Over 100 years ago, Montgomery Ward & Co. needed an innovative way to care for their employees and protect them from financial hardship. Founded in 1872, the company was known for its ground-breaking ways. Customers were attracted to Montgomery Ward & Co.’s unprecedented policy of “satisfaction guaranteed or your money back,” which it implemented in 1875. A few years later, they were neck and neck with Sears Roebuck, and the two companies struggled for dominance throughout the 20th century. In 1910, Montgomery Ward & Co. implemented the first true group health insurance plan.
Should You Offer Employee Benefits?
Fast forward to 2013. Providing benefits is a key competitive advantage. Losing one key employee can bring down your entire operation. We are not in a recession. People are hiring. Direct hire is picking up. The probability that your “A” players will be recruited away in the next five years via another company’s robust benefit plan is high. In my world, one of the continuous conversations business owners have is whether employers want to pay or play under the Affordable Care Act (ACA). You will have to “play” to keep “A” talent. If employers with 50 or more employees choose to offer health insurance independently, their offering will be more robust and attractive than an exchange plan.
Anything is valued by those you want to hire and the current employees you want to retain, especially director level positions. In 2012, the Society of Human Resource Management (SHRM) published, “The Employee Benefits Landscape in a Recovering Economy” (http://www.shrm.org/research/surveyfindings/articles/documents/2012_empbenefits_report.pdf) based on its annual benefits survey. It lists the over 300 types of benefits addressed in the survey, everything from traditional 401K plans, to down payment assistance, and increasingly popular technology discount benefits. We believe workplace flexibility policies support employees’ work life balance; provide predictability and stability to employers, all with low costs and high returns. The Applied Companies pay for 40 hours a year per each employee for volunteer activities.
Do you want good people or not? A key factor in future hiring negotiations will mirror history – the value of the benefits package. As Boomers get older, they may decide to stay with your company. Good. You’ll retain that institutional knowledge. Benefits packages can help hang on to those “A” players until you can undergo a succession planning process and knowledge transfer to their replacements. Offering a valuable benefits package reinforces your company culture and increases your productivity level.
Offering employee benefits is good for your business.
Jim Annis is president/CEO of The Applied Companies, which provide HR solutions for today’s workplace. Celeste Johnson, Tom Miller, and Suzanne Chennault, Applied’s division directors, contributed to this article.