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The Benefit of Benefits

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Every entrepreneur knows that benefits play a central role in employee compensation packages, and as a result, most business owners happily invest in good benefits to be competitive. But smart entrepreneurs also use benefits as a way to filter out bad candidates and attract exactly the candidates they hope to hire.

Tailoring your benefits package to the types of workers you are trying to attract is a great strategy for small, growing companies.

To show you what I mean, here's a hypothetical case in which a startup software company advertises some open positions and includes the following note in their advertisement:

"Signing Bonus For New Hires -- Free Snowboarding Lessons!"

Clearly, that ad is going to attract a younger job candidate. While there are no doubt a few octogenarians out there on the ski slopes, snowboarders tend to skew younger as a rule.

Mind you, it's illegal to discriminate in hiring because of age. But it's not illegal to structure your benefits in a way that attracts younger workers, if for some reason, you think younger workers are better suited for a particular position.

Am I suggesting that you discriminate against older workers? Absolutely not!

What I am suggesting is that you use your benefits program to attract workers that fit your target profile for what makes for a great employee at your place of business.

For example, one set of benefits will attract young single people. Another set of benefits will attract employees who have families. You can get either one -- you just have to know what you want and define the benefits accordingly.

Your benefits package starts as a blank slate. You can offer whatever you want to your workers: health club memberships, child care assistance, free dinner reimbursement for employees who stay later than 6:00 p.m., or even free snowboarding lessons.

What's most important is that you let your benefits match your culture. Your benefits are, and should be, a key component to defining the culture of your organization.

At SurePayroll, our payroll processing firm, we take pride in being a learning organization.

We want employees who want to constantly improve their skills. As such, we have made training opportunities a central part of our benefits package.

Lo and behold, the people who apply for our open positions tend to be people who want to learn and grow their base of skills.

If we didn't offer training as part of our benefits package, those hungry-to-learn workers would go elsewhere.

We also want our employees to work collaboratively. So part of our benefits package is the open atmosphere of our office. The layout is conducive to teamwork. Somebody who is not a team player will quickly get the sense that our company is not right for them.

One final example. I've written before about our five-year anniversary trips. I take all employees who hit a five-year employment milestone on a weeklong trip: Mexico, Saint Thomas or wherever. The employees decide where we go.

This benefit signals to prospective employees that we are looking to have a long-term relationship with them. By touting that benefit, we tend to get people who are looking for long-term career opportunities. The drive-by, short-term employees tend to self select out of the process, which is fine by us.

I call this process of using benefits to attract the right employees "Benefits Signaling," and if you are not doing it, I strongly recommend you give it a try.

The advantages of benefits signaling is two-fold. First, you attract employees that you want to hire. Second, you don't waste time hiring employees that don't fit your bill of materials because they opt out.

Just from looking at your benefits, prospective employees get a sense that the culture is right for them, or wrong for them. As a result, nobody wastes their time. Recruiter and recruitee are both more efficient.

So, next time you think about benefits, don't feel blue.

Sadly, most of us view benefits as an unpleasant burden we have to bear. Since when did we become the keeper of benefits? How is it that small-business owners and entrepreneurs across the country have been given this burden to shoulder?

Whoa, don't fall into that negativity trap!

No, rather than think of it that way, think positively about benefits. Benefits are all about attracting good employees. Benefits are a tool to help you succeed, not a burden.

If you think about it that way, you'll find that defining the right benefits can become a big key to streamlining your recruiting efforts and hiring the best employees for your organization.

When it comes to recruiting, it's true that you do get what you pay for.

But it's also true that you get what your benefits attract.

Design your benefits properly and the right prospective employees will come.

Last updated: Jun 9, 2008

MICHAEL ALTER | Columnist | President of SurePayroll

Michael Alter is president of SurePayroll, America?s leading online payroll service. He received an MBA from the Harvard Business School and holds a bachelor's degree in economics from Northwestern University.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.



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