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A few months ago, an HR director I work with showed me her company’s new employee benefits package. It was impressive: gym memberships, mental health support, flexible work arrangements, free lunches on Fridays, professional development stipends. She had fought hard for this budget.
“We launched it six months ago,” she said. “Engagement scores went up immediately. But now…” She pulled up the data. The scores had returned almost exactly to where they started.
I’ve seen this pattern so many times that I have a name for it: the employer branding plateau. Companies invest significantly in employee perks and benefits, see a temporary spike in engagement, then watch helplessly as everything regresses to the mean.
What most HR professionals don’t realize is that they’re not facing a benefits problem. They’re facing a psychological phenomenon that’s been documented for over fifty years, and it explains why the perks arms race is fundamentally unwinnable.
The Hedonic Treadmill: Why Benefits Stop Feeling Like Benefits
In 1971, psychologists Philip Brickman and Donald Campbell published a paper that would
reshape our understanding of human happiness. They discovered that people tend to return
to a relatively stable baseline level of happiness regardless of what happens to them,
positive or negative. They called this the “hedonic treadmill.”
The researchers studied lottery winners and found something counterintuitive: within
months of their windfall, most winners reported happiness levels roughly equivalent to
before they won. The initial euphoria faded as their expectations adjusted to their new circumstances.
Here’s why this matters for employer branding: the same adaptation happens with
workplace perks. As soon as staff start to expect these benefits, they cease to be
motivators. The free lunch that delighted employees in January is simply “what we do” by
June. The gym membership that felt like a gift becomes an expectation.
This isn’t employee ingratitude. It’s neuroscience. And it’s costing organizations billions in
misdirected investment.
The Current State of Employee Engagement (It's Worse Than You Think)
Let’s look at the numbers, because they’re sobering.
According to Gallup’s 2024 State of the Global Workplace report, employee engagement has hit concerning lows. Only 23% of employees globally are truly engaged in their work. In Europe, that figure drops to just 13%. The ratio of engaged to actively disengaged employees fell to 1.8:1 in 2024, down from 2.1:1 the previous year.
The economic impact is staggering: Gallup estimates that low employee engagement costs the global economy approximately $8.9 trillion, roughly 9% of global GDP. That’s not a typo. Trillion.
And here’s the kicker: this decline happened despite unprecedented investment in employee perks and wellness programs. Companies have poured resources into ping-pong tables, nap pods, unlimited PTO, and wellness stipends. Yet engagement continues to fall.
The data tells us something uncomfortable: we’ve been solving the wrong problem.
Why the Perks Arms Race Is Unwinnable
I work across hospitality, healthcare, and professional services, industries with vastly different cultures but identical challenges. And I’ve noticed a pattern in how organizations approach engagement:
Phase 1: Identify the gap. Employee surveys reveal dissatisfaction. Leadership commits to “doing something.”
Phase 2: Implement perks. New benefits are announced with fanfare. Employees feel valued. Engagement spikes.
Phase 3: Adaptation sets in. Within 3-6 months, the new perks become the new normal. Engagement returns to baseline.
Phase 4: Escalate or give up. Organizations either add more perks (starting the cycle again) or conclude that “employees just aren’t grateful.”
This pattern is predictable because it’s rooted in psychology, not organizational dynamics. As one expert put it: “The problem with solely providing benefits and environmental perks as a means of engagement is that people get used to them very quickly.”
But there’s something worse happening. When employees become accustomed to constant perks, they begin to see themselves as consumers of the workplace rather than contributors to it. Instead of asking “What can I give?”, the mindset becomes “What do I get?”
This transactional relationship is the opposite of engagement. And it’s exactly what the perks approach creates.
What the Research Actually Shows Works
If perks don’t work, what does? The research points to something both simpler and more challenging: intrinsic motivation.
Gallup found that 70% of the variance in employee engagement is attributable to the manager. Not the benefits package. Not the office design. The relationship with their direct manager.
