Employee Benefits

Want to hang on to good people? Try these creative employee benefits

Once a quarter, Mark Firmani closes his company for the day and takes his seven employees to the movies. It isn't that business is slow. Firmani, president of Firmani and Associates, a public-relations firm in Seattle, says that the $500,000 company has plenty of work. Just the same, four times a year the employees don their pagers, forward the phones to the voice-mail system, and take in a matinee.

Firmani claims he shuts down for the day to stay competitive--competitive in the market for good employees, that is. Seattle is, after all, Microsoft country, and the local economic boom has attracted some big-name public-relations players to the area. "There are agencies here that can charge big bucks and pay well above the national scale," says Firmani. "So I try to give this place a more enjoyable atmosphere." He has also found that when Microsoft and others raise the employee-benefits bar, he must follow their lead. Microsoft has company-subsidized cafeterias.So Firmani provides weekly catered lunches as well as daily supplies of soda, juice, and candy.

Your business may not be in Seattle, but you still face the same challenge as Firmani: making your company a more attractive place to work. With national unemployment extremely low, it's harder than ever to hold on to good employees. According to Matt Weinstein, author of Managing to Have Fun, these days companies, especially those in high-tech industries, almost have to treat their employees as volunteers. "Employees know they could work anywhere," says Weinstein. "So companies need to create an environment where people feel appreciated and recognized."

When it comes to employee retention, big companies can throw money at the problem. Chances are, you can't. That's why smart entrepreneurs are looking for low-cost ways to add zing to their benefits packages. Consider some of these possibilities:

Give flexibility. For some employees, flexible schedules can be a valued perk. David Kaufer, cofounder of Kaufer Miller Communications, a 27-person communications agency in the Seattle area, had an employee who was distressed about his long commute. Kaufer and the employee worked out a schedule that included four 10-hour workdays, with Fridays off, until the worker could find a closer residence. "He really appreciates the three hours a day he doesn't have to spend on I-5," says Kaufer. Kaufer also set another employee up with a home office, so she could move closer to her fiancÉ in southern Washington.

Even manufacturers can offer scheduling options, albeit within limits. At Autumn Harp, a 65-person manufacturer of skin-care products in Bristol, Vt., founder Kevin Harper gives many employees the option to work one day a week at home. About 10% of his 65 employees take him up on the offer. Harper admits, though, that for certain positions, working at home is not feasible. "Production workers can't bring their machine home," he explains.

What could cost less--and offer more flexibility--than a casual dress code? At Half Price Books, a $56-million chain of discount bookstores that has its headquarters in Dallas, president Sharon Anderson Wright just asks that her employees wear clothing that is clean, untorn, and free of offensive slogans or graphics. "After a big debate, we decided they had to wear shoes," she says. Firmani, too, is sartorially permissive. His PR professionals usually wear jeans, sometimes sweats. All Firmani requires is that employees be within 15 minutes of wearing something presentable in case a client drops by. "I keep a suit here at the office," says Firmani. "Not that I wear it much."

Share the perks of your business. Is there an aspect of your business that you could turn into an inexpensive employee benefit? Orval Madden, CEO of Hot Topic, a $44-million chain of music-related-apparel and -accessories stores based in Pomona, Calif., reimburses employees for tickets to rock concerts. The business tie-in? For Hot Topic, the shows provide important market research. To qualify for the reimbursement, employees must return with a report on the fashions that the band and the fans were wearing and with other merchandising ideas.

Why not let employees share in perks you provide to your clients? Rick Born, CEO of Born Information Services, a $36-million information-technology consulting firm headquartered in Minneapolis, already was paying to entertain customers at a skybox at a local arena. Now Born splits use of the skybox between clients and employees.

Do fun stuff. CEOs and employees alike need ways to blow off steam. David Kaufer periodically rents a bus and--without advance notice--takes his staff to a Mariners game or to play laser tag. (One caveat: keep mystery events nonthreatening. Firmani once took his staff on a surprise outing to go parasailing, a form of parachuting that involves being airlifted by a boat. He watched one evidently frightened staff member turn increasingly white awaiting his turn. "I felt horrible," says Firmani.)

Some companies offer travel, such as a cruise to the Bahamas, to salespeople or even the entire staff if sales or profit goals are met. For a few years Rick Born offered such a trip. The perk was popular but logistically difficult and expensive. Also, some workers couldn't go because they couldn't arrange baby-sitting. So Born decided to take the money he was spending on trips and invest it in lakefront property in a Minnesota resort area.Staffers now take turns bringing their families to one of six company-owned houses--a benefit that's admittedly not cheap. But Born says that he was spending the money anyway, and this way he's building equity through mortgage payments.

Feed employees' bodies. And their souls. The easiest way to an employee's heart? Through the proverbial stomach. That's why Jack Schacht, president of National Trade Association (NTA), in Glenview, Ill., provides monthly in-house luncheons for the company's 50 employees. He finds that the luncheons promote camaraderie and offer a chance to celebrate birthdays at the commercial barter company. Mark Zweig of Zweig White & Associates, a $3.1-million consulting and publishing firm in Natick, Mass., goes even further and provides his 37 employees with free food and drink all day every day. "Our people work long hours," says Zweig. "We want to make it easier for them to do so." In the soul department, Autumn Harp gives employees two days a year in paid community-service time. Employees have used the time to volunteer at local schools, paint a nearby teen homeless shelter, and rebuild an AIDS clinic damaged by arson. In addition, Autumn Harp offers employees not only a health plan but also a "wellness reimbursement" of $200 a year for anything related to their "mental, physical, or spiritual well-being." Past reimbursement items have ranged from gym memberships to scuba lessons. One employee even put the money toward house paint, arguing that it would make him feel good.

Offer advancement opportunities. One of the best incentives for ambitious people is opportunity. Sharon Anderson Wright of Half Price Books fills management positions by promoting from within, ensuring that long-term employees have a chance to rise--and that new employees have an incentive to stay. "It's dancing with the ones that brought you," says Wright. Firmani provides a well-defined career track, with specific criteria for raises and advancement. For example, employees that bill 1,200 hours a year and make two new-business contacts know exactly how much their salaries will increase as a result.

Pat people on the back. Few perks are cheaper, easier, or more