When it comes to compensation, annual salaries have always been the priority since they make up the vast majority of total compensation for employees. To help differentiate their offers over time, employers have added other forms of direct and indirect compensation for employees, such as company contributions to an employee’s pension or 401k plan, spot bonuses for individual or company performance, paid time-off, paying or subsidizing healthcare coverage, training stipends and more.
The challenge for employers is that nearly every company is now offering some mix of these as standard compensation, so there is a need for new out-of-the-box benefits. As an example, a recent Forbes article highlighted four benefits that are generating traction in the post-pandemic working world: reimbursement for work-from-home expenses, increased focus on employee financial health, student loan benefits, and sick time and personal leave for remote workers.
When starting Keep, our idea was to create an entirely new compensation category that would help employers with recruitment and retention while also significantly improving an employee’s personal financial health. The result — an upfront cash payment that vests over time. Salaries will always be the centerpiece of comp packages, but let’s think about the reality of the standard annual increase and what impact that has on an employee.
For someone earning the U.S. average salary of around $56,000 and getting the average 3.4% increase. When you break it down the $1,900 annual increase comes out to around $160 per month – which after taxes can be easily consumed by inflationary increases in food, gas, and other everyday expenses.
A lump sum of cash in the form of a Keep vesting bonus gives employees potentially thousands of dollars or more at once to pay down debt, put toward retirement, or contribute towards other financial goals. We not only see this as a benefit for employees, but it also provides three main benefits to employers:
- Flexibility. In today’s hybrid working environments, employees put a premium on flexibility – ranging from their compensation packages to work schedules. Keep Vesting Cash Plans are completely configurable for employers in terms of bonus amount and vesting schedule – all while also giving employees upfront cash for more personal financial flexibility.
- Motivation. Receiving a Keep bonus from their employer demonstrates to an employee that they are valued, and the employer actively wants to keep them – and keep them happy – something that should fuel additional motivation for them to be productive and hit performance goals.
- Trust. Often the level of trust between employer and employee is not clear. Is that employee about to leave? Does my employer value my work? With Keep, employers have another way to tangibly demonstrate how much they value and trust an employee through a vesting cash bonus that keeps the employee engaged and productive over a period of time.
Thinking outside the box is how great ideas are born, such as AmEx essentially creating the U.S. retirement industry with the first private pension plan in 1875. In today’s competitive job market – and with employees increasingly facing rising costs and burdened with student loans and other consumer debt – it’s time for employers to start thinking outside the box on new compensation benefits that can have an immediate impact on employees’ lives.
If you’re looking to attract and retain employees by revolutionizing your compensation packages and increasing the value of your compensation, schedule a Keep demo today.