The Most Important Employee Benefit

I started writing this blog back in the fall of 2010 -- about 7 years ago. How? Why?

One day, I was feeling really unhappy and I thought that writing would be a good way to take my mind off of my unhappiness. It turned out that it was. And, while I've been at it, nearly 500 posts and 200,000 hits later, I think I can say that there have been at least a few times that I have imparted some wisdom and some knowledge to at least a few people.

Along the way, there have been some side benefits as well. I've made a few LinkedIn contacts, gotten some Twitter followers, and even developed some business from my blogging. But, the biggest benefit of all has come every day.

What's that? Since the day that I made my first post, not a single day has gone by without at least one person asking me what is the single most important benefit to provide to employees.

That's pretty cool, isn't it? Actually, it would be if it were true. But, the fact is that I don't think that anyone has ever asked me that question. However, because I write this blog, I get to address that question now.

As I said, back in the fall of 2010, I was pretty unhappy at work. Before then, I had worked for a firm that I thought was great. We were creative. We were thinkers. We were innovators. We worked together. And, then we were sold. But, in the new firm, a lot of that remained -- not all of it, but a lot of it to the extent that we could figure out how to fit that culture in. And, then we were sold again.

And, it all went away. Every last drop of it went away, at least for me it did and based on conversations and behaviors, I feel pretty certain that many of my long-time colleagues felt the same way.

We'd lost our best benefit. And, that benefit could have been provided to us at no cost. That's sad, isn't it?

In fact, not only could that benefit have been provided to us at no cost, it would have produced large amounts of additional revenue for our employer or for any employer that chose to provide it to us.

If my cryptic ways have confused you here, you could be wondering. What benefit has no cost, but provides revenue to the employer providing it? It's not your health plan. It's not a 401(k) or a pension. It's not even vacation time or flex hours. But, as the way we work has moved from a 1980s environment when I entered this profession to a 2017 environment, this benefit has become even more important.

It causes people who receive it to work harder, to work smarter, and to work longer hours. It causes them to collaborate more. It causes them to give that extra little bit. It causes them to embrace the company brand even if they can't identify exactly what that brand is. And, it's far more important in 2017 than it was in 1985.

I think back to my work world in 1985. I arrived early. I could get breakfast in the office. I ate lunch with my colleagues. My employer provided that lunch. After lunch, we would all walk around the campus. Yes, it was a ritual and we all looked forward to those 5 or 10 minutes. And, then we would all go back to work and work hard.

Today, in 2017, those opportunities are largely gone. Many people don't work in the company office. They often work from home. Nobody provides them breakfast or lunch. They don't eat with their colleagues and they certainly don't walk with their colleagues. In many cases, other than via email, maybe telephone, and perhaps instant messaging and social media, they don't even know their colleagues.

That all makes one benefit harder to provide, but more important than ever.

Okay, for all those of you (maybe there are two or three who have gotten this far, but haven't figured out where I am going), that most important employee benefit is engagement. Yes, it's free to provide and, in fact, it's quite costly to not provide. But especially in 2017, it's not so easy.

How do we engage our employees in 2017? We have to make sure that they have interesting work. We have to make sure that they have a future. We have to take an interest in them. We have to show them a path forward. In short, we have to talk to them. And, far more important, we have to listen to them.

Listening to them doesn't mean that we do everything that they ask, but it does mean that we should think about what they say. The best idea may come from the recent college graduate who (paraphrasing the late Robert F. Kennedy) may choose not to ask why, but to ask why not. The solution may come from the analyst who is not burdened by rules that she hasn't learned yet, but finds an answer that we discover fits within those rules.

So, why am I writing about this now? This morning, I had two reasons. One is that I am very pleased to be employed by a firm called October Three that does seem to do a good job of engaging its employees. I find that I am working harder and I am working pretty intelligently. And, our employees from bottom to top are finding solutions for our clients that are creative and unique.

The second one is that next week, I will have the honor of becoming President of the Conference of Consulting Actuaries. The pay will be low (zero) and the hours will be longer than you might imagine, but if we get it right, the rewards will be significant. As the head of a membership organization that is voluntary for likely every one of its members, I want to engage that membership. In a perfect world, I'd like for every one of those members to feel like this is their organization. I want them to be part of the organization and to seek more and more ways to be part of it because I want them to be fully engaged.

Hopefully, I'll remember to practice what I preach.

No Layoffs ... Ever!

15 of the 100 Top Companies to work for according to Fortune Magazine have never had a layoff. Never! How do they do it? How can they possibly stay in business?

You can read the whole article here: http://money.cnn.com/galleries/2011/pf/jobs/1101/gallery.no_layoffs.fortune/index.html , but if you'd rather get just some tidbits and commentary, read on.

