Does your benefit package meet the needs of employees?

If we were to do a survey of business owners across the country, the popular belief would probably be that financial compensation is the key motivator when it comes to worker morale and retention. However, that belief is probably more myth than reality. Numerous studies have, in fact, revealed that high wages fall only about midway on the top-ten list.

The factors that actually affect employee morale the most are as follows:

1. Full appreciation of work done
2. Feelings of being in on things — in the communication loop
3. Help on personal problems
4. Job security
5. High wages
6. Interesting work
7. Promotion in the company — associated with position or responsibility
8. Personal loyalty of supervisor
9. Good working conditions
10. Tactful discipline

These factors have been found to be universally applicable regardless of geography, business size or industry. For both employee retention and recruitment, it is important for business owners and managers to understand these factors and to know where each falls on the priority scale. Psychologists tell us that we all strive to meet two basic human needs: 1) to feel appreciated, and 2) to feel secure.

What does this all mean when it comes to customizing a compensation/ benefits package for your employees? Many small business owners think their ability to provide such a package is very limited due to financial constraints. Armed with the knowledge above, you may be able to create a package that doesn't significantly undermine the bottom line of your business, yet perhaps better meets the needs of your employees.

The key to all of this, however, is to ask your employees what is important to them. Before you can create or improve your benefits package, you must know your employees' needs. Perhaps a flexible work schedule is more important to your employees than having a prescription drug plan. They may favor quality of life benefits more than traditional health, leave or financial benefits.

As food for thought, and perhaps as potential content for an employee benefit survey, consider the following list of traditional and creative benefits:

• Health (pretty traditional in nature)
  - Medical
  - Accidental death & disability
  - Prescription drug
  - Dental
  - Vision
  - Cafeteria plan
  - Long-term care
  - Short- and long-term disability
  - Life
  
  
• Time Off (traditional, plus a few creative)
  - Holiday
  - Vacation
  - Sick leave
  - Personal leave
  - Funeral leave
  - Emergency time pools (employees can contribute vacation/sick leave for the benefit of other employees)
  
  
• Financial (getting a little more creative)
  - Yearly raises/bonus plans
  - Retirement plans
  - Stock options
  - Employee discounts
  - Education
  - Retention rewards
  - Generation X raises (raises that are fast and often, rather than annual)
  - Fitness center discount
  
  
• Quality of Life (this is where creativity abounds)
  - Tuition reimbursement
  - Childcare
  - Flu shots
  - Community service opportunities
  - Wellness facility
  - Casual dress
  - Counseling services (stress, grief, nutrition, career)
  - Pets at work
  - Housekeeping services
  - Massage therapist

The key to all of this is to ask your employees what is important to them, then engage in dialogue to determine what is feasible financially and logistically.

- Jackie Rasmussen, business specialist, MO SBTDC. For Creating Quality Newsletter, May 2002.Updated 2/20/08.