Payroll trends are showing that companies are investing less money in raises for their employees, and more in benefits packages. This is following reports by One Medical Group on just how much of an impact benefits packages have on employees’ workplace satisfaction.
Raises remaining fixed
The average increase in employee salaries is projected to be 3% in 2019, a rate that has held constant for the last 3 years. A few roles -- IT, sales and marketing -- have seen higher raises due to the increasingly technical skills required for those jobs. But, overall, raises have remained stagnant, which is surprising as unemployment rates have plummeted and job openings have increased.
New benefit offerings
To retain employees, companies are relying more and more on optimizing their benefits packages over doling out yearly raises. “Those are investments that don’t show up in paychecks, but are nonetheless very meaningful to employees,” says Don Lowman, senior client at the HR consulting firm Korn Ferry. “Companies are starting to move toward these practices instead of company-wide raises because there’s more return on their investment.”
Employers are especially focusing on promoting financial wellness amongst their employees. Doing so increases retention and alleviates some of the financial stresses that can hurt employee production.
Student loan repayment benefits
Student loan repayment is one great benefit that employers have utilized to recruit talent and promote financial wellness for their employees. With nearly 7 out of 10 graduates finishing school with student loan debt, much of the employee base has
Employers often opt for student loan repayment plans that include monthly contributions to participating employees’ student loan debt. This contribution, contingent on employees still making the monthly payments due on their balance, can help borrowers get out of debt years faster and save thousands on accruing interest.
Employees are more likely to stay with companies that provide student loan benefits, according to research by Oliver Wyman, likely due to both the financial incentive and the loyalty built by the benefit offering.