#Benefits

Let staff live and work anywhere

To hire and retain the best people, Airbnb designed a way for staff to live and work from anywhere. The success of this design is based on five key features:

1. Work from home or the office. Employees whose core job responsibilities don't require being in the office can work where they are most productive.
2. Move anywhere in the country you work in, and your compensation won't change. Airbnb designated a single pay tier for each country. Anyone's salary that was set using a lower location-based pay tier, received an increase. 
3. Travel and work around the world. Employees can live and work in over 170 countries for up to 90 days a year in each location. Permanent addresses for tax and payroll purposes are still required.
4. Meet up regularly for team gatherings, off-sites, and social events. Instead of spending a set number of days each week in the office together, all employees are expected to come together every quarter for about a week at a time.
5. Work in a highly coordinated way. Airbnb uses a single company calendar centered around its two major annual product releases. All events, collaboration sessions, and off-site visits are planned around this calendar, even for staff that don't directly work on those projects.

Be an ultimate user of your own products

Airbnb CEO Brian Chesky has always been an avid guest of Airbnb rentals, and in 2022, he began spending over half of each year living in them. His goal of becoming the ultimate guest was driven by the belief that all staff must become experts in every part of the product, and experience it from the user's perspective.

This long-standing belief in being a user of your products has also led Airbnb to provide a $2,000 credit to each employee every year to stay at Airbnb rentals. This stipend is paid quarterly, encouraging staff to understand the guest experience and incentivizing them to maximize their paid vacation time.

Make work the benefit

At Apple, you will most likely work harder and longer than you have ever worked in your life but will love every minute. Apple's philosophy on benefits is that: If you give people work that matters and a chance to make a dent in the universe than high salaries and perks aren't needed. In fact, at Apple:

• Salaries are competitive with the market, no better.
• The company gym and cafeteria are not free.
• There are no creative workshops, games, team building activities, or sleep pods.
• Working with nonprofits and having extracurricular activities are even discouraged as these are considered distractions.

While medical, dental, education reimbursement up to $2,500, and stock opportunities are provided, these costs are offset by low recruiting and training costs. Having a 90% retention rate, compared to the industry average of 20–30%, has its own benefits.

Be frugal and extra generous with benefits

When introducing new benefits, Google wants to ensure that any benefit will help their employees in at least one of three ways: Improving efficiency, building community, and driving innovation.

And while most of these benefits and perks cost nothing, except for the time it takes to set them up, Google does think it is important to be extra generous during times when employees need their employers most—especially when it comes to:

• Life insurance: If an employee passes away, the surviving partner will receive 50% of the Googler's salary for the next 10 years. If there are children, the family receives an additional $1,000 each month until the child turns 19, or 23 if they are a full-time student. While very generous, the cost runs about 1/10th of 1% of payroll.
• Paternity leave: Parents receive their full salary, bonus, and stock vesting for the time they are on leave, which ranges from 18 to 24 weeks. New parents also receive a $500 bonus to spend on home delivery meals for those first few extra tiring weeks.

View Google's benefits

Give experience awards, not cash awards

It is well known and accepted by Google staff that top performers receive much higher compensation than average employees. Any jealousy is reduced because salaries are a private matter and not shared. However, Google's large end-of-year cash awards given to top performers are very public.

After receiving criticism from staff, Google ran experiments to see if employees would be happier with experiential awards instead. Google created a control group of staff who were given cash, and experimental groups who were given trips, team parties, and other gifts of the same value as the cash awards.

When surveyed, staff found experiential awards to be "28% more fun, 28% more memorable, and 15% more thoughtful." Five months later Google surveyed winners again only to find that the happiness of cash recipients dropped by 25%, while the experimental groups were even happier about the experiential award than when they received it. Google has given out experiential awards since.

