Tech companies dangle perks to lure millennials
San Jose, Calif. — The Perk Wars are raging across our nation.
With cutthroat competition for talent and a sizzling job market in Silicon Valley and beyond, tech companies are seeking to attract and retain employees by pretty much spoiling them rotten.
The valley has always been a fertile breeding ground for workplace goodies, championed famously by Google with its gourmet cafeterias and on-site massage rooms. But in these talent-hungry times, Google seems almost stodgy compared with startups like crowdfunding platform Tilt in San Francisco, where employees after a year on the job get a free plane ticket anywhere in the world. Or real-estate giant Zillow, which offers free overnight shipping of breast milk from nursing moms on business trips to their homes. Or even software behemoth Salesforce, which recently held a “Miracle of Mindfulness Day” where experts in higher consciousness equipped “employees with mindful tips to help them through their work day.”
Millennials, especially, are getting a ton of “bennies,” thanks in part to all the startups whose mission is to deliver cool perks for other startups. Executives at Blueboard, which helps GoPro and others reward their employees with mind-blowing experiences, are seeing explosive growth as they race to cater to the millennial’s every inner-dream.
“Companies are realizing that millennials really care about perks,” says co-founder Kevin Yip. “And they’re looking for more and more ways to keep employees excited and to keep them from leaving the company for another.”
With its mantra that “cash is quiet” and its belief that employees prefer experiential benefits more than financial ones, Blueboard provides perks for clients like lessons in stand-up comedy or the chance to be James Bond for a day, complete with rented tux, a sky-dive and lessons in making the perfect martini.
These days, benefits other than the traditional health care insurance and retirement plans are all over the map. Business management startup Domo gives pregnant employees $2,000 for maternity clothing. Employees at Credit Karma in San Francisco can relax during breaks in the company’s jam room, complete with soundproofing, drums, amplifiers and guitars. Other perks are, well, pint-size: millennial stock-trading firm Robinhood has its liquid cheese machine. And Rational Interaction, a digital production studio, offers “Breakfast Sandwich Wednesdays” wherein the perk team “scours Seattle for the best new breakfast sandwich, then brings in enough for the whole team.”
Meg Virick, a business professor at San Jose State University, said the push to offer ever-perkier perks by the corporate world sometimes reflects a larger reality.
“Companies are trying to outdo each other with these perks,” she said, because wages, at least nationally, haven’t risen dramatically. “So these perks are taking up a bigger and bigger chunk of the total compensation offered to employees.”
Part of the attraction to employers, she said, is that “they’re revocable if the company gets into a financially tight spot; you can offer yoga classes one day and stop them tomorrow, which gives the employer much more flexibility in their offerings. You can’t do that with wage and salary structures, which are much more difficult to change.”
At the same time, in addition to salary and traditional benefits, more and more companies are offering financial perks tailored to young millennials coming to work in a part of the country grappling with soaring rents and home prices. With some new hires carrying huge student debt, the financial picture can seem overwhelming.
As Richard Cordray, director of the U.S. Consumer Financial Protection Bureau, put it in a recent report, “some of the initial research on financial education in the workplace already suggests that a financially capable workforce is more satisfied, more engaged, and more productive for their employers.”
San Francisco-based Sindeo Mortgage helps its 75 employees with — you guessed it — low-cost home loans that have deeply discounted fees. Staples is using vampire-themed games to get employees excited about money-management and investing in a 401(k). And a firm outside Seattle called Pacific Market Research provides its employees with financial skills training, including how to deal with debt collectors.
“There are two types of perks — one is lifestyle and the other is financial,” said Shashank Sundareshan, 29-year-old CEO of a Silicon Valley startup that offers companies student-debt relief assistance for their employees. “The idea of a workplace cafeteria with free food is great, but more and more startups are turning to financial perks like tuition reimbursement or even help with a mortgage.”
He says many debt-encumbered young employees end up jumping from company to company, chasing higher salaries just to pay off their mountain of debt. “That’s bad for the employee and for the employer,” said Sundareshan. “Fifty-to-70 percent of new hires out of college aren’t thinking about 401(k)s, they’re thinking about ‘How do I pay off my debt?’”
Sundareshan said his company’s service, where they act as lender and help refi the employee’s student loans with a much better rate, “is exactly the sort of perk that might attract someone to a company, but also keep them there.”
Companies and their perks
Tilt: Free plane ticket anywhere in the world after a year on the job.
Zillow: Free overnight shipping home of breastmilk from nursing moms on business trips.
Salesforce: An on-site “Miracle of Mindfulness Day” where experts share with employees “mindful tips to help them through their work day.”
Domo: Pregnant employees can get $2,000 for maternity clothing.
Credit Karma: A workplace “jam room,” complete with soundproofing, drums, amplifiers and guitars.
Robinhood: A liquid cheese machine.
Rational Interaction: “Breakfast Sandwich Wednesdays” — the perk team “scours Seattle for the best new breakfast sandwich, then brings in enough for the whole team.”
Sindeo Mortgage: Help getting low-cost home loans with deeply discounted fees.
Staples: Vampire-themed games to get employees excited about money-management and investing in a 401(k).
Pacific Market Research: Financial skills training, including classroom instruction on how to deal with debt collectors.
Filld: Discounts on fuel and sometimes free gasoline.
Zipongo:Free dietary assessment of employees’ nutritional levels and a personalized meal plan.
Facebook, Apple: Female employees have an option of freezing their eggs.
Rover: Three comp days bereavement leave to employees for the passing of their pet.
Source: Mercury News reporting