• SAS instituted hiring freezes in all but growth positions to save money. Hmm! Lots of other companies instituted hiring freezes, period.
• Wegman's Foods has never had a layoff even when they have closed a store. Instead, it has kept the employees and retrained them for other positions. Management says that they would rather retain trained staff than have to invest in new hires later.
• Nugget Market offered more hours rather than hiring additional associates during the recession. They promote from within. Now, there's a concept.
• At Scottrade, the CEO says, "Scottrade is committed to sharing its profits with associates and, of course, keeping them employed and providing opportunities for advancement.
• Stew Leonard's finds work internally for employees who are no longer needed, even if it is as offbeat as painting old machinery so that it will look better. Management cites the workforce as having come up with many of the ideas for cost containment.
• The Container Store faced a difficult business decision where the solution for most companies would have been layoffs. According to CEO Kip Tindell: "While conventional wisdom may tell us downsizing automatically drives a company's stock price higher and increases productivity, it actually doesn't. Layoffs take a huge lasting toll on morale and productivity in the workplace. Laying off people is not the best way, it's the easy [emphasis added] way."

There are almost ten more stories about these companies. All are successful. All keep their employees happy. And, none have done layoffs. EVER!

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Some Companies Out There Really Care

Each year, The Principal highlights it's "10 Best Companies". You can read the report from Principal here: http://www.principal.com/theprincipal10best/documents/2010bpg.pdf

The companies that make this list typically have low turnover and high loyalty among their employees. These are employees who will go out of their way for their employers because their employers have shown that they care. This year, the Top 10 are in alphabetical order:

• American Immigration Lawyers Association in Washington, DC
• The Bolles School in Jacksonville, FL
• Clif Bar & Company in Berkeley, CA
• Davidson Technologies, Inc. in Huntsville, AL
• The Delp Company in Maumee, OH
• Farmers Mutual Insurance Company of Nebraska in Lincoln, NE
• Franklin International in Columbus, OH
• The Graham Company in Philadelphia, PA
• Red River Credit Union in Texarkana, TX
• RLI in Peoria, IL

Why are these companies so wonderful? Here's a capsule of some of their ideas.

• AILA focuses on bigger benefits in lieu of bigger pay to lure attorneys away from higher-paying for-profit law firms.
• The Bolles School focuses on continuous communication with its employees (mostly teachers).  During open enrollment, they held 8 open meetings on 4 campuses over 3 days. They continue to educate their employees throughout the year about their benefits. As a result, they boast these statistics:
• Open enrollment meeting attendance: 90%
• 401(k) plan participation: 90%
• Average 401(k) deferral rate among those who are participating: 10% of pay
• Voluntary turnover rate: 2%
• Clif Bar put in a multi-faceted wellness program because they thought it was the right thing to do. Later on, they learned it was saving them money. Here aree some key components:
• Contests and incentives for wellness activities
• Nutrition counseling
• Commuter bicycle allowance
• Subsidized organic lunches
• On-site gym with free personal training, class instructors and subsidized massages
• 30 minutes gym time for each employee each work day
• Davidson Technologies has kept its benefits consistent and very rich even during the down economy. Highlights include 10% of pay profit sharing and fully-paid medical.for employees and dependents. They understand that the medical costs have been a substantial hit, but they are of the belief that increased productivity from happy, secure employees more than makes up for it. In other words, they are looking at results, not counting beans.
• The Delp Company has true flexible compensation. They decide how much the rewards package for each employee should be and then tailor the package to them. So, an employee who needs health care benefits gets them, but one who doesn't need them (spousal coverage, for example) would have those dollars allocated elsewhere.
• Farmers Mutual Insurance uses its benefits program to promote tenure with the organization. They have kept their defined benefit plan and have been rewarded with low turnover.
• Franklin International has a flexible education benefit plan. It varies depending upon age and needs from a tuition reimbursement plan to a matching 529 plan to a textbook reimbursement plan depending on needs. They also offer phased retirement with full medical and dental benefits.
• The Graham Company put in a high-deductible health plan with an HSA that saves both the company and its employees money. Graham saves through the plan design. The employees save because Graham funds the entire deductible and family coverage through its savings.
• Red River Credit Union boasts a 3.7% turnover rate. They say their benefits are very responsible. They pay more than 95% of medical costs, have a 401(k) plan and profit sharing plan, and just last year began offering full-time benefits to employees working 30 hours per week.
• RLI is different from most companies these days in that it links benefits to profitability. Employees receive an automatic 3% employer contribution to the 401(k), but depending on profitability, the company may contribute up to an additional 15% of pay to the 401(k) and ESOP.

So, there you have it, some old ideas and some new ideas, but these are Principal's 10 Best for 2010.