Pay top of market

Why hire 10 average engineers, when you can hire one "rock-star" who will make a bigger impact than all of the others combined. To hire and retain top talent, Netflix doesn't use a rigid compensation system with salary bands or merit increase budgets. Instead they:

• Pay top of market, in all cash. If you want stock, you can trade in some of your salary for discounted options.
• Adjust salaries only if the market changes. Some salaries may stay flat for years while others grow dramatically in a short time.
• Don't offer year-end bonuses, equity, refreshers, or other forms of compensation. Your salary is your salary.
• Fire adequate performers to afford top talent.
• Encourage staff to interview regularly to know how much they are worth.
• Make salaries public in the company to help employees know if they are fairly compensated.

Don't have a bonus system tied to goals

Instead Netflix pays their employees top of market. This is what drives innovation for them, not bonuses. Here's why:

• Bonuses don't incentivize
  If your employees are true high performers, an annual bonus won't make them work harder or smarter.
• Bonuses reduce flexibility
  No one can predict the future and Netflix needs to be able to adapt quickly. So why tie an employee's salary to a goal that might become obsolete in a year? As a result, Netflix employees will speak up when a goal is sending the company in the wrong direction, rather than remain silent just to keep their bonuses.
• Bonuses reduce creativity
  People are most creative when they have a big enough salary to remove stress, not when they don't know if they'll get paid extra. The proof is in this study.
• Bonuses don't give you a hiring advantage
  Where would you rather work: A company that offers you $200,000 salary plus a 15 percent bonus or just offers you $230,000?

Don't offer signing bonuses

Signing bonuses sound great to employees in their first year—but come year two, their standard 3% raise will feel more like a pay reduction when it doesn't even match their year one salary with signing bonus. Instead Netflix chooses to just pay top of market and leave it at that.

Provide benefits that encourage community activism

With a workforce committed to saving the planet, Patagonia provides opportunities for their employees to take an active role in protecting the environment. 

• After their first year of employment, employees are allowed to take two months off with pay, to volunteer with environmental activist groups anywhere in the world.
• Patagonia offices are closed on days when there are environmental rallies or protests in the area so employees can participate.
• If an employee or spouse is arrested while peacefully protesting for the environment, Patagonia will pay for both of their bails.

Reshape your work week to align with your employees' lifestyles

If you want your company's culture to support your employees' lifestyles, adjustments to your work schedule will need to be made. Patagonia introduced a 9/80 work schedule giving employees a three-day weekend every other week to allow for longer weekend getaways to climb, hike, and explore. This schedule also gives them time to go to the doctor as well.

Blur the line between work and family

With an onsite childcare facility, Patagonia's employees are able to eat with their children at lunch, put them down for naps, and even bring their newborns to meetings. But the idea to blend work and family time together didn't happen all at once. It began in 1983 when Founder Yvon Chouinard's wife brought a trailer truck to the office to allow a mother to breastfeed her colicky baby. From there, family benefits have grown to include:

• A subsidized onsite childcare center for children up to nine years old. This educational facility has certified teachers, bilingual programs and, of course, rock climbing and surf lessons.
• 16 weeks of fully paid maternity leave and 12 weeks of fully paid paternity leave
• A budget for nursing moms to bring their babies and nannies along on business trips

Patagonia estimates that they recoup 91% of the annual $1 million childcare budget through federal tax credits, productivity, and employee retention. There is also equity in pay and in leadership across the company, with women making up 50% of the workforce and roughly 50% of upper-management.

As an added bonus, the presence of children keeps the company atmosphere more familial than corporate. "Even for the people who don't have kids, you bring your best self to work around children."

Provide benefits that reinforce your values and personality

While Patagonia's benefits are generous, they are also strategically designed to attract serious athletes and environmentalists. They offer:

• Comprehensive health insurance, even to part-time employees, so that if they get hurt while climbing or surfing they can properly heal themselves
• An organic cafeteria that serves healthy, organic, and mostly vegetarian food
• Showers on site for after their afternoon surf
• Free yoga classes, scooters, surfboards, and skateboards for on- and off-site fun

They even give the best parking spots to those with the most fuel-efficient cars, not to managers.

Increase resourcefulness, motivation, and accountability through profit sharing

Through their profit sharing program, Southwest has directly connected the well-being of their employees to the well-being of the company. As each employee's profit sharing account grows with their tenure, their concern for the health and longevity of the company grows as well.

