This is the myth: Small businesses cannot afford to offer
benefits, so they don't. Swallow that myth, and your business
may bolster its bottom line in the short run. But that same
penny-wise philosophy may strangle your business's chance for
long-term prosperity. "There are certain benefits good
employees feel they must have," says Ray Silverstein, founder
of PRO, President's Resource Organization, a Chicago-based
small-business advisory network.
"Everyone who interviews for a job today wants to know what
benefits are offered," adds Henry Moyer, a partner in
Hirschfeld, Stern, Moyer & Ross, a benefits consulting firm in
New York City. Heading the list of must-have benefits is medical
insurance, but many job applicants also demand a retirement plan,
disability insurance and more. Tell these applicants no benefits
are offered, and, often, top-flight candidates will head for the
door. "Without benefits," says Robert J. Kaufman, an
Atlanta business litigation attorney, "you probably won't
attract good people."
But there's another, shiny side to this coin: Offer the
right benefits, and your business may just jump-start its
growth-and fast-track companies from Starbucks to Tom's of
Maine know just how much velocity a creative benefits package can
add to a business's growth.
Content Continues Below
"Give employees the benefits they value, and they will be
more satisfied, miss fewer workdays, be less likely to quit, and
have a higher commitment to meeting the company's goals,"
says Joe Lineberry, a senior vice president at Aon Consulting, a
Winston-Salem, North Carolina, human resources consulting firm that
recently surveyed some 1,000 employees nationwide on what benefits
programs mean to them. "The research shows that when employees
feel their benefits needs are satisfied, they're more
productive."
As a case in point, consider London Temporary Services, a
35-employee business recently cited by Los Angeles County for its
family-friendly benefits-including a medical plan, vacation time,
nine annual sick days and the unconventional extra benefit of two
half-days off per month. Why give employees that time off?
"They need it to take care of personal matters. Many use it
for doctors' appointments for themselves or their
children," says co-owner Ileene Bernard, who has offered this
benefit since 1981. "Of course it costs us money to give this
time off. But we believe we get it back in greater productivity and
reduced turnover."
Another example is Skokie, Illinois, gasket-maker Fel-Pro, whose
employees have free use of a 220-acre recreational facility with
swimming pools. The company also sponsors a day-care center next
door to its manufacturing plant and provides a thorough health-care
plan as well. Founded in 1918, Fel-Pro has followed the same
generous approach to its employees from the start, and that
philosophy has helped it grow into a highly profitable,
2,000-employee company. "The better you treat employees, the
more they can concentrate on doing their jobs," says Scott
Mies, Fel-Pro's director of work-life benefits. "Treat
employees well, and it comes back to you."
At Seattle-based Starbucks, meteoric growth has also been fueled
at least in part by a benefits policy that provides medical
coverage and stock options to employees, including the part-timers
who make up two-thirds of the company's work force. These
benefits-plus paid vacations, a retirement plan and a "coffee
benefit" that gives employees a free pound of beans
weekly-have helped keep Starbucks' employee turnover at rates
well below the norm, says company vice president of human resources
services Bradley Honeycutt. "We've had wonderful success
attracting and retaining good employees," he adds. "Many
employees come for the benefits-and stay for them. We believe our
benefits have helped us grow."
But you don't have to be a big company to meet
employees' benefits needs. This is amply proven
by Tom's of Maine, a 72-employee company in Kennebunk, Maine,
that makes toothpaste and related personal-care products. Tom's
employees not only get health insurance and retirement plans, but
new parents can take up to four paid weeks of leave, and all
employees are encouraged to take up to 5 percent of their paid work
time and invest it in volunteering for a local community group.
"What we give to our people, we get back from employees who
are refreshed and ready to work," says company president and
co-founder Tom Chappell.
These small businesses are not alone. A 1994 survey by the U.S.
Bureau of Labor Statistics found that in companies with fewer than
100 employees, two-thirds of workers participated in a company
health insurance plan, 88 percent had paid vacations, 61 percent
participated in employer-provided life insurance plans, and 42
percent participated in retirement plans.
That sounds about right to Moyer, whose company specializes in
developing benefits packages for small businesses. "Our office
is handling about 150 group programs right now," says Moyer.
"Most have the same basic elements-group life, medical,
dental, long- and short-term disability, and possibly a 401(k)
[retirement] plan. In most industries, it's now necessary to
offer those benefits to attract qualified employees."
Page 1 |
2 |
3 |
4 |
5 