Perk Power

Benefits Breakdown

The survey findings reveal that entrepreneurial companies have to deal with complex issues when it comes to providing employees with such benefits as paid vacations, health plans, retirement plans and tuition reimbursement.

One of the biggest surprises of the survey has to do with policies regarding paid time off for full-time employees. Only half the firms surveyed offer paid vacations, and even fewer pay for holidays and religious observances, personal and sick days, family and medical leaves of absence, and bereavement leaves. Only one in four pays for maternity and paternity leave.

"I'm sure the reason is money," Doescher says. "But in today's job market, if you don't provide paid vacation time, you're going to have a hard time attracting employees."

The news that just 39 percent of the companies offer health-care benefits is less shocking. What is surprising is that this number has fallen from 46 percent in 1996. Maybe it's because some small firms forgo company-paid plans because of laws stating that health benefits offered to one employee must be offered to all, Doescher says. Other companies say they pay higher salaries to enable employees to purchase their own coverage, he adds.

DeLong's company takes the middle road, providing minimal health insurance coverage: The company pays 25 percent of the premium for a basic policy covering only the employee; additional coverage for family members comes out of employees' pockets. DeLong feels this approach works best for his company because it gives his employees what they really need. Several of his employees retired from IBM and are still covered by the health plans of their ex-employer. Others are covered by plans from a spouse's employer. Paying to cover these employees' families wouldn't be the best use of the company's resources, he says.

The trend in retirement benefits seems headed in the same direction. Nineteen percent of the firms surveyed offer retirement benefits, down from 28 percent in 1996.

Tuition reimbursement is one of the most popular benefits for employees at companies such as Stonyfield Farm Inc., a fast-growing 150-person yogurt company in Londonderry, New Hampshire. President and CEO Gary Hirshberg says this benefit was added after a study group of employees and managers identified tuition reimbursement as something they really wanted.

But only 15 percent of the other companies surveyed offer tuition reimbursement, probably due to financial constraints. "When you're running on a shoestring [budget]," says Sirinakis, "tuition reimbursement has to go by the wayside."

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This article was originally published in the July 1998 print edition of Entrepreneur with the headline: Perk Power.

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