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Why the buffet of employee benefits has exploded over the past 20 years

Protesters call for mandatory paid sick day policies ahead of a scheduled New Jersey Gov. Chris Christie fundraiser in 2015, at The Union League in Philadelphia. (Matt Rourke/AP Photo)

Student loan repayment. Lengthy parental leaveUnlimited vacation. Company-paid wedding expenses.

If it seems like the menu of employee benefits is turning into an ever more varied and sundry buffet of assorted perks, it is. The twentieth annual employee benefits survey by the Society for Human Resource Management, released Monday, now tracks nearly 350 fringe benefits offered to workers by their employees. New this year: Paid foster child leave, coverage for health care services provided by video, genetic testing coverage for diseases like cancer.

That number represents an exponential growth such extras tracked in the annual survey. Twenty years ago, it asked H.R. professionals about 60 perks. Ten years ago, it surveyed them on 219.

Evren Esen, director of workforce analytics for SHRM, says that 20 years ago, employers all had a similar group of benefits they offered employees -- things like health care, retirement, vacation and prescription drug coverage.

"Organizations weren't necessarily using benefits as a recruitment and retention tool," she says. What's changed, she says, is that "now benefits are so specific and so creative in order to get the talent that organizations want -- that's one way they differentiate themselves. That's why we've seen the huge increase in types of benefits."

In other words, the overall range of benefits offered to workers may be more varied and tailored than ever. Companies appear to be putting a little more money into benefits and bonuses rather than salaries as they try to attract talented employees without driving up fixed costs -- it's a lot easier to take away a perk than it is to cut an employee's base pay. This year's SHRM report shows a noticeable uptick in several kinds of bonuses over the past five years, especially spot bonuses, employee referral bonuses and sign-on bonuses.

Meanwhile, it cites data from the Bureau of Labor Statistics, which show that in 2015, 68.7 percent of payroll expenses for civilian workers went to salaries, leaving 31.3 percent for benefits. Esen says that in 1995, 71.4 percent of payroll went to salaries, leaving 28.6 percent for benefits.

Still, that shift is not dramatic. While the array of benefits may be getting bigger -- and about a third of companies said they have increased the number of new perks they offer -- the prevalence of those headline-grabbing niceties is still pretty rare.

Just four percent of the companies represented in SHRM's survey offer paid unlimited vacation leave. Only four percent offer student loan repayment. Just three percent cover egg freezing for non-medical reasons. And only 26 percent offer paid maternity leave and 21 percent paid paternity leave -- despite all the attention given to the vast expansions on time off for new parents at many tech firms and large companies.

One possible explanation of the results is that SHRM's sample of 3,490 respondents is weighted toward smaller companies, privately owned for-profit organizations and government agencies -- rather than the much larger publicly traded companies, particularly in the technology sector, that have recently been the most generous and creative with their benefits packages.

Still, nearly half of U.S. private sector workers are employed by small companies, with additional people in public-sector jobs, so the results help illustrate what employees outside of large publicly traded companies receive. In addition, many of those generous benefits are expensive to offer, Evren says. "Employers really have to know this is what my employees want," she said. "They have to see if it makes sense from a financial standpoint."

One benefit that did show a big jump over the past five years is stand-alone paid sick leave, which grew from 33 percent in 2012 to 41 percent this year. As more states and municipalities roll out paid sick leave requirements, Esen says, employers are getting ahead of the trend.

"We are seeing a movement, and we will continue to, in paid sick leave," she says. "It's preemptive -- they see this coming down more and more legally," she said, as well as be more competitive for employees who value their time off.

And what's changed the most over the past 20 years? The perk with the biggest decline in prevalence was credit unions, which were offered by 70 percent of respondents in 1996 and just 23 percent this year. The biggest increase? Telecommuting, unsurprisingly, which was offered by 20 percent of those surveyed in 1996 and grew to 60 percent this year. It may be hard to remember, but residential cable broadband was only introduced in 1996, and the iPhone wasn't released until more than a decade later.

Read also:

Wedding expenses and Tesla leases: The arms race in employee perks

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