Staff become more resourceful, more motivated to step up and assume ownership, and more aware of how their decisions affect the bottom line:

• When looking to maximize speed and minimize fuel burn rate, pilots request more direct headings and altitudes and learn shortcuts in and out of airpots, as well as, which runways can be safely taxied to on a single engine.
• When 800 new computers were needed, employees bought them in parts and put them together in an assembly line cutting costs by 50%.
• Even when Southwest ticket agents let other airlines borrow office supplies, they will go so far as to follow the borrower until the item is returned.

In 2020, Southwest shared $667 million through their profit sharing program, which equated to more than 6 weeks of pay for each employee or roughly 12% of their salary.

Hire partners, not employees

Starbucks employees are called partners because that's what they are: part-owners.

Howard Schultz wanted to create a company that shared its success with all employees. This lead Starbucks to provide full health-care benefits for full- and part-time employees, free college tuition, and stock options through the Bean Stock program. All of which are sacred to the company and will never be taken away, even when pressured by Wall Street during the Great Recession.

Schultz felt that if employees were directly tied to the company's success, they would be empowered to have the same attitude, morale, and spirit as the CEO. This sense of belonging increased employee retention, cut training and recruiting costs, and improved the customer experience as customers saw the same face greet them each day.

“In a store or restaurant, the customer’s experience is vital: One bad encounter, and you’ve lost a customer for life. If the fate of your business is in the hands of a twenty-year-old part-time worker who goes to college or pursues acting on the side, can you afford to treat him or her as expendable?”-Howard Schultz

Pay a high starting salary and give raises often

Understanding that "stores with more, better-paid staff have higher sales per square foot and per employee than stores that try to cut customer service costs," Trader Joe's founder Joe Coulombe made it a practice to:

• Pay both full-time and part-time employees well. To Trader Joe's "a distinction between full-time and part-time is a false dichotomy, when it comes to productivity." So no matter the role, crew members are paid competitively. Full-time employees earn over the median family income of the store's region. Hourly workers earn well above minimum wage.
• Give raises twice per year. Every August and February staff are reviewed and given feedback by fellow crew members, mates, and captains of the store. Based on their performances, they can receive raises that are equivalent to a 7% increase each year.
• Give generous bonuses to store managers. Bonuses don't have a limit and have exceeded 70% of their base pay. Managers, in fact, have the ability to make more than executives if their store does well. As Joe Coulombe sees it: "Unless a bonus system promises, and delivers, big rewards, it should be abandoned."

In an industry where the average turnover rate is close to 50%, these higher salaries have made it easy for Trader Joe's to attract quality workers and keep their turnover rate to less than 10%.  

Take care of your employees during the worst of times

Besides benefits like health insurance, never expiring paid time off, and retirement plans for full- and part-timers, Trader Joe's also ensures that their crew are taken care of in times of disaster.

• When wildfires in California left one store badly damaged, rather than lay people off, Trader Joe's continued to pay staff for any shifts missed. This was not just for weeks but for the entire 13 months that it took to rebuild the store.
• During the early months of COVID when everyone was panic buying, Trader Joe's experienced a surge in sales. They took that extra money and put it towards a bonus pool that gave employees an extra $2 an hour. Even as sales eventually slowed to levels a little below normal, they changed the concept into 'thank you' pay where employees kept that extra $2 an hour for every 4th hour worked.

As Jon Basalone, president of stores, says: “We've been around for over 50 years, and we've never had layoffs. We stay true to what we know works for Trader Joe's and our crew members.”

