The contributions in the top section are all required by the federal government. We don't pretend we're doing it out of the goodness of our heart. They aren't negotiable. We can't shop to get better rates.
Our workers' comp insurance carrier assigns a factor to each job based on its riskiness. The people who install our signs are on cranes 80 feet in the air, around live wires, so their premiums cost us more than our office workers' do.
In 1988 a manufacturing worker's premium was about 13.9% of that person's salary, or a factor of .139. Now, on account of improvements in our safety record, it's down to .0882. Calculate that against a couple million dollars in payroll, and that's a real savings. This shows everyone the costs of carelessness.
[The medical insurance] numbers are right off the insurance schedule and represent the portion of employee health insurance the company pays. The employee's contribution varies depending on the deductible he or she elects and the number of dependents, but on average, we pay about 75%. Without seeing these figures you can't really understand that health insurance is incredibly expensive.
We mark with an asterisk all the costs for nonproductive time -- holidays, vacation, sick days, in-house training -- that are absorbed into associates' base pay. Because it's not over and above salary, it's netted out at the bottom of the form. We're more generous with these benefits than our competitors are, and this reiterates that.
This number -- 86.6 -- is the total of 10-minute breaks, morning and afternoon, every day, for manufacturing workers. Breaks for administrative staff aren't nearly so formal, but there's still paid, unproductive time.
We match 25¢ on the dollar for the first 6% of salary deferred to the 401(k), an effective rate of .015 of base annual earnings. Almost no one defers less because we really promote this benefit. We knew that as soon as we got people in, they'd see their money grow and they'd keep contributing. On the day people become eligible, we offer them a $100 bonus -- paid to their 401(k) account -- if they join.
The Employee Assistance Program provides for five free visits to a counselor, per problem, for all sorts of problems -- financial, family, drug. It's relatively cheap, and we figure if it helps us keep one good employee on track, we've made back the cost 20 times over. We started thinking that 4 employees a year would be good participation, and after three years the rate is running at about 11. It's not as hyped as other benefits are, but the work sheet reminds people that it's available.
[The CareWise Wellness Program:] For a flat fee per employee, we get access to a hospital's 800 line. Doctors and nurses there answer questions about, say, how to diagnose and treat fevers. Employees also receive a monthly newsletter that encourages preventive care.
A lot of companies don't pay all administrative costs of the 401(k).
We pay for a lot of equipment, safety glasses, overalls for welders, laundry services.
[Educational Assistance/External:] Although our policy says classes must be work related to be reimbursable, we pay for just about anything, short of swimming or basket weaving. We cover tuition and up to $100 for books or lab fees. This $367 could have been a couple of one-day seminars or a three-credit course at the local university, plus a book.
[Training & Education/Internal:] We probably understate the amount we spend on education. This doesn't even account for time we spend developing our internal programs. This $174 paid for a segment of quality training and includes part of the speaker's fee and the money we reimbursed the associate for hours spent in class after work. The number below, $85, is what we pay for our quality workbook.
Once the associate fills in the work sheet, he or she can ask the accounting department to generate a report that looks like this one, showing the relationship of each benefit to that employee's base annual earnings. The key is the bottom line. We pay this person $7.25 an hour, but we pay an additional 19%, nearly $3,000, in benefits.
[PPP Profit Sharing:] We contribute 20% of after-tax net income to a pool, which is then distributed to all employees who have been with us at least one year. This replaced the old, confusing incentive programs.
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