Everyone works for a paycheck,  but employees are looking for  
Everyone works for a paycheck,  but employees are looking for  

more than just a deposit into their  bank accounts at the end of every month.
more than just a deposit into their  bank accounts at the end of every month.

Offering a good benefits package, or  in other words, indirect compensation,  
Offering a good benefits package, or  in other words, indirect compensation,  

is crucial to attracting and retaining the  right talent, especially as the war for talent  
is crucial to attracting and retaining the  right talent, especially as the war for talent  

isn't ending any time soon. Consider  this: 73% of respondents in a Prudential  
isn't ending any time soon. Consider  this: 73% of respondents in a Prudential  

survey identify benefit programs as  a big reason for staying at a job.
survey identify benefit programs as  a big reason for staying at a job.

Let’s take a good look at  why indirect compensation  
Let’s take a good look at  why indirect compensation  

matters and what are some  examples you can learn from.
matters and what are some  examples you can learn from.

*MUSIC*
*MUSIC*

Hi, Neelie here. Welcome to another  episode of Learning Bites. In today’s  
Hi, Neelie here. Welcome to another  episode of Learning Bites. In today’s  

video, we’ll talk about what indirect  compensation is, why it’s important,  
video, we’ll talk about what indirect  compensation is, why it’s important,  

and how it’s different from direct  compensation, as well as some examples.
and how it’s different from direct  compensation, as well as some examples.

Before we start, don’t forget to like our video,  
Before we start, don’t forget to like our video,  

click the notification bell, and subscribe to  our channel! And if you want to know more about  
click the notification bell, and subscribe to  our channel! And if you want to know more about  

key Compensation and Benefits  metrics you should be tracking,  
key Compensation and Benefits  metrics you should be tracking,  

be sure to follow the link in the description  to download our full guide on this topic.
be sure to follow the link in the description  to download our full guide on this topic.

Now let’s talk about indirect compensation.
Now let’s talk about indirect compensation.

Simply put, indirect compensation is any  benefit you offer to your employees that  
Simply put, indirect compensation is any  benefit you offer to your employees that  

doesn’t come in the form of cash. Common types  of indirect compensation include insurance,  
doesn’t come in the form of cash. Common types  of indirect compensation include insurance,  

gadgets, or health and wellness programs.
gadgets, or health and wellness programs.

The main difference between direct  and indirect compensation lies in  
The main difference between direct  and indirect compensation lies in  

their quantifiability or lack thereof. It’s  fairly easy to give job candidates facts,  
their quantifiability or lack thereof. It’s  fairly easy to give job candidates facts,  

figures, and actual dollar amounts when it  comes to future salaries or the company’s  
figures, and actual dollar amounts when it  comes to future salaries or the company’s  

contribution to the pension scheme. It is much  harder, however, to quantify the little things  
contribution to the pension scheme. It is much  harder, however, to quantify the little things  

that can make a huge difference, such as  health insurance or free childcare service.
that can make a huge difference, such as  health insurance or free childcare service.

Here are two reasons why  indirect compensation matters: 
Here are two reasons why  indirect compensation matters: 

Compliance: Even if you tried to, you probably  won’t be able to take a job with no indirect  
Compliance: Even if you tried to, you probably  won’t be able to take a job with no indirect  

compensation, for the simple fact that  it’s illegal. Many countries have laws  
compensation, for the simple fact that  it’s illegal. Many countries have laws  

that require every job to have some  indirect types of employee benefits,  
that require every job to have some  indirect types of employee benefits,  

such as health insurance or paid vacation time. 
such as health insurance or paid vacation time. 

Talent acquisition and retention: Indirect  compensation, especially the non-mandatory ones,  
Talent acquisition and retention: Indirect  compensation, especially the non-mandatory ones,  

is an incredibly useful tool to attract  talent, build loyalty, boost retention,  
is an incredibly useful tool to attract  talent, build loyalty, boost retention,  

and encourage productivity. Silicon  Valley-style perks like laundry services,  
and encourage productivity. Silicon  Valley-style perks like laundry services,  

concerts, and massages might seem over the top,  but they can make a world of difference if your  
concerts, and massages might seem over the top,  but they can make a world of difference if your  

candidates are torn between two job offers. Now that we’ve established what indirect  
candidates are torn between two job offers. Now that we’ve established what indirect  

compensation is and why it matters, let’s look  at four examples of indirect compensation.
compensation is and why it matters, let’s look  at four examples of indirect compensation.

Insurance
Insurance

Your company may consider offering  healthcare, life, disability, legal  
Your company may consider offering  healthcare, life, disability, legal  

or other types of insurance. Health insurance, in  particular, is an extremely attractive benefit,  
or other types of insurance. Health insurance, in  particular, is an extremely attractive benefit,  

especially if you’re based in countries  where the cost of healthcare is expensive.  
especially if you’re based in countries  where the cost of healthcare is expensive.  

59% of respondents in a PwC survey  identify financial issues as the top  
59% of respondents in a PwC survey  identify financial issues as the top  

cause of their stress, while another  10% point towards health problems.
cause of their stress, while another  10% point towards health problems.

