There was a time when if we wanted someone to look after our dog, we’d book a kennel. If we wanted a manicure, we’d go to a nail salon. And if we wanted lunch, we’d go out and buy a sandwich. But recent years have seen the rise of many employers offering all this and much more as part of wide-ranging benefits packages in their quest to attract talent in an increasingly candidate-driven market – some of which are so all-encompassing that employees at some larger tech companies have most of their life admin requirements provided at work.
But as well as the more frivolous perks that also double as useful PR – the likes of so-called ‘pawternity’ leave for new pet owners, on-site beauty salons and home concierge services – employee benefits are also starting to merge into other areas of workers’ lives with far more significance. Some companies are now going as far as offering paid-for fertility treatment and gender reassignment surgery – things that outside the limitations of the NHS have the potential to cost thousands of pounds and still remain unaffordable for many.
But does this slow integration of employers into employees’ work lives and potential crossing of the boundary between personal and professional go too far and stand to cause problems further down the line?
Employee benefits have always been important, says Debi O’Donovan, co-founder and director of the Reward and Employee Benefits Association (REBA), because it says a lot about a company’s culture and how they care about their employees. “Companies offering benefits such as fertility treatment or pet insurance suggest they care about their employees’ family and home life, whereas those that care more about the environment may have benefits skewed in that direction,” she says. “Some of the trends we’re seeing now are a direct result of the pandemic, such as an increased use of virtual GPs and wellbeing benefits,” she explains. “But actually, the biggest shifts we’re seeing were coming down the line anyway.”
Many of the changes to employee benefits can also be attributed to businesses taking a more in-depth look at their inclusion and diversity strategies, O’Donovan adds. While most employers do not want to discriminate against anyone, she explains, when they have looked at their benefits offering – often set up years ago – they have found they may be unintentionally discriminatory. For example, private medical insurance policies often have exclusions that affect women more than men as conditions linked to fertility in women, menstrual health issues or menopause tend to be excluded.
Not only are businesses “horrified” when they realise this, says O’Donovan, when they start to look at the impact of inclusion in their workplace, many realise they are losing their more senior women because of the menopause. Symptoms such as brain fog, anxiety, fatigue, depression, trouble sleeping, which are all linked to menopause, can have a significant impact on work and productivity levels.
“So that often leads to employers offering medical support for menopause. Then it doesn’t take very long before you start looking at fertility treatment for younger employees – both men and women. And so this whole idea of inclusion has suddenly opened up new benefits,” she points out.
But why are inclusion and diversity so important in the benefits arena? According to O’Donovan, it’s pressure from the “rise of being a responsible business” and meeting environmental, social and governance (ESG) targets.
“Big institutional investors – those that invest in listed corporations – will have to meet certain ESG targets in terms of where they put their investments. And this is played out through businesses having to be much more transparent about their diversity, inclusion, wellbeing and environmental targets, which is affecting the kind of benefits being offered,” she explains. “We’re also seeing a demand from employees for electric cars in company car schemes, which we didn’t see pre-pandemic, as well as e-bikes. This is probably because more people are working from home and not looking to commute into the office every day.”
The current focus on employee benefits comes as the UK is facing a skills shortage, particularly in the tech and professional services sectors. This in turn can cause salary inflation, where firms compete for talent by increasing starting wages. Employee benefits can help contain a surge in salary inflation. However, this can be dependent on how “deep the employers’ pockets are,” says Charles Cotton, senior adviser for reward and performance at the CIPD.
“Benefits such as fertility treatment and gender reassignment surgery are very expensive, so only firms with very deep pockets are going to be able to afford it. Many of these firms offering it will be looking at the business case: does it make sense for the organisation in terms of attracting and retaining talent, how will it help the business? The last thing any business wants to do is introduce an offering such as IVF and then suddenly withdraw it a few years later, because that sends a negative message to staff.”
Cotton describes increasing employee benefits as like “adding baubles to a Christmas tree” – if you add too many, eventually it begins to look a mess and the tree will fall over. “There is a danger of seeing a bandwagon for a certain benefit, even if it doesn’t necessarily make sense to you,” he says. “So employers need to think about how the proposed perk supports both the organisation and its people, because of the costs associated with it. It’s relatively easy to introduce a benefit, but much harder to get rid of it,” he adds.
