When Saira Rahman decided to look for a new job, she had clear priorities. The money, of course, but also the benefits. Namely: those related to starting a family.
In her 30s and single, she wanted to make sure her job provided adequate parental leave and good health insurance coverage for treatment for her autoimmune disease.
She had one offer in hand and was still interviewing at a few companies when she put in her two-weeks notice at her job as an assistant vice president at Alpine Bank, in Denver, Colorado. She figured she’d take a few weeks to consider her options—briefly forgetting that, in a country where healthcare is tied to employment, such a break meant she’d lose insurance coverage in the middle of a pandemic.
When she realized it, she panicked. “The only thing going through my head was: what happens if I catch Covid?”
The offer she had, and liked, was from fintech firm HMBradley. Executives there offered to kick in health insurance coverage before her start date. The firm provides a 12-week parental leave. And Rahman asked to add egg freezing into the firm’s benefits, for all employees. The company agreed.
She knew it was an expensive request, she said, but she felt some duty to ask on behalf of others, as well as herself. “If you want to breed a 50/50 culture,” she said, “I think you have to have a female executive in a position of power that wants to advocate for other women.”
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While HMBradley was receptive, Rahman’s experience demonstrates how opaque corporate benefits often are, and what a frustrating task getting information can be for job applicants. Workers like Rahman learn of what competitors offer in interviews, through backchannels, or very rarely on the website of a firm that does publicize its benefits. So it’s difficult for prospective employees to compare their options across firms.
The pandemic forced US working policies to the fore, with employees examining sick leave and family leave policies and insurance coverage, all while attending video conferences with kids performing gymnastics in the background. Many corporations have risen to the challenge, adding or expanding policies for employees who fall ill or whose family members do, or for those with children with canceled school and camp plans. And now, amid increasing signs of a tightening labor market, these policies are all the more relevant.
Benefits have long been used by US employers as a tool for attracting and retaining talented people. In the private sector, benefits account for 30% of the average employee’s compensation, according to the Bureau of Labor Statistics. While financial services, one of the highest-paying industries in America, leads most other sectors in the quality of the benefits they offer, most firms remain wary of describing those benefits publicly.
This opacity gives companies the freedom to give some prospective employees more or better offerings than others. Which means workers like Rahman must take on the individual risk of asking for more.
For HMBradley, those conversations are a normal part of their hiring process, according to co-founder and CEO Zach Bruhnke. “We like to talk to candidates and our employees and find out what would make their lives better or easier,” he said. Maintaining insurance between jobs in a pandemic “honestly just seems like common sense,” he said. “We are big believers in the idea that if you take care of your people, they will take care of you.”
But they are an outlier. We reached out to 101 of the biggest, most influential asset managers, banks, industry groups and accounting firms in the U.S., requesting information on the employee benefits they offered. Of those, just 32 provided their policies. Those firms included some of the world’s biggest banks and asset managers, covering tens of thousands of U.S. workers.
Quartz members can see all the data for the 32 companies in The best employee benefits at the top US financial firms
Firms reported benefits including reimbursing the cost of adoption or surrogacy and tuition, and supporting gender reassignment. And, amid the pandemic, 19 reported amending leave policies to allow employees more time off and/or improved back-up caregiving provisions.
That firms are so reluctant to disclose their policies surprised Steven Eckhaus, who creates and advises on corporate benefits packages at McDermott Will & Emery LLP in New York.
“Most are happy to disclose their benefits if they’re good,” he said. “When companies are not disclosing, that may be a warning sign,” potentially indicating that the benefits are inconsistent or lacking.
For financial professionals who work at hedge funds or on Wall Street, Eckhaus says, benefits comprise a smaller part of total compensation, especially for those in the higher ranks, so they pay less attention. “What they’re concerned about is what seven-figure bonus they’re getting.”
Further down the food chain in financial services, benefits matter more. Reina Abrahamson, a member of worker group Committee for Better Banks, started a job at a Wells Fargo call center in Oregon about three years ago. She remembers hearing about her benefits during the hiring process, but with scant details, and now she wishes she’d learned more, “because they don’t offer the best.”
