From performance bonuses to babysitting, Deliveroo vouchers to doggy day care, employee benefits packages have got a whole lot more interesting.
Big employers use headline-grabbing benefits to position themselves as desirable and to attract top talent. From carpooling to counselling, grocery delivery to co-working hub vouchers, some companies are even offering free babysitting to make sure knackered staff get out on date night.
But which perks are worth the most, and how do you make sure you are getting everything available?
Benefit of age
In addition to salary, good benefits increase an employer’s chance of beating others to the best staff. Some benefits are arguably aimed at a specific demographic only, leaving other applicants cold. This may be a strategy.
Would you be persuaded by seemingly generous doggy day-care vouchers and Just Eat delivery? These benefits signal that new hires can expect to be time-poor, unable to commit to mealtimes at home, or to responsibilities outside of work.
They are likely to be aimed at attracting those for whom the office can be dominant in their lives — they won’t require being away from it much.
If that’s where you are at, then these perks can pay off in the short term. A dog sitter in Dublin city for example is about €25 a day, or about €4,500 a year for someone in the office four days a week. Those travelling for business can expect to pay €35 for overnight dog sitting.
If you’re offered food delivery credits as a perk, know that how you use them may be restricted. In October, staff at Meta in the US were fired for eating the meal at home instead of the office.
Meta, like many big tech companies, offers free food to employees based out of its Silicon Valley headquarters. Staff in smaller offices without a canteen are offered Uber Eats or Grubhub credits, for example, for food to be delivered to the office.
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They are given daily allowances of $20 for breakfast, $25 for lunch and $25 for dinner. Employees who were getting the meals sent home when they were required to only eat the food in the office were fired. Some perks leave a bad taste.
Less than one per cent of employers offer anything by way of childcare vouchers, says Trayc Keevans of Morgan McKinley survey.
It’s your pension, stupid
What’s the benefit the employees in Ireland most care about? No, it’s not doggy day care that’s really keeping us awake at night, but rather how to pay for our lives once we retire.
Pension tops the list of the most desired benefits, according to a survey of 3,400 professionals and 650 employers globally as part of a 2024 report by recruiter Morgan McKinley.
“We are seeing employees younger than ever before actually looking at pension,” says Trayc Keevans, Morgan McKinley Ireland’s global foreign direct investment director.
“It wasn’t as important before, but in the most recent survey, right across the board, pension was an important benefit,” says Keevans.
By 2046, Irish men can expect to live to 85 and women to 89. So if you retire at the current State pension age of 66, you’ll have about 20 years of living after your last pay cheque.
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If you start to save for retirement at age 30, on a salary of €40,000, you will need to set aside a minimum of 18 per cent of gross salary every year until age 66 to get an income of €2,000 a month in today’s money – and that’s including the State pension, according to Pensions Authority calculations.
With parenthood and home ownership happening later than ever, the cost of supporting children and paying a mortgage is now stretching past retirement age. Housing costs mean more people will be renting in retirement too. This is bringing employer pension contributions into sharp focus for employees.
Don’t just ask a prospective employer if there’s a pension, ask about the terms, says Keevan. Some are only finding out when it comes to contract signing that the terms are less generous than their current employer.
Know the contribution from your current employer at least get that matched, says Keevans.
Smaller companies will usually pay pension contributions of between 3 and 6 per cent, matching your contribution, she says.
“Standard in a midsize to multinational company would be from 5 per cent matching up to manager level,” says Keevans. “Above that, a company might make contributions of anything up to 10 or 12 per cent. The larger multinationals will go even higher,” she says.
“The best pension I have seen was a 19 per cent employer contribution, with the employee being asked to make a contribution of 4 per cent, bringing it up to 23 per cent.”
Ask if pension entitlements increase as you climb the ranks. Employer pension contributions nudge up when you reach a certain age in some companies. Knowing this can help inform your job hunting.
Healthy outlook
Paid private health insurance is the second most valued employee benefit, according to the Morgan McKinley research.
A separate survey of 1,000 adults by Dooley Insurance Group puts health insurance top of the heap with 56 per cent of employees prioritising it.