Both Cotton and O’Donovan also warn of benefits packages that pay “lip service” or cure the symptom of a problem, rather than the problem itself. O’Donovan coined the term ‘benefit washing’, where it appears as if employees are getting a lot of benefits, but they actually have to pay for them themselves. This is not surprising, she says, when it comes to some of the medical benefits, which are expensive and therefore offered as a voluntary benefit, meaning the employee pays for it, but at a discounted price.
But for many firms, these types of packages, while unusual, are proving highly successful among employees. So how have these organisations gone about choosing and implementing them, and has it been the right decision?
In 2016, Lloyds Banking Group became the first UK firm to offer gender reassignment surgery as part of its health insurance plan. At the time, the group – which includes Lloyds Bank, Halifax, Bank of Scotland and Scottish Widows – estimated it had 860 employees who did not conform to a specific gender. A spokesperson told People Management: “We learned from listening to our trans colleagues and the wider trans community that there are real challenges in accessing healthcare, with waiting lists often lasting years, even just for a diagnosis.
“We saw an opportunity to make a difference for our scheme members by providing them with access to support and guidance. We’ve had overwhelmingly positive responses, with some colleagues describing this as both life changing and lifesaving. The ability to tailor benefits packages to suit individual needs and life stages is key to our benefits strategy. All benefits are reviewed on an ongoing basis to ensure they remain relevant and continue to be valued by our people.”
In that vein, Lloyds recently surveyed more than 5,000 employees and hosted focus groups to see what benefits they would like, which revealed a strong interest in sustainability-related perks. As a result, the company has now also launched a new ultra-low emission vehicle (ULEV) salary sacrifice scheme and improved its cycle to work offering.
But the major banking group is not the only business listening to its employees. London-based law firm Clifford Chance recently extended its healthcare insurance to cover fertility investigations and treatment, up to a cost of £15,000 per person. Offering staff such benefits wasn’t previously on the company’s radar, admits Anna Cotgreave, rewards and benefits manager. But after partnering with healthcare app Peppy – which offers support for life stages such as fertility, parenthood and the menopause – in March this year, primarily because of the menopause element, the company saw an increase in staff using the platform for fertility support, which put the idea of offering fertility benefits on the agenda.
“From our perspective, offering menopause support was important. We want to be a really inclusive employer and retain all our talent, so if we’re having women thinking about leaving because they’re struggling with their medical symptoms during menopause and needing more support, there’s something wrong,” says Cotgreave.
“Despite signing up predominantly because of the unique support offered on menopause, Peppy gave us feedback that the fertility strand of the app was the most popular, so that really got us thinking about how we can best support all our employees,” explains Cotgreave.
This year the firm added fertility treatment and investigations to its private medical scheme. The policy covers donor sperm, donor eggs, egg freezing, IVF and ICSI [intracytoplasmic sperm injection] – so is inclusive across genders.
But this is not the first time Clifford Chance has made a significant addition to its medical offering – a few years ago it chose to also cover gender dysphoria. “We want to ensure we’re offering cover that’s relevant to and supportive of all our employees,” says Cotgreave. “We want to support our employees in the moments that matter, and we want to change the lived experience of our employees.”
What is really important when offering such benefits, Cotgreave highlights, is that employees’ privacy is maintained: “We don’t want – and will never have – data about who is claiming for treatments and whether this is affecting our staff retention.”
Both Lloyds Banking Group and Clifford Chance say they had an overwhelmingly positive response from staff when they introduced their respective benefits. Much of this is because the benefits had a significant impact on people’s health, which over the last few decades has become increasingly important to employers, says Stephen Holliday, founder and CEO of financial wellbeing app Level. “If you wind the clock back 15 to 20 years, employers started to get serious about playing a role in the physical health of their workforce,” he says. “Then five or six years ago, mental health strategies started to gather pace.”
Employee benefits, generally speaking, are there to support the employee, O’Donovan says. While there are some very unusual perks on offer, such as secret holidays, sleep pods in offices and even beauty budgets, many are practical and tailored to the employees in question.
“We are very much seeing the rise and arrival of the individualisation of benefits,” she explains. “Just as Amazon gets to know you and offers you only things you’re likely to buy, benefits are getting more bespoke, and they’re using employee experiences to get to know you. For example, if you told HR you are expecting a baby and you’ll be going on maternity leave, then you might start getting messages about benefits linked to having a child.
“So going forward, you could have something different for every employee – when it comes to benefits, there’s no such thing as too much.”