A World Cup-style company soccer tournament held in Brussels, a $60 monthly stipend for that expensive juice cleanse you read about in Goop, mobile onsite spa and dental treatments — these are just a handful of the generous and, in some cases, over-the-top perks given by some of the top companies in the country to their employees. And why not? Glassdoor found that 57% of job seekers count company benefits among their top considerations before taking a job.
But a new study shows job seekers may actually be putting too much value on perks at the expense of getting a higher salary.
A report from the National Bureau of Economic Research (NBER) shows that employees put a surprising amount of value on nonmonetary workplace perks, such as relaxed work environments, jobs that are less physically demanding and opportunities to telecommute. And in some cases, workers were willing to give up income to get these nice-to-haves.
The study — conducted by researchers from the Rand Corp., Harvard Medical School and the University of California at Los Angeles — didn’t consider health insurance or pension plans as part of the survey since these benefits are directly tied to salary. Instead, it examined intangible fringe benefits and how individuals value them.
The key takeaway? A day of paid vacation may be worth more to an employee than it should be.
According to the study, those with zero days of paid time off (PTO) might choose 10 days of PTO over a 16.4% wage increase, even though 10 days only make up 4% of a typical 250-day work year. Employees were also willing to take an 8.4% pay cut for a job that would let them work individually instead of on a team.
Demographics also played an important role in how people valued workplace perks. Undergraduate women were willing to give up 7% of their pay to have a job that included the option of working part-time hours, while men were willing to give up just 1% for the same benefit. In fact, women, on the whole, were more willing than men to trade monetary compensation for on-the-job amenities.
Even more surprising: When an employee switched jobs from a company that offered none of the benefits included in the study to another company that offered all of them, they valued that change as much as a 56% salary increase.
While workplace benefits have value (who doesn’t enjoy socializing during Thirsty Thursday?), the study highlights whether this generation of workers might be putting too much emphasis on employee perks, especially when real wage growth for the middle class grew by just 6% between 1979 and 2013.