Low Costs, High Returns

These days, employee benefits and perks can start to feel like an expensive luxury. Yet surprisingly enough, the programs employees value the most are often the ones that cost relatively little.

Saturday, May 2, 2009
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As the economy continued its nauseating nose dive during the first part of this year, financial-services firm USAA did not look to reduce its employee perks, as many companies are doing. Part of the reason was that the potential loss of morale and engagement didn't seem worth it. However, the bigger truth was that USAA didn't cut its popular programs because it wasn't going to save much money by doing so.

"Many of our most popular programs cost us very little, so there'd be no real point in eliminating them," says Jeff Weiss, senior vice president of benefit programs and people-services operations for the San Antonio-based company.

That's good news, because dollars and cents have seldom been under tougher scrutiny than they are today, in an economic climate that makes employee perks look like little more than line items with big targets on their backs.

Retaining and engaging employees feels like a Catch-22: To perform well, companies need motivated employees who feel appreciated, but the environment doesn't allow for the spending that's usually needed to motivate and appreciate. Reward, but do it cheaply. Boost the collective mood ... without spending money. It starts to look like morale will be bolstered solely by handshakes and pats on the back.

So the prudent question becomes: What can be done to inspire and reward without breaking the bank? And more importantly, how effective can cheap benefits really be?

The answer is: Very . . . so long as you're creative.

No False Assumptions 

"Little things can be really effective," says Lily Mok, research vice president for Stamford, Conn.-based Gartner Inc. "Small, creative perks are gestures that show the company cares, and that's motivating in itself. Some companies simply offer free lunch or free pizza one day a week. It doesn't cost much, but it's a nice thing to do."

Many companies, she says, make a false assumption around perks. Employers often think it takes a lot of money to keep people focused and productive -- but that's not necessarily the case. At USAA, for example, the things that employees wanted most were flexibility, convenience and more time in their lives, says Weiss. 

Interestingly, those things usually aren't very expensive. Yet, they make up the backbone of USAA's comprehensive suite of perks.

USAA's 14,000 employees have access to a carpool-matching service called NuRide, which pairs employees with others who have similar ride patterns. They can consult with college coaches to help research schools and navigate through the college-application process.

Or they can use the popular new "My Helper" -- a concierge service provided by Atlanta-based 2PlacesAt1Time Inc. that -- for $5 an hour (paid by employees) -- will handle vacation research, take cars to have their oil changed or pick up dry cleaning. Weiss says that since My Helper debuted earlier this year, he's been deluged with feedback from employees who call the service "a blessing."

"It gives employees the gift of time," he says, noting that the cost to the company is very low when compared to more traditional benefits. "Our employees tell us they want flexibility, and that's more than just working at home. It's freeing people up to focus on things that are more important to them than running errands -- like spending time with their families, or doing things that are of interest to them."

USAA (which does, by the way, offer flexible work arrangements that include working at home, in some cases) also offers Webinars about college planning, mass-transit fare subsidies of 30 percent, and an online EmployeeMall containing discounted items from more than 100 retailers. The company sponsors free financial-planning seminars -- geared toward a wide spectrum of audiences -- during work hours.

"These investments far outweigh the small costs associated with them," says Weiss. "If we can keep people at work, focused and productive -- financially, emotionally and physically -- then we feel they can do their jobs that much better. And fortunately, we can often do that with creativity rather than a huge expense."

Beyond Free Ice Cream

One of the most popular perks at Dixon Schwabl, a full-service advertising agency in Rochester, N.Y., is most certainly not a huge expense. In fact, it costs the company only a dollar or two per employee.

"We have 'Ice Cream Thursdays,' where an ice-cream truck comes on Thursdays during the summer and provides free ice cream to the employees," says Vice President of People and Development Karen Sims. "It's one of the least expensive things that any company could offer, but it really motivates and energizes people."

Interestingly, the company's perks are all inexpensive -- yoga sessions, bowling and soccer leagues and philanthropic "Make it Happen Days" -- a paid day off once a year that employees can use to volunteer for any not-for-profit organization of their choice. If employees asked for more expensive items, Sims says, the company would duly consider them. But that hasn't happened yet, and it's not for lack of asking.

In 2008, Dixon Schwabl was named "#1 Best Small Company to Work For In America" by the Great Place to Work Institute in San Francisco. As part of the application process for the award, the company had conducted extensive surveys to see what employees wanted and valued. As it turns out, what they wanted was what they already had, paid for by CEO Lauren Dixon's budget line item allocated to "fun," says Sims.

"We found that many of the things that employees appreciate are these lower-cost perks," she says. "The key to all of it has been listening to people. It helps to hear what people really want."