In best-practice organizations, engagement looks radically different. Gallup reports that approximately 75% of managers and 70% of non-managers are engaged in these high-performing workplaces, compared to global averages of around 23%. The difference isn’t that these organizations have better perks. It’s that they’ve structured work around what humans actually need.
What are those needs? Researchers have identified several factors that drive sustained engagement:
Clarity of expectations. Employees need to know what’s expected of them and how their work connects to meaningful outcomes.
Opportunity for mastery. People want to do what they do best and develop their capabilities over time.
Autonomy and ownership. Self-directed work creates motivation that external rewards cannot replicate.
Purpose and meaning. Employees who understand why their work matters engage differently than those who only understand what they do.
Genuine recognition. Not programmatic rewards, but authentic acknowledgment of contribution.
Relationship quality. Connection with colleagues and managers predicts engagement far more than benefits.
Notice what’s missing from this list: perks, amenities, and transactional benefits. These things matter for attraction and basic satisfaction. But they cannot create engagement because engagement is fundamentally relational and intrinsic.
The Employer Branding Implication
This research has profound implications for employer branding strategy.
If you’re building your employer brand around benefits and perks, you’re building on sand. Every competitor can match your offerings. And even if they don’t, hedonic adaptation ensures your employees will stop noticing what you provide.
But if you build your employer brand around transformation, what employees become by working with you, you create differentiation that resists both competition and adaptation.
Here’s the distinction:
Transactional employer brand: “We offer competitive salary, flexible work, and comprehensive benefits.”
Transformational employer brand: “You’ll grow into a leader who can navigate complexity with confidence.”
The first statement describes what you give. The second describes who employees become. The first triggers hedonic adaptation. The second creates meaning that compounds over time.
The Authenticity Requirement
I need to be direct about something: this approach only works if it’s genuine.
Employees today are extraordinarily sensitive to performative employer branding. They have access to Glassdoor, they talk to former employees, they watch how leadership behaves in crises. If your transformation promise doesn’t match reality, the gap will destroy trust faster than any benefit program can build it.
One expert captured this perfectly: “If there’s a mismatch between what companies say and what they do, employees will walk without hesitation. Transparency is the new currency of trust.”
This means that building a transformation-focused employer brand requires actually investing in employee transformation. It requires managers who genuinely develop their people. It requires career paths that are real, not theoretical.
The good news? Organizations that commit to this approach gain compounding advantages. Authentic transformation attracts people who want to grow, who are intrinsically motivated, who see work as more than a transaction. These employees are more engaged, more productive, and more likely to stay, creating a virtuous cycle that benefits the entire organization.
The hedonic treadmill explains why your perks stop working. But it also points toward what actually creates sustained engagement: meaning, growth, mastery, autonomy, and genuine human connection.
Building employer branding around transformation rather than transaction isn’t just psychologically sound, it’s strategically defensible. Competitors can match your benefits package. They cannot easily replicate a culture that genuinely transforms people.
For HR leaders and employer brand strategists, this requires a fundamental shift. Stop asking “What can we give employees?” Start asking “Who can they become?”
That question leads somewhere the hedonic treadmill can’t follow.
Your Employer Branding Perks Are Either Creating Real Commitment οr Buying Short-Term Noise. Which Is It?
If your employer brand is basically a perks menu, you’re stuck in an expensive loop: announce → spike → normalize → repeat. That’s the hedonic treadmill in action, and it’s exactly why “more benefits” stops moving engagement, retention, or performance long-term.
Build an employer brand that doesn’t expire: one that’s rooted in real transformation (growth, mastery, autonomy, purpose) and backed by managers who actually drive engagement, because that’s where the biggest leverage is.
Turn your ad mix from “let’s test and hope” into a predictable, profitable performance engine.
Afroditi Arampatzi
Marketeer
Hi, I’m Afroditi!
An experienced marketer with a passion for driving impactful projects and delivering strategic solutions.
With over 15 years of hands-on experience in project management, I specialize in advertising, data analysis, strategic planning, and team leadership.
