Employees increasingly see financial benefits as a priority

Employees are increasingly seeking competitive financial benefits when considering whether to stay in their jobs, according to new research from Morgan Stanley. 

In producing its latest State of the Workplace report, the financial services giant found 69% of workers were paying more attention to their financial benefits in 2023, a rise of 9% compared to last year.

What’s more, a significant majority of HR leaders increasingly expect employees to pay more attention to their benefits (86%).

However, while understanding the need for financial incentives, the same leadership figures  aren’t confident they can provide adequate packages to strengthen employee retention during the ongoing period of economic uncertainty. 

Brian McDonald, Head of Morgan Stanley at Work, said: “Economic instability has led both employers and employees to tighten their belts – and ask a lot of their workplace benefits in the process. We're seeing momentum on both the employer and employee side to engage more intelligently with financial benefits as a ballast against uncertainty. To meet this moment, companies are going to have to get even more creative and efficient in leveraging holistic benefits offerings to attract, retain, and motivate their employees."

Morgan Stanley’s third State of the Workplace study involved surveying 1,000 employed adults and 600 HR executives in the US. 

Equity compensation becomes a key driver for employees

Morgan Stanley’s team of researchers found that, for the first time, employers said the most important benefit of equity compensation was reaching long-term investment goals (28%), up 4% on last year. This was followed by ‘providing an extra source of income’ (24%) and ‘giving a stake in the success of the company’ (22%). 

Meanwhile, more firms (72%) revealed they were offering some form of equity compensation benefits to some employees, while most workers (84%) said having a benefits plan that includes equity compensation and stock ownership was the most effective way to stay motivated and engaged.

Scott Whatley, Managing Director and Global Head of Equity Solutions at Morgan Stanley at Work, added: “In the decades of work we’ve done with clients, we have seen an evolution in how this benefit – once thought of as a one-time bonus – is now viewed more holistically within an employees’ overall finances as a key driver of long-term investing goals.

“As equity compensation continues to gain ground, this is a critical insight for employers to absorb, and help inform how they communicate, package and deliver equity compensation throughout their organisations.”

Read the full report: State of the Workplace III