Abrahamson, who is transgender, began hormone therapy in April 2020; she’s now weighing whether to get gender confirmation surgery. Her insurance will cover 80% of the cost, which she estimates to be as high as $50,000—leaving her with a bill of $4,000.
“Even though that’s a good chunk [paid by insurance], it’s still not something that I can cover on my current salary,” said Abrahamson, who earns $17.67 per hour. “Depending on the cost, I may or may not go for it.”
Workers with paid time off for illness tend to be those already earning more: 92% of workers in the top quarter of earnings have access to some form of paid sick leave, compared with 31% of those in the lowest-earning tenth, BLS data show. While all 32 firms reported offering sick leave or paid time off that could be used for illness, five—Bridgewater, Point72 Asset Management, DE Shaw & Co, PwC, and Abrdn—said they offer unlimited sick days.
Some firms in our survey go further: Point72 has an on-site registered nurse practitioner; Point72 and Bridgewater cover 100% of medical premiums.
Financial services firms have helped to lead a recent wave of progress in policies on paid parental leave, with extra momentum in 2019, according to the nonprofit Paid Leave for the U.S. Citigroup and JPMorgan Chase were among those that expanded access.
For companies in the finance industry, the average parental leave is 8.3 weeks, plus eight weeks for recovery from childbirth, according to data from PL+US collected in 2019. Firms that disclosed policies in our survey did better: for new parents, nine of the 32 firms that reported policies said they offered fully paid leave of 16 weeks or more to both parents, regardless of gender; 26 offered 16 paid weeks or more to the primary caregiver or parent who gave birth. The maximum reported leave for primary caregivers was 26 week at Marshall Wace, and the maximum for both parents was 20 weeks, at Goldman Sachs Group and UBS.
Some firms have flexible transition periods for returning to work: Abrdn offers a transition period of up to 12 weeks on a part-time schedule at a full salary, and workers returning to work at PwC can work 60% of hours for full-time pay for an additional four weeks following their parental leave.
67% of private industry workers have access to employer-provided retirement benefits, according to BLS, and again high-earning workers are a lot more likely to have them: 90% of wage-earners in the highest decile, compared with 29% of those in the lowest.
All of the firms reported matching retirement contributions of employees; many match dollar-for-dollar up to a certain percentage or absolute total. Hamilton Lane and Capital Group stood out for contributing regardless of what the employees themselves put in, with Hamilton Lane depositing 3% of employee salary every year and Capital Group 15% of total annual compensation, including bonuses, commissions, and overtime.
Some of the differences in policies are a function of size or profitability—bigger, richer firms can better afford cushier benefits. Bigger organizations are also subject to more regulation; private-sector companies with fewer than 50 employees don’t have to provide unpaid family leave under the Family Medical Leave Act.
Investors care about employee benefits, too
Financial firms’ reluctance to share their benefits practices is discordant with the industry’s push into investing along environmental, social, and governance parameters. Clients have poured money into ESG strategies, boosting assets in “sustainable” funds to $2.3 trillion through the second quarter, according to data provider Morningstar Inc.
While that’s about 5% of assets in traditional funds, it’s an all-time high, and the trend is likely to continue: “Investors are asking for companies, particularly leadership, to step up and embrace this new stakeholder framework,” says Lorraine Wilson, director of investment products at JUST Capital, another data provider.
JUST’s research shows that embrace is rewarded in the stock market: shares of companies that score higher on its rankings for “workers issues” perform better. About one in four of the 890 companies JUST ranks report detailed parental leave policies and day-care services, and a report showed that those companies generated 2% more return on equity over five years through 2018.
That demonstrates “a reason to invest in your workers,” Wilson says, and companies “weren’t losing out by making that investment.”
To ESG investors like Liz Simmie, co-founder of Honeytree Investment Management in Toronto, companies provide good benefits “not because it’s nice to do—it’s about hiring and retention, about quality jobs, competitiveness in the labor market.” And that informs her view of companies as potential investments. “It’s really: what does this data tell us about the company in terms of its quality?”
The finance industry must lead on both providing employee benefits and being transparent about what they offer, she says, to demonstrate the importance and value of good governance and equitable treatment of employees: “We’re the ones selling this story.”