Offering health or life insurance gives your  employees security and stability. In the wake  
Offering health or life insurance gives your  employees security and stability. In the wake  

of the COVID-19 pandemic, everyone is now  keenly aware of how rapidly their health and  
of the COVID-19 pandemic, everyone is now  keenly aware of how rapidly their health and  

financial situation can change, making insurance  an even more attractive benefit. With up to 40%  
financial situation can change, making insurance  an even more attractive benefit. With up to 40%  

of the global workforce considering  leaving their employers this year,  
of the global workforce considering  leaving their employers this year,  

offering quality insurance can make the difference  
offering quality insurance can make the difference  

between attracting qualified candidates  and struggling to keep your current staff.
between attracting qualified candidates  and struggling to keep your current staff.

Paid Time Off
Paid Time Off

Many countries have strict laws around  the minimum amount of paid time off  
Many countries have strict laws around  the minimum amount of paid time off  

companies have to offer their employees  and how employees can use sick time. But  
companies have to offer their employees  and how employees can use sick time. But  

employees almost always  appreciate more vacation time.
employees almost always  appreciate more vacation time.

This has become especially important following  the pandemic. Research from Prudential shows  
This has become especially important following  the pandemic. Research from Prudential shows  

that workers now place significantly more value  on paid leave as a benefit, from 31% during the  
that workers now place significantly more value  on paid leave as a benefit, from 31% during the  

first wave of the pandemic to 52% during the  second wave. Hubspot, for example, made July  
first wave of the pandemic to 52% during the  second wave. Hubspot, for example, made July  

5th to July 9th their global week of rest in  2021, where all of their employees are off work.
5th to July 9th their global week of rest in  2021, where all of their employees are off work.

Wellness programs
Wellness programs

The pandemic hasn't just put our physical  health at risk. New research from Total  
The pandemic hasn't just put our physical  health at risk. New research from Total  

Brain shows that the risk of PTSD in US  workers is now 50% higher than pre-pandemic,  
Brain shows that the risk of PTSD in US  workers is now 50% higher than pre-pandemic,  

while anxiety level among workers aged 20-39  has risen by 29% between July and August 2021.
while anxiety level among workers aged 20-39  has risen by 29% between July and August 2021.

So it's no surprise that many companies are  offering wellness benefits. If you want to  
So it's no surprise that many companies are  offering wellness benefits. If you want to  

add it to your benefits package, you could  consider offering discounted or even free  
add it to your benefits package, you could  consider offering discounted or even free  

counseling service, access to mindfulness apps,  
counseling service, access to mindfulness apps,  

or a gym membership. You can also take a  page out of Silicon Valley start-ups’ book  
or a gym membership. You can also take a  page out of Silicon Valley start-ups’ book  

and consider less traditional mental health  services like spa vouchers or pet therapy.
and consider less traditional mental health  services like spa vouchers or pet therapy.

Childcare
Childcare

Daycare is expensive.  
Daycare is expensive.  

Companies that can offer free or subsidized  daycare boost the disposable income level of  
Companies that can offer free or subsidized  daycare boost the disposable income level of  

their employees with young children. But that  isn't the only benefit this benefit offers.
their employees with young children. But that  isn't the only benefit this benefit offers.

According to McKinsey, the added burdens at  work and at home since the COVID-19 crisis  
According to McKinsey, the added burdens at  work and at home since the COVID-19 crisis  

began have pushed roughly 33 percent of  working mothers to consider downshifting  
began have pushed roughly 33 percent of  working mothers to consider downshifting  

their careers or leaving their jobs altogether.  The same report reveals that nearly a quarter  
their careers or leaving their jobs altogether.  The same report reveals that nearly a quarter  

of mothers said they worried that their work  performance was being judged negatively because  
of mothers said they worried that their work  performance was being judged negatively because  

of their caregiving responsibilities,  compared with 11 percent of fathers.
of their caregiving responsibilities,  compared with 11 percent of fathers.

In other words, offering free  or subsidized childcare is a  
In other words, offering free  or subsidized childcare is a  

way to make your organization more  diverse, inclusive, and equitable,  
way to make your organization more  diverse, inclusive, and equitable,  

and to help working mothers -- and all employees  with young children -- feel like they belong.
and to help working mothers -- and all employees  with young children -- feel like they belong.

This is just a handful of the many types  of indirect compensation you can offer.  
This is just a handful of the many types  of indirect compensation you can offer.  

When it comes to choosing which benefits to offer,  
When it comes to choosing which benefits to offer,  

the key is to find out what your employees  value and keep in line with your competitors.
the key is to find out what your employees  value and keep in line with your competitors.

Do you have tips on building a killer indirect  compensation package? Share them in the comment  
Do you have tips on building a killer indirect  compensation package? Share them in the comment  

section below and, as always, don’t forget to  like our video, hit the notification button,  
section below and, as always, don’t forget to  like our video, hit the notification button,  

and subscribe to your channel.
and subscribe to your channel.

See you next time!
See you next time!