A Comparison of Public- and Private-Sector Benefits Beyond Pensions and Health Care

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Public-sector workers know that they can generally count on more generous pensions and health coverage than if they worked for the private sector. But at a time of low unemployment, both kinds of employers are beefing up other benefits to recruit and retain workers. How do the two sectors compare on those?

Using reports from the Society for Human Resource Management, Governing compared 300 benefits offered by companies and governments (including state, local and federal employers).

In terms of professional development, general wellness and financial help, governments are the place to be. For instance, public employers are twice as likely to offer on-site gyms, credit counseling and on-site medical care. They’re also a third more likely to offer professional development or tuition assistance.

Here’s a sampling of benefits more often offered by governments:

 
BENEFIT    PUBLIC (%)    PRIVATE (%)
   On-site professional development    83    64
   Graduate educational assistance    62    45
   Employee assistance program    92    74
   On-site stress management program    25    9
   Smoking cessation program    61    37
   On-site medical clinic    21    5
   On-site fitness center    41    21
   Credit counseling    17    8
   Financial advice    41    25
 

But if you’re looking for perks like bonuses, free food or the ability to telecommute, you’re more likely to find it in the private sector. There, employers are three to four times more likely to offer bonuses, twice as likely to allow full-time telework, and four times more likely to offer free snacks in the office.

Here’s a sampling of benefits more often offered by private-sector companies:

 
BENEFIT    PUBLIC (%)    PRIVATE (%)
   Employee referral bonus    13    62
   Incentive bonus plan for nonexecutives    13    47
   Donations for charity participation    10    30
   Paid minibar snacks    3    15
   Casual dress code    32    56
   Telecommuting, full-time    10    26
   Telecommuting, part-time    24    38
   Free snacks    8    39
   Free coffee    46    87
 

Some good news for governments is that 87 percent of millennials labeled “professional or career growth and development opportunities” as important in a job, according to a 2016 Gallup poll.

Still, governments struggle in getting the word out on what they offer. 

“Governments don’t do a great job of talking about all of the attractive features that we have particularly vis-à-vis the private sector,” says Robert Lavigna, director of the Institute for Public Sector Employee Engagement at CPS HR Consulting. “These are benefits that are more common in the public sector that could be a huge benefit to attracting talented young people to government.”

Nancy Buonanno Grennan, the human resources director for Kitsap County in Washington, agrees. The county, which has to compete with nearby Seattle for employees, is currently marketing its tuition assistance and tuition advancement programs that can help people advance their education and careers while working. But until recently, “we were terrible at letting people know the benefits the county had to offer,” she says. “We just figured that people would want to work for us. Now we’ve recognized we have to go find people who aren’t looking for us and convince them to make a leap into the public sector.”

Governments are increasingly using benefits to attract workers, says Neville Kenning, a consultant focused on the public sector. Perhaps no other city has expanded its offerings — and publicized them — as much as Memphis, Tenn.

Starting in 2016, the city began assembling a package of new benefits based on a series of employee town hall meetings, which sent clear signals of what employees, and particularly young ones, wanted.

After the Great Recession, the city reduced traditional retiree benefits, eliminating most retiree health subsidies and moving to a retirement plan that was less financially risky for the city. Employees weren’t happy, and turnover escalated, particularly in the police department, which lost 180 police officers in 2015, the year after the reductions.

“We needed to enhance our benefits to recruit public safety employees and other new talent to the city of Memphis,” says Alex Smith, the city’s chief human resource officer.

Since the town hall meetings, the city now offers two on-site medical clinics, $50 a month in student loan debt assistance, a $2,000 referral bonus for police who move to Memphis from other cities, health reimbursement accounts for retirees younger than 65, tuition reimbursement and the opportunity to do paid volunteer work, to name a few.

Some of the Memphis benefits are rare in government and more common in companies, including the referral and relocation bonuses and paid volunteer time. Smith is making sure that employees and potential employees know all about the “total rewards” of working for the city by promoting them in brochures, radio spots and a new video.

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Barrett and Greene



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