It used to be insignificant, says Humphrey, a fourth generation owner of Sills Motor Sales. Back in the 1960s and 70s in this business, you could run the business and still have lots of fun. It didnt take business acumen to be successful and keep your doors open. It was enthusiasts running an enthusiasts crowd and, oh yeah, by the way, you happened to make a lot of money.
All that changed in the late 1970s and early 80s, she says.
The business got to be extremely difficult. There was a wash-out of dealers because those that were enthusiastic but had no business skills were just along for the ride.
It was time, Humphrey recalls, when Sills did not offer benefits and had no standard policies in place.
But in the 80s, everything got more sophisticated, she says. I think its just a reflection of society in general. All of a sudden, people got to be keenly aware that theres more to life than (so many) dollars-per-hour.
Such was the shift within companies, when employees began to stand up and demand more than money. Since then, business owners have examined and in some cases, implemented total benefits package. Today, they also need to make sure their employees know about everything that is available to them.
You can lose people, not just because of pay but because of the other conditions of employment, which include benefits, explains Laura Sullivan, director of HR support services at the Employers Resource Council and a Certified Employee Benefits Specialist. There are certain things in benefits packages that may be more alluring to people.
One common mistake employers make is not explaining the benefits package thoroughly enough. Workers are usually familiar with conventional health, dental, life and disability insurance, but other benefits are less clear. On average, benefits account for 27 to 30 percent of an employees total compensation.
Thats why its so important to give them a statement so they see that, Sullivan says. I totally believe in benefit statements or total compensation statements. If somebody is being lured away, they will need that information to make a better choice. If they dont realize the value of the whole package that you provide to them, they could jump ship without making a very good decision.
This also is important when youre looking to hire. Whether a potential employee goes to work for you or for your competitor might be decided by how well you explain your flexible spending account and retirement programs. Employees need to understand the impact these can have on their salary and their taxes.
Its very, very important that they understand all their choices so that they can make the right choice for themselves, Sullivan says. Its like an employee handbook. If you have it and you dont let anybody know what the rules are you want them to follow, youve probably wasted a lot of time and money.
Some benefits are more obvious than others. Casual days, flex time and cash bonuses might be pretty cut and dried, but how many of your employees remember you have a tuition reimbursement program or that you assist with childcare expenses?
Educating your employees on the benefits you offer is a way of making them happier and more productive. It gets them closer to being self-actualized, says Sullivan, borrowing from psychologist Abraham Maslows well-known hierarchy.
As a general rule, the smaller the company, the less likely management will focus attention on the issue of benefits.
I think that larger corporations or the more technologically adept corporations are the most advanced in their HR practices, including benefits, Sullivan says. The reason for that is because they usually have more ability financially to provide for some of these benefits. For years, theyve provided standard benefits. Now people are looking for some other new kinds of resources like concierge sources and things like that. The smaller companies are more concerned about wages.
Humphrey is one of those owners who runs a smaller company but remains distinctly aware of how important benefits are.
If you want to survive, you have to come up with something and you have to start from square one, she says. Today, I look at it every three or four months and try to make a judgment as to whats going to happen next year. I look at what I can afford and what I can add for my employees that is going to be meaningful.
There are many services that companies of any size can provide at little or no cost, such as payroll deductions. Heres how they work: An insurance company offers a companys employees a discount on insurance home, rental or auto. A payroll deduction is used to cover each employees payment, then one check is cut and sent to the insurance company. Employees get a group discount, and in some cases, it helps those who would otherwise be unable to attain that level of coverage.
Employees love that, Sullivan says. Its a really easy thing to do.
How to reach: Sills Motor Sales, (216) 749-1363; Employers Resource Council, (216) 696-3636
Daniel G. Jacobs (email@example.com) is senior editor of SBN.