Benefits or Culture: What Do Employees Really Want?
For most modern companies, the idea that “people are the key to our success” is not an exaggeration. Qualities like innovation, creativity, grit, integrity, teamwork, and raw brainpower simply can’t be spelled out in the employee manual; instead, organizations must rely on attracting the types of people that make these qualities come to life.
This may seem obvious but it’s remarkable how many organizations fail—despite their best efforts—to attract and retain top talent. While they’re busy creating insane benefits packages, tricking out offices, granting stock options, throwing lavish parties, and signing bonuses, they’re still struggling with keeping their best employees and attracting new ones. More often than not, it’s because they have a reputation: a reputation for being a shitty place to work.
This is why leaders need to understand that benefits and culture are not the same, and although the difference between them may seem academic at first, there’s a clear distinction that has real-world consequences. Ask Goldman Sachs or Uber how it’s been going for them lately; despite their ability to deliver great benefits, people just don’t want to be part of their culture anymore.
The Difference Between Benefits and Culture
Benefits are things you get in exchange for work. Obviously, money is at the top of the list, but benefits also include things like a nice office, prestige, challenges, good coffee in the break room, and other perks of the job.
Culture is what it’s like to work somewhere. Of course, culture can be defined in terms of values, attitudes, social norms, and the like, but at the end of the day, an organization’s culture governs the day-to-day experience each individual has. Culture determines things like blame, politics, competition, cooperation…or simply how likely you are to smile during a meeting.
Benefits are the things you get from work;
Culture is what it’s like to work there.
So, no—a ping-pong table or a progressive PTO policy doesn’t equal “a great culture.” Those are simply benefits. Sure, they may serve as symbols of culture or as tangible expressions of an organization’s values, but they are not culture; they don’t dictate what it’s like to work there. What does equate to culture is the likelihood of employees playing ping-pong at three o’clock in the afternoon or whether people feel comfortable taking time off.
Benefits are basically table-stakes when competing for the best-of-the-best. Sure, they may get people to interview for open positions and they may even be enough to get a few to join the team, but eventually, a great culture is the only way to keep talented people engaged.
The Consequences of a Toxic Culture
Organizations with a toxic culture will experience:
- Failure to attract talent. Reputations count because most talented people have options for where they work. The bottom third of the talent pool will work anywhere willing to put up with mediocrity, but those in the top third can make a living anywhere. For them, the quality of their work environment is often the deciding factor and they won’t look twice at an organization with a bad reputation.
- Turnover. Whether it’s a new car or a new job, benefits wear off. People become accustomed to their salary, they get used to the coffee, and they take the holiday party for granted. What doesn’t wear off? Working with a bunch of fools—that’s painful every single day. No matter the benefits package, a toxic culture will force good people to leave.
- Poaching. It’s only a matter of time before a talented person gets hit up by a competitor promising them the world. This isn’t the good ol’ days where employers can keep their best and brightest hidden behind closed doors; LinkedIn has changed all of that. However, a strong culture can be a durable advantage, keeping employees loyal as they receive countless DMs from greedy recruiters.
- Overpaying for talent. One way to keep people around despite a toxic culture is to throw money at them. This seems to work in some industries (finance comes to mind), but even then, it’s rarely a long term solution. Eventually, employees will realize the money just isn’t worth it anymore, especially if the organization has to cut back on the compensating benefits.
- Leftovers. Over time, a toxic culture will drive talented people away and repel any new ones from joining to take their place. What’s left over? The people that couldn’t get out, or those who are willing to put up with just about anything for the money and healthcare.
Offering Culture as a Benefit
Culture, if done right, can be the most important benefit of all.
When I started Oasis eight years ago, we didn’t have the luxury of overpaying for talent. Nor did we have a great office in a swanky part of town (we didn’t even have an office). We didn’t have healthcare until almost five years in, and our time-off policy amounted to “take time if you can.” In other words, there weren’t many benefits to working for Oasis.
Yet, from the very beginning, we’ve been able to attract our industry’s most talented individuals away from much larger, well-established companies. Not only did we attract the best, but we’ve also had zero turnover. No one has ever quit. After eight years and almost forty employees, we’ve built a team that not only outperforms our much-larger competitors but is widely considered a “great place to work”— which, in my opinion, is the highest compliment a company can receive.
All of this is thanks to our culture. People want to work at Oasis precisely because they want to work with the people that work at Oasis. Our team is smart, dedicated, and a blast to work with—all qualities that mean a lot to the industry veterans we regularly attract.
Culture is Key
The takeaway here is that great benefits do not equal great culture. But as we discuss in the video, great culture doesn’t happen overnight. It has to be created and maintained with purpose and intention. Though this process isn’t as easy as adding benefits on paper, the ROI is much greater.
Last Thing: LeadFromHome.blog
Creating and maintaining culture is even more challenging when trying to lead a team from home. Oasis has been 100% distributed since day one and I’m passionate about this subject, so I created a blog that gives advice to managers tasked with leading remote teams. It includes tons of articles on how to improve your culture and ways to create a greater sense of team cohesion despite the limitations of virtual offices.
Visit my blog, Lead from Home, or watch more on this subject from our eDiscovery Unredacted series.
Brandon Law
Chief Executive Officer