Sims adds that the company hasn't considered cutting any of its perks, and says there would be no point because they cost so little. Instead, the company asked employees to brainstorm some cost-saving ideas, turning it into a contest -- and yet another creative perk. The team that came up with the most cost-saving ideas won a reward.

One year, an idea was to hire a courier on staff instead of using a service. Dixon Schwabl took the suggestion and has saved "a good deal of money" according to Sims.

Surveys and a general atmosphere of communication are key, says Gartner's Mok. Without employee input, a company may slash what it feels is an insignificant perk but which employees really value. And with input, employers sometimes realize that the most valuable perks aren't "things" at all, and may cost virtually nothing.

"We've found that, besides the base salary and incentive programs, the key drivers in retention are interesting work, recognition and flexible work arrangements," she says. Flexibility can take the form of telework, compressed work schedules (such as the option of four 10-hour days) or any other willingness to accommodate a work/life balance.

"Almost every employee appreciates it when a company will work to fit their individual needs," says Mok. "Permitting flexible hours or telework is a great low-cost way to motivate people."

Gaining by Training

Another great motivator? Training, says Mok. Employees appreciate the ability to learn, and most feel a modicum of security because employers seldom invest in training employees who aren't valuable or who they expect to lay off. Tax and advisory firm KPMG, headquartered in New York, has an extensive training program that has been increasingly popular of late, says National Director of Workplace Solutions Barbara Wankoff.

The company recently expanded its offerings to include timely issues -- Webinars on financial planning and navigating a tough economy -- but has also simply been reminding employees of the training and educational opportunities that are already available to them.

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Two of the programs KPMG has been promoting lately aren't exactly work-related but are definitely timely: stress management and weight management.

"We're promoting them now because we know these are stressful times for employees," says Wankoff, noting that weight gain can be a result of stress. "We offer access to personal coaches for employees who want to focus on stress or weight management. The coach reaches out to you over a period of time and helps you establish your goals and stay on track."

The two programs were enhancements to a pre-existing contract with the vendor (which KPMG declined to name, citing company policy), so the net cost to KPMG was low. Wankoff also stresses the efficacy of these low-cost perks: They aren't in use today because they're cheap, she says. They're in use because employees appreciate them, and their low cost is a bonus.

The company's mentoring program is a case in point, says Wankoff. Mentoring costs virtually nothing, and involves simply pairing employees with appropriate mentors. Yet, KPMG has been encouraging employees to turn to mentoring to help them stay focused during tough times, determine their next career steps or figure out how to meet challenges.

Not all of KPMG's creative perks are career-related. Some are intended to be fun, and are very inexpensive. The company created a Super Bowl Challenge -- an in-office contest in which employees would try to guess quirky elements of the Super Bowl, such as the result of the coin toss or the weather. The winners received a $100 donation to a charity of their choice.

"It was low-cost for us, but it generated a lot of enthusiasm and fun and conversation in the offices, and some friendly competition among people," says Wankoff.

Around Valentine's Day, KPMG nudged employees toward available discounts on flowers, jewelry and other romantic gift items through arrangements with local vendors. And, to expand its no-cost rewards, the company added a "thank you" level to its internal points rewards system that lets employees recognize co-workers via an e-card that can be customized with a personal message. Rewarding without spending is really just a matter of thinking creatively, says Wankoff.

"It may surprise employers [to find out] what their employees actually value," says Mok. "The employer's view on motivation isn't actually very important. They need to ask employees what motivates them. What do the employees value?"

One of the things that employees at perks provider ReThink Rewards told leadership they valued was variety. Accordingly, employees may dedicate 20 percent of their time to doing something totally outside of their normal work niche as a member of a "Vision Committee."

"I'm in HR, but for 20 percent of my time, I'm on the corporate social innovation committee. So I get to run events," says Cathy Chin, the Toronto-based company's employee experience manager. "It's a different skill set, and I'm working with different people. It's something employees have really embraced. You get to learn in different areas. It's something that is low-cost, but definitely high-impact in terms of what our employees learn."

The company, which designs rewards and recognition programs for other companies, offers a host of creative, low-cost perks to its own people. It has a companywide support program, called "Personal and Professional Top One," that's designed to keep employees accountable for personal goals.

If you want to run a marathon, you are matched with people who have done it who can offer guidance and keep you on track. If you meet your goal, you receive a framed certificate at an official awards ceremony.

"It costs virtually nothing," says Chin. "But your employees are achieving their personal goals, which makes them more engaged with the company because the company provided support in achieving them."

Ultimately, says Gartner's Mok, the cost of perks doesn't matter as much as the connection they imply.

It's not so much that employees want stuff as that they want to feel that the company cares and is looking out for them.

"The small perks that are effective work because they are fun, because they show that the company is trying to make employees feel happy and appreciated," she says. "These things are part of being treated as a member of a family."

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