 per year, as does American Express.

Millennials don’t like feeling they’re just punching a time card at Acme Day Job. They want to work for companies that have a heart. “They seem to be more idealistic and socially conscious and more group oriented,” says Trevis Parson, chief actuary for health and benefits for Willis Towers Watson.

A culture of corporate volunteerism is central to destination employers. For every 40 hours of volunteer time put in by an employee, Southwest provides a round-trip ticket to the non-profit organization being helped. Through its Vivint Gives Back program, the company encourages workers to help build sensory rooms for autistic kids and schools in Peru and Mexico, among other projects. More than half of Vivint’s employees participate.

Rackspace offers each employee 24 hours of time off per year for volunteer work.

Blab about it

The best benefit plan in the world doesn’t mean much if workers are in the dark.

“In many companies, employees don’t know all the benefits they have,” says BASF’s O’Brien. “I don’t think people spend a lot of time thinking about it.” So her shop has built a brand around communicating its offerings called You At BASF.

Noneman at Rackspace is keenly aware that millennials are digital beings. She hired a company called Jellyvision to create interactive software to make onboarding easier. “We need to really leverage tech and think about how we’re communicating a variety of complicated benefit issues,” she says.

If in doubt about what worker perks might be best, ask the people who know: employees. American Express holds benefit focus groups and taps employee networks. As Kasiarz points out: “It’s because our employees are helping us to shape our benefits, and we’re continually involving them, that we don’t run into initiatives falling flat.”

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