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Benefits on a budget

9 ways to attract and retain employees with benefits that don’t break the bank 

By Robyn A. Friedman    

Amy Ogden loves to volunteer. Over the years, she’s managed registration at a charity golf tournament, provided office assistance to the Cystic Fibrosis Foundation, and presented a health and nutrition workshop to Girls Incorporated—and she’s done it all on company time.

Ogden, director of public relations at Clockwork Marketing Services Inc. in Ponte Vedra Beach, participates each year in “Volunteer Day,” sponsored by her employer. “This is always a special day for me,” she says. “Having my company’s support as I give back to the community is very meaningful.”

Paid time off is just one employee benefit offered by small businesses intent on keeping employees happy while containing costs. As the economy continues to struggle, businesses are looking for ways to reduce their overhead. Many cannot afford to give out raises or bonuses this year; others are cutting back on benefits.

But even with these cost-saving efforts, it’s essential for small businesses to continue to show employees that they care and appreciate their services. That’s one way to reduce costs associated with turnover, absenteeism, and sick time.

“Not giving out raises can have a real negative impact on employee morale and motivation,” says Dr. K. Habib Khan, acting dean of the School of Business at Stratford University in Falls Church, Va. “But if you take the time to show that you appreciate them during this rough economic time, they will be more likely to hang in there and remain dedicated and loyal employees.”

According to the Society for Human Resource Management (SHRM), in 2010, organizations spent an average 19% of an employee’s annual salary on mandatory benefits, 18% on voluntary benefits, and 11% on pay for time-not-worked benefits. With these costs, it’s easy to see why employers would want to cut back on benefits as many struggle to survive.

Still, after a decline in the number of organizations offering employee benefits from 2008 to 2009, SHRM reports that employee benefits have remained relatively steady over the past 12 months, which is a promising sign.

Ways to reward

Many companies are trying to find ways to reward their employees without racking up additional bills. Here are nine ways to show your employees that you value them without breaking the bank:

•Paid time off. Even if it’s just one or two days per year, employees will appreciate it. “It’s important for each one of our employees to have a work/life balance,” says Jackie Artybridge, vice president of Clockwork Marketing Services. “It’s really stressful here, but we want everyone to be happy, and you need that balance.”

•Flexible scheduling. Some employees might prefer to work four 10-hour days per week and have three-day weekends. Others may enjoy working at home one day a week.

“We never, in the history of human resources, have had the opportunity we do now because of technology to have flexible scheduling,” says Robin Bullock, president of the Jacksonville chapter of SHRM. “There are a lot more of those types of benefits now because people can get very creative about what they offer.”

•Casual dress codes. Even if it’s just one day per week, such as “Casual Friday,” employees appreciate this benefit.

•Catered lunches. Nova Pressroom Products, a manufacturer of pressroom chemicals based in Jacksonville that has 15 employees, offers catered lunches once or twice a month.

“We’re a fairly new company, and we’re still in a growth mode, so we’re sort of skinny on benefits to begin with,” says Ron Rose, the company’s president. “We have medical insurance, but we do like to do things that help morale that aren’t terribly costly.”

•Discount medical and lifestyle benefits. Jacksonville Beach-based Practical Health Benefits sells a discount medical package that offers 15% to 50% discounts on dental care, 20% to 50%  off eyeglasses, pharmacy discounts, and a “Consult-a-Doctor” benefit—all for $15 per employee per month. He sells to both individuals and small and mid-sized businesses.

“We’ve seen an increase in our business,” says Steve McCann, the firm’s president. “This is a great complement for companies that have gone to higher deductible [health insurance] plans. For as little as $15 per month, you can expand your coverage and still save money.”

McCann also offers a $29.95 per month package that has 14 employee benefits, including roadside assistance, chiropractic care, and more.

•Wellness programs.  These can include gym memberships, massages, or educational programming designed to help employees make healthy choices. Wellness programs can also help reduce sick time and might lower health insurance premiums.

•Local discounts. Consider setting up trade relationships with other local businesses. For example, negotiate a deal with a local restaurant to offer a 20% discount on meals to your employees. That not only benefits your employees, but also helps the restaurant fill tables. You can work out similar deals with hotels, spas, or retail shops.

•Offer spot bonuses. Keep stashes of items on hand to occasionally give away to those going above and beyond the call of duty. These could be gift cards, concert or movie tickets, or free meal coupons.

•Celebrate milestones, both large and small. Instead of waiting for an employee’s 20th anniversary to celebrate, consider recognizing that individual at five years—and personalize the reward. If the employee likes skiing, for example, purchase lift tickets for them at their favorite ski resort—or concert tickets to a popular band.

One piece of advice to an employer seeking to come up with creative ways to compensate employees: You don’t have to spend a lot.

“Don’t overlook small benefits,” says SHRM’s Bullock. “There are benefits to a $10 gift certificate to the movies for an employee who loves movies.”

Watsie Petree, a dealer services manager for Nova Pressroom, enjoys the twice-monthly lunches catered by her employer. Her particular favorite is the barbecued pork, chicken, and ribs from a restaurant near the office.

“It makes you know that they care about you—and then you want to give back to them,” she says. “It’s good for moral when we all sit around the table and eat together and laugh. You could be eating peanut butter and jelly sandwiches.”

 Indeed, morale—as well as employee attraction and retention—are what it’s all about from the employer perspective.

“For a lot of small business owners, it’s really challenging to be able to pay for all the healthcare needs for your employees,” says Clockwork’s Artybridge. “But when employees know they’re valued, that makes a difference and causes an employee to want to serve and really do their best.”

Robyn A. Friedman is a contributing editor to Advantage. She can be reached at

Employee benefits in a post-recession economy

According to the Society for Human Resource Management, even though employee benefits have remained relatively stable since 2009, benefits offerings have experienced a downward trend when compared with statistics from five years ago. Even noncash perks are being cut.

Here is the percentage of companies offering some creative or unusual benefits to their employees:

 Benefit                                                2006                                        2010

Dry cleaning services                          13%                                         7%

Pet health insurance                              5%                                         4%

Holiday parties                                    87%                                        79%

Milestone rewards                               76%                                        68%

Company picnic                                  66%                                         56%

Take Your Child to Work Day           38%                                        25%

Pets at work                                           4%                                           6%

(Source: Society for Human Resource Management, 2010 Employee Benefits Survey)

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