Does your company offer unlimited holiday? How about free catering on site? Free hair dresser? On site dentist? Do you get to bring your dog to work? £2,000 annual travel allowance for all permanent staff?
If you enjoy even one of these, I am pleased for you, you have played a blinder!
In the more likely event that this all seems foreign to you, I am talking about “Big Tech” rewards culture. See link for more examples: Benefits Tech Companies Offer to Attract Top Talent (businessblogshub.com)
How are Big Tech Companies capable of offering so much?
Tech companies, the big household names we all know, exist in rarefied air. They typically possess a hugely privileged position of generating vast sums of free cash-flow, dominance in their market and crucially, they are relatively new. The consequences of this, are as follows:
- Deep pockets facilitate both resource into researching market-leading rewards as well as funding said benefits.
- Few barriers to change; no existing structures to break and remodel: if they want to change, they change.
- The propriety technology which these companies deliver, simply didn’t exist just a few years ago; so regulatory, legal, and tax regimes are in a constant state of catch-up to apply many of the rules which burden established businesses.
- In addition, we see governments around the world compete by offering favourable terms to big tech companies, seduced by “the shiny new thing” in hopes of future-proofing their economies.
Why do Big Tech Companies offer such attractive packages?
Your instinct on reading the above is probably a very reasonable “because they Can?”
They definitely Can.
However, the key reason they do it is because they have to. It is born of necessity. Staff retention in Silicon Valley is just as much of a challenge as anywhere else.
Average tenure stats sampled below:
AirBnB 1.64 years
Google 1.90 years
Meta 2.02 years
Those numbers do not shout happy, engaged employees, here for the long haul to me. I think there’s at least a crumb of comfort for any local hiring managers or business owners reading this. On the face of it, it is counter-intuitive; some of the benefits cited are incredible, and it is generally accepted that a solid suite of perks is a vital lever in attracting and retaining the best people, so does that idea need revisited?
What does it all mean?
It appears that the correlation between retention and perks (in Big Tech at least) is weak. In my view, that is because people are much more complex. There are a whole range of reasons for changing jobs, but it’s always a big call requiring some thought, and its likely that many of those fringe benefits seem trivial in the final assessment.
The turnover rates also support the view that these employers do a great job of attracting talent, but are much less successful in retaining it.
There also seems to be an element of diminishing returns in regards benefits initiatives. Google didn’t have on-site massage therapy on Day One, this is something grew with time. Others have not only bought into this, but seem to be competing to devise the most eye-catching and innovative perks out there – it’s like a benefits arms race. But adding more and more bells and whistles hasn’t moved the needle on retention.
There must be more fundamental factors at play in retention. Here are a couple of tech-specific issues driving lower retention rates:
- Short termism, e.g. goal to get to share price $x to trigger certain events can become exhausting and cyclical, not supporting the long term and this often colours the approach to people.
- Leaders tend to rise through the ranks not based on their people-skill, but on their expertise with their subject matter; delivery will typically take precedence over people as that’s the comfort zone for managers and ultimately that’s what keeps the lights on.
That sounds a lot like a “results first, people second” culture, something that isn’t unique to Big Tech.
If you are on the job-hunt, look for benefits that make a meaningful difference to you as opposed to things that may sound cool but have no material impact to your enjoyment of work.
Exercise caution where there are eye-catching benefits touted in your offer: Is this actually Live? Does it really function? Do all your managers and leader fully support employees who wish to engage with what is offered?
It is encouraging that more employers are reviewing and refreshing what they are offering their people locally. I can nearly guarantee that you will see an uptick in interest in your roles if you deliver a market-leading package of benefits; in time, that will also convert to fresh faces coming through the door, motivated to work in a forward thinking and positive environment.
However, never lose sight of the fundamentals:
- Basic Salary
- Clarity of Purpose (Company and Individual)
- Good Manager
- Work Life Balance
For the vast majority of us, it is these factors that are key to retention – all of the other perks are nice to have, but they will not sustain us long-term unless it fits a broader picture of company culture and traditional remuneration.
Thank you for reading my article. Please feel free to drop in your most outlandish/favourite benefits requests in the comments.