Ducks In A Row: The Benefits Of Benefits
by Miki Saxon
When it comes to company success there is much talk about leading and influencing, visions and inspiration, but when the subject of benefits comes up then it’s all about the bottom line.
Did you know that no benefits (other than those negotiated by a union) are actually required by law for any worker, full or part-time?
So why should companies have benefits? Just think about how much better their bottom line would be without them. Wow!
Then think about how demotivated, unproductive and disinterested their employees would be. Double wow!
The smartest employers (AKA good leaders) offer all the benefits they’re able to offer to the people who work for them, even part-timers. Sure, they’re limited by financial consideration, but they do as much as they can.
- A startup CEO told me that he had insisted on good insurance coverage in spite of his investors’ gripes. Why? Because, he said, his people were more willing to put in 80 hour weeks when they didn’t have to worry about their families. Interestingly enough, his company also offered slightly below market pay and far more modest stock options and still filled their openings with top talent (this was during a boom period, too).
- Another small biz owner I know, with sales of less than $2 million, offers Aflac, exceptional working flexibility, including working from home, and just added a 401K, although many similar-sized companies just moan about how they can’t afford anything.
- My friend, who owns a tiny, neighborhood restaurant, gives her waiters their birthday off with pay—and has almost no turnover.
Part of the problem in large companies is that Wall Street penalizes companies that do take care of their people (Costco) and lauds those that use every trick to avoid spending that money (Wal-Mart).
But make no mistake—taking the best care possible of your people will yield a high return in the form of lower turnover, higher productivity and more creativity.
Your comments—priceless
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Image credit: ZedBee|Zoë Power on flickr
August 11th, 2009 at 6:12 am
Great post, totally concur. I have some still unpublished research where I measured some stuff that I thought would predict performance, and then I threw in some measures of attitudes about benefits because the employer was interested in it. Turns out most of the stuff I thought would predict performance did not, but the attitudes about benefits were strong predictors of performance in this sample. I am sold.
August 11th, 2009 at 9:14 am
Hi Bret, I’d love to see the research. I tell clients that benefits are like sales commissions—structured correctly they pay for themselves.
August 12th, 2009 at 4:28 am
Human capital is now, and will always be the most productive, creative and valuable asset a company can posess. Attrition, turnover, discontent, and low morale can devastate the P&L statement. It is the human capital that provides innovation, best practices, and the drive and creativity necessary to succeed in today’s economic conditions. Those who recognize this are already experiencing the benefit, those who don’t or choose not to, are or will experience the downside of understanding the value of human capital.
August 12th, 2009 at 5:01 am
Still trying to get it published! Thanks, Bret
August 12th, 2009 at 9:13 am
Bret, Be sure to let us know when/where it is published.
August 12th, 2009 at 9:21 am
Hi Martin, although I agree with what you say, I don’t agree with how you say it.
Yes, it’s in current usage, but I find ‘human capital’ one of the most offensive terms ever coined by the HR world.
It is PEOPLE who do all the things you mention; human beings in all their messy, chaotic glory.
I’ve never met a person who appreciated being called human capital, let alone thought of themselves as such.
December 16th, 2014 at 1:16 am
[…] written many times describing the value of benefits and their effects on worker […]
February 9th, 2016 at 11:52 am
[…] Business counters that idea by pointing to all the costs that didn’t exist in 1914 as justification for relentlessly cutting wages and benefits. […]