Create ways for employees to reward employees

It feels good to be recognized, especially by your peers, so Zappos devised ways for employees to recognize each other. Recognition doesn't have to be for extravagant gestures, Zapponians are recognized for opening doors, remembering birthdays, and sometimes for just always having a smile on their face through several types of programs:

• The Zollar Program: Zappos has its very own currency that can be redeemed for Zappos branded swag at the company store. Employees recognize someone with Zollars by filling out the person's name online and saying how they were WOW'd.
• Master of WOW Parking: Win a covered parking spot for a week right near the office entrance. Zapponians nominate each other for this coveted spot by submitting a brief story of WOW to the Zappos Concierge (ZCON) team.
• $50 Coworker Bonus Program: Each Zappos employee can give one $50 bonus per calendar month to any other Zapponian. Employees print out these certificates and deliver them to co-workers in fun ways, usually with an explosion of glitter.
• Hero Award: Based on that month's Coworker Bonus submissions, a panel chooses a 'Hero of the Month' and three 'Sidekicks.' Heroes receive a $250 Zappos gift card or an experience of their choosing (e.g. jumping off of the Stratosphere tower), a reserved parking spot, a Zappos Hero cape, and a Hero pin. Sidekicks receive their own parking spot as well, a $50 Zappos gift card, and sidekick cape. No pin unfortunately.

Create opportunities to socialize with co-workers

When Zappos says they only hire people they want to spend time with, they are very serious about creating opportunities for those times to be had—inside and outside of work.

• Managers and employees are encouraged to spend 10–20% of their time outside of work with their fellow employees and coworkers. Happy hours, small team events, and BBQ's at a manager's home have ended up producing some of the company's best ideas.
• Exits throughout the office were turned into 'emergency exits' in order to create one single point of entry and exit to increase chances of "serendipitous interactions."
• Free lunches and snacks weren't created as a retention strategy but as an opportunity for everyone to sit down together as a community.

Spend money on happiness, not on high salaries

Salaries at Zappos tend to be more towards the median level of competitive salaries, hovering around the 75th percentile. As Donavan Roberson, Zappos Insights Culture Evangelist, explains: “We invest that 25 percent difference into activities that build our culture. Some might say that we are taking a hit in salary, but we are building a culture dedicated to the happiness of our people. When a person’s life comes to an end, that person doesn’t look back and think, ‘Okay, how much money did I make per year?’ The person is thinking, ‘How was my life; how was my every day; how much did I enjoy my job; what did I accomplish; what did I learn?’ These are the things that are much more important to people than salary.”

Have fun without breaking the bank

Fun doesn't have to cost a lot. While Zappos does have extravagant parties and brings the occasional camel into the office, they also have fun with the tightest of budgets. The Zappos full-time team of Fungineers are always looking for simple ways to break up the day and bring happiness to their coworkers with:

• Marshmallow Peep diorama contests
• Minute-to-Win-It competitions where participants have a minute to complete some type of challenge like eating Oreos or shaking ping pong balls out of empty tissue boxes that are tied around their bottoms
• Homemade carnival game events
• Office Nerf gun wars
• Parking lot water gun fights
• Weird talent shows that gives everyone an opportunity to have their moment of glory
• Zappos Idol karaoke competitions
• Mardi Gras parades where each department is given a big cardboard box and $25 to make a float
• Bald & Blue days when Zapponians shave each other's heads or dye their hair blue to raise money for a charity

Hump Day at Zappos

@InsideZappos

The Zappos Peep Show

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Reward punctuality and perfect attendance

Zappos created the Panda program in order to combat unscheduled absenteeism and also to reward call center staff who have perfect attendance with additional time off. The program works like this:

• Employees receive one point for every day they miss or come in late.
• At the end of a predetermined period, employees with zero points are given a certain number of paid hours off.
• The hours are accrued over time and can be used as entire vacation days.
• Employees can use their vacation days without affecting their score.

Encourage nap time at work

Four massage chairs surrounded by a giant fishbowl await employees in the official Zappos Nap Room Aquarium. Zapponians can use this room on breaks, at lunch, or anytime they can't keep their eyes open. While it may seem like a perk to just attract millennials, studies show a 10 to 20-minute nap at work actually increases creativity, intelligence, alertness, memory retention, and performance.

See how Zapponians sleep with the fishes, literally.

Provide benefits of convenience

To cut down on the amount of errands and tasks their employees have to do on the weekend, Zappos brings in outside service providers to help. Employees drop off their car keys or dry cleaning at the front desk in the morning and by the time they are done with work their clothes are clean and their cars have had an oil change. Employees pay a discounted rate for these services, making the cost to Zappos little to nothing.