More than three in 10 of us didn’t go to a healthcare appointment because we could not afford it, according to an Irish Cancer Society survey last month [November]. One in four, meanwhile, felt we must prioritise other costs over healthcare.
With the average adult paying €1,685 a year for health insurance, according to the Health Insurance Authority figures, this is a valuable perk for your health and your pocket.
“We find at manager level and above, the policy covers the spouse and dependents as well,” says Keevans.
Families with two adults and two children can pay up to €5,000 a year for insurance cover. You’ll need to earn about €10,000 to pay for that out of after-tax income.
The cost isn’t the only benefit with paid health insurance, but rather access to basic treatment in a reasonable time frame. Almost two-fifths of people put off a medical appointment due to pressures in the system, according to the Irish Cancer Society survey.
Work from home
Working from home takes the third spot as the most valued employee benefit, says Morgan McKinley survey. Remote working was also highly rated by participants in the Dooley Insurances survey, with 35 per cent placing significant value on it.
Remote working saves on transport and clothing costs. Coupled with flexible working, it may even enable some households to save on before and after-school care. This can mean significant savings.
Only about a fifth of those eligible are claiming the remote work tax credit, according to Revenue figures. The credit for a year averages about €40 to €60, so there’s no boon here.
The real pay-off is work-life balance, and job candidates are negotiating hard on this.
“If they take a holiday in Spain every year, they might ask to tag on another few weeks and work from there, if that’s permissible,” says Keevans.
“They are asking for a ‘work from anywhere’ policy in their contract that would allow them to do that. That’s quite attractive and we’ve seen a lot of people negotiate that.”
Companies are still grappling with how many weeks an employee can work out of the country, before triggering tax liabilities there, she says.
“Companies are tending to be quite conservative in guesstimating what that will be, the most we have seen is six weeks, but we see a lot of reluctance to it.”
Flexibility around working patterns remains a prominent request.
“Somebody might be joining a company where the standard is three days a week in the office, but it’s moving to four days. They might negotiate to move it back to three, but that can be difficult in the current climate,” says Keevans.
New hires could negotiate an initial period of office time to get to build relationships and understand the culture, with that being reviewed, she says.
Bonus
Who doesn’t love a bonus? If this is part of the package, it’s important to understand what’s on offer.
“Is it tied to your personal contribution and meeting personal performance metrics such as sales quotas, project milestones, performance reviews or KPIs? [key performance indicators]” says Keevans.
“We see some employers and if the company isn’t performing, there’s no bonus for anyone and if it is performing, then the individual performance piece is cleared for payment,” she says.
“The better you perform, the better chance you have of a bonus, but again, it tends to be predicated on the company performing first.”
Exceptions to retain top talent can be made, rewarding them even when the company isn’t performing, she says.
If a new employer needs you to join pronto, but that means missing out on the bonus at your old job, then negotiate on this.
“They may pay you a sign-on bonus to offset what you are losing,” says Keevans.
Share the love
Shares can be great, but only if you know what to do with them.
“In most cases, it’s a share purchase scheme that is offered. This is where you can buy shares in the company through salary sacrifice or bonus, usually at a discounted rate,” says David Looney or Alpha Wealth.
Typically if these shares are held for three years, you don’t have to pay tax on the benefit, so the only tax due will be capital gains on any increase in their value if sold.
Sometimes senior staff are offered stock options or restricted share units. Stock options are where you are allowed to buy a specific amount of shares at a fixed price in the future. If the share price is more than that price at the time you buy, happy days.
Options usually have an expiration date, so a perk like this requires ongoing review to assess if it makes sense to buy at a particular time.
Share prices can go up and down of course, and things can change quickly. You may benefit from independent financial advice.
“We meet clients with little in their pensions, large mortgages and car loans, little in other savings and investments, and then have hundreds of thousands worth of Google stock that they are too afraid to sell,” says David Looney.
“You can benefit from tax-free gains of €1,270 a year if selling, previous capital losses can be offset against gains too, but I would encourage anyone with a large amount of shares, six figures, to ignore this and put risk management above tax efficiency,” he says.
Selling company stock and investing the proceeds in a more diversified way means all your eggs aren’t in your employer’s basket.
