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A recent study has revealed that employers are beginning to cut perks and benefits due to trouble with the economy. However, there are concerns that adopting this trend will leave organisations worse off.
It’s been dubbed the “perkcession”, as Australia joins in on the global trend. People2people Recruitment conducted a poll that revealed that a third of Australian employers have cut perks in 2023.
However, with talent and skills shortages affecting plenty of industries, cutting employee benefits could leave organisations worse off as the war for workers wages on.
“The challenging economic climate is leaving little room for salary increases, and employers are also needing to look at other ways to deal with cost pressures, which is why perks are now on the chopping block,” said people2people Recruitment’s NSW managing director, Catherine Kennedy.
“However, attracting and retaining talent in such a tight labour market is critical today. Employers who can’t afford salary increases must make sure they don’t cut off the individual benefits that were keeping their people happy in the first place.”
For those who simply cannot afford to continue offering perks, Ms Kennedy said that attention should be shifted to other areas to keep employees satisfied.
According to people2people Recruitment’s 2023 Annual Salary and Employment Report, employees revealed their most important workplace offerings:
- Management support and trust (69 per cent)
- Training and development (64 per cent)
- Work/life balance (64 per cent)
- Job security (63 per cent)
- Career opportunities (62 per cent)
- Work purpose (62 per cent)
- Leadership style (53 per cent)
- Salary and bonuses (52 per cent)
- Flexible working (51 per cent)
“It is now essential to identify what makes your employees stay, without using blanket approaches as talent retention strategies. In the hybrid world of work, support and trust from management remains the most effective way to make an employee feel valued,” said Ms Kennedy.
It should be noted that perks and benefits don’t always have to be flashy. Simple things that make workers feel appreciated can be just as effective. “Shared workplace perks that sometimes have a lesser monetary value can help create a more positive culture,” Ms Kennedy explained.
If unavoidable, Ms Kennedy gave three tips to help ease employees when a perkcession is necessary:
- Always be transparent with employees as to what needs to be cut and why. Take people on the journey with you; don’t just take it away.
- Look at the long-term. Offering training and development, even if it needs to be facilitated by internal team members, can deliver a better outcome over fruit and yoga classes.
- Don’t U-turn on all wellbeing benefits. Maintaining a productive workforce through a downturn will be the real “benefit” for everyone.
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Benefits include any additional incentives that encourage working a little bit more to obtain outcomes, foster a feeling of teamwork, or increase satisfaction at work. Small incentives may have a big impact on motivation. The advantages build on financial rewards to promote your business as a desirable employer.
Jack Campbell
Jack is the editor at HR Leader.
