Workplace perks are shrinking: Which employee benefits matter most in today's job market?

As organisations tighten budgets, employees are bound to look beyond flashy office perks and focus on benefits that provide lasting financial security, wellbeing, and career growth. Here's what to prioritise, and why it matters.

Workplace perks that once helped employers stand out are becoming harder to find as organisations tighten budgets amid ongoing economic uncertainty. While freebies such as snacks and games rooms may be disappearing, employees are placing greater importance on benefits that support their financial wellbeing, career growth, and work-life balance.

Against this backdrop, AI career hub Kickresume has released a checklist to help employees identify which workplace benefits deserve the most attention. The findings also offer employers insights into which benefits are likely to have the biggest impact on attraction and retention.

While the survey is based in the US, Human Resources Online believes its findings are equally relevant to the Asian market, where employers are also balancing cost pressures with evolving employee expectations.

Meaningful benefits go beyond workplace perks

According to Jayne Murphy, an HR expert cited in the survey, benefits that genuinely improve employees' lives make people feel "valued as whole people rather than interchangeable resources". She said the most meaningful benefits are those that ease financial worries, support long-term career development, and improve employees' physical and mental wellbeing.

These investments also benefit organisations. Murphy noted that meaningful benefits foster stronger engagement, improve retention, and build greater organisational commitment. Supporting this, a 2024 survey of 1,500 Americans found that feeling appreciated was the top factor influencing employees to stay with their employer.

Murphy added that understanding which benefits employees value most also helps organisations design benefits packages that better reflect their culture and workforce needs.

The core benefits employees now expect

While employee expectations vary across regions, several benefits have become essential rather than optional.

In the US, comprehensive health insurance remains one of the most important benefits because healthcare is often tied to employment.

Paid annual leave is another key expectation. However, leave entitlements differ significantly across markets. Employees in many European countries typically receive between 25 and 30 days of paid annual leave, while the average American employee receives 11 vacation days, according to the US Bureau of Labor Statistics.

Career development opportunities also remain a major consideration, particularly for employees looking to build long-term careers within an organisation.

Flexible working arrangements have similarly become a must-have for many professionals, with hybrid and remote working options continuing to influence where people choose to work.

The above aside, Murphy noted that while competitive salaries remain a priority for employees, compensation should be viewed separately from workplace benefits.

The employee benefits workers value most

Beyond the essentials, Murphy identified five benefits that employees generally value the most, although she noted that priorities can "shift dramatically" depending on a person's stage of life and circumstances.

Paid parental leave

Parental leave is among the most desirable employee benefits, particularly in countries where statutory leave provisions remain limited. Providing additional paid leave helps give new parents greater financial security and peace of mind during a major life transition.

Mental health support

Mental health support has become increasingly important as awareness of workplace stress continues to grow.

In practice, this may include access to counselling services, employee wellbeing programmes, or other mental health resources that help employees manage stress and maintain their wellbeing.

Performance-related bonuses

Performance-related bonuses and profit-sharing schemes also rank highly, as they help employees feel recognised and rewarded for their contributions.

They can also strengthen motivation by creating a clearer link between performance and rewards.

Enhanced sick pay

Enhanced sick pay offers employees greater financial security when illness prevents them from working.

Murphy described it as a wellbeing-focused benefit that gives employees reassurance during periods when they are unable to work.

Additional annual leave

Rounding out the top five is additional paid annual leave.

Some organisations reward long-serving employees with extra leave, while others simply offer more leave than the statutory minimum, helping employees achieve a healthier work-life balance.

Which workplace perks matter less?

While some workplace perks remain popular, they may be generally less influential than benefits that improve employees' daily lives.

Among the least important workplace perks identified in the survey are:

1. Free snacks or fruit
2. Ping pong tables and other recreational facilities
3. Company merchandise
4. Birthday gifts
5. Employee discounts
6. Onsite gyms

According to Murphy, free snacks and office recreation areas may make the workplace more enjoyable, but they are unlikely to address burnout, improve retention, or significantly influence employees' decisions to join or stay with an organisation.

Similarly, company merchandise often loses its novelty after the first few weeks, while birthday gifts rarely have a lasting impact on employees' day-to-day experience.

Employee discounts may also provide limited value if they are not relevant to employees' actual needs.

Although onsite gyms may sound impressive, Murphy noted that not every employee uses them, particularly those who work remotely or already have their own fitness routines.

Employers should stop calling the essentials 'benefits'

Murphy also believes organisations should avoid presenting standard employment provisions as workplace perks.

In many countries, pension contributions, statutory sick leave, paid annual leave, and work equipment such as laptops are legal or contractual requirements rather than additional employee benefits.

Instead, organisations should focus on benefits that go beyond minimum obligations. This could include enhanced parental leave, expanded wellbeing support, or more generous flexible working arrangements.

Missing key benefits could damage employer reputation

Failing to offer benefits employees consider essential could also affect an organisation's employer brand.

Murphy said employers that do not provide the benefits candidates expect risk damaging their reputation and losing trust among prospective employees.

However, simply offering benefits is not enough. Organisations also need to create a culture where employees feel comfortable using them.

For example, companies that offer unlimited annual leave should provide clear guidance and encourage employees to take time off. Otherwise, employees may end up taking fewer holidays because they worry about appearing less committed or affecting their career progression.

Different generations value different benefits

Employee priorities naturally change throughout different stages of life.

According to Murphy, Gen Z employees tend to value mental health support, flexible working, continuous learning opportunities, purpose-driven work, and student loan repayment assistance.

For millennials, parental leave, flexible working, professional development, mental health support, competitive salaries, and pension contributions become increasingly important as family responsibilities grow.

Meanwhile, Gen X employees are generally more focused on pension and retirement planning, private healthcare for their families, job security, life insurance, and flexibility to balance caring responsibilities.

For baby boomers, pension contributions, private healthcare, life insurance, flexible retirement arrangements, and job security remain the highest priorities.

Overall, Murphy observed that younger employees tend to prioritise flexibility and immediate wellbeing, while older employees increasingly focus on long-term financial security.

Flexible benefits can deliver greater value

Murphy believes organisations can improve employee satisfaction by giving people more choice over their benefits.

One option is to introduce a "cafeteria-style" or flexible benefits plan, allowing employees to select the benefits that best suit their personal circumstances while reducing spending on benefits that may go unused.

She also pointed out that meaningful benefits do not always require significant financial investment.

Simple policy changes, such as offering flexible working hours or genuine remote working arrangements, can provide substantial value without placing additional pressure on company budgets.

Murphy further encouraged organisations to regularly gather employee feedback through anonymous surveys to understand which benefits matter most.

At the same time, HR teams should clearly communicate what benefits are available and how employees can access them, while managers should lead by example by actively encouraging employees to make use of the support on offer.

Ultimately, Murphy stressed that there is no one-size-fits-all approach to employee benefits. As people's priorities change over time, regularly reviewing whether a benefits package aligns with their evolving needs is important.

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