As I mentioned in my last article, employers spend big money on employee perks, with some Silicon Valley companies spending up to a cool $26,000/year per employee. These perks range from catered lunches to cash stipends for vacation, but what do they really do to attract and retain employees? Do they really matter? What's the true cost?
Today's hiring market is extremely competitive and companies must have clear strategies to attract and retain the best and brightest talent. Employers and employees alike have identified a whole host of appealing benefits, including ones that are cost-effective and quick to implement, as well as ones that really require an investment on the part of the employer in terms of time and money. An interesting and comprehensive study was released earlier this year about the cost of employee happiness and what benefits really matter to employees. Let's take a look.
Immediately, you see that health care, flexible work hours, vacation time and work-from-home options are among the most important benefits, while employee outings and free snacks aren't that important at all.
It is critical to understand what employees really value because there is a monetary cost to every one of these benefits. Take a look at the costs of these benefits for a $60,000/year base salary job:
*How costs were estimated, courtesy of Fractl survey.
What Doesn't Matter
We when looked at the results of our first eNPS survey, some of the results surprised us while others did not. First of all, just like the research says, catered lunches do not make employees happy. We did an A/B experiment where we catered lunches for one team for an entire quarter and found that it had zero impact on eNPS. When it comes to salary, we have taken a similar approach. In another experiment, we adjusted salaries across different teams at the 40th, 60th, 75th and 90th percentiles for compensation and found little increase in eNPS from the 60th to the 90th percentile, so we target the 60th percentile for compensation. Again, compensation is important, but it isn't the silver bullet of employee happiness.
What Employees Really Want
After our first eNPS survey, we knew we had to make some changes. We read thousands of verbatim comments, and continue to every quarter. Consistently, some of the most frequent comments are about wanting better pay, better food and cleaner bathrooms (our bathrooms are always clean). I talked above about how we actually did A/B testing on pay and food and found they had no impact on eNPS. We have tested many other factors and have found the following three to have the most outsized impact on eNPS:
- Great facilities
- Amazing benefits
- Connection to leadership
At TaskUs, we have the coolest offices in the BPO industry - maybe in any industry. We have gone out of our way to avoid the 50 Shades of Beige you see in almost every contact center because that doesn't make employees happy. In fact, we have gone so far to the other extreme that we have an office in a mall that is designed as a coffee shop, where the public can come in for a cup of joe and jump on the wifi, all for free. What's really interesting about this location is that 30% of the employees at this site actually applied for jobs after walking in and enjoying the free amenities. That's ridiculously good office space.
Other offices have themes like steampunk and an alpine forest, and they also have sitting and standing desks, full gyms, sleeping rooms designed after a Japanese sleep pod hotel, video games and pool tables. We have seen our employee satisfaction score on facilities increase by 60 points in the last three quarters.
Next on our list was truly amazing benefits. When done well, benefits not only attract employees, they also make life's inconveniences more bearable and help keep employees engaged at work. At TaskUs, we offer fully-paid health insurance for the employee and up to two family members, as well as generous plans for time off. In the U.S., we offer a competitive 401(k) retirement plan. In the Philippines, we offer four months of paid maternity leave. We believe in the power of education, so in the Philippines we also have the TaskUs Scholarship plan that provides a fully-paid education for one child per employee. These are benefits don't come cheap, but we have found that world-class benefits are effective at attracting and retaining the best employees.
Connection to Leadership
Finally, and most importantly, our employees told us they want a connection to leadership. The most important factor in employee satisfaction is the employee's relationship with their manager. Not surprisingly this is also the hardest factor to create. You can pay more for great facilities and world class benefits. You can't fake leadership.
It also happens to be the most important factor in employee engagement. I want to reiterate something I said last week because it's a really important point:
There is an almost 1:1 correlation between eNPS and the employee's view of their manager. In other words, every point higher an employee rates their manager on a scale of 1-10, translates to a one point increase in that employee's eNPS score. This is reason we are so committed to creating an environment where employees have the right relationship with their leaders.
Studying our eNPS results we found two incredible stats:
- 35% of employees who rated their managers a 6 or below left TaskUs within a year
- 61% of employees who rated their managers a 3 or below left TaskUs within a year
Attrition plagues most BPO providers, and the cost to replace and train a lost employee can be as high as 1.5- 2.0X an employee's annual salary. Retaining people is important, but giving them a path to success and a career is even more impactful. Our training programs help teammates and team leaders continuously improve themselves, and create happy, productive, tenured employees who are loyal to both TaskUs and our clients.
People are our most valuable asset, and without them, TaskUs would not be where we are today. We know our frontline employees handle high-stress/high-value customer experiences, and it is our responsibility to ensure they are trained to handle these situations with confidence and great care. Simple leadership skills go a long way.
Now that you know what employees really want, you're probably asking, "So what? Do happy employees actually impact company performance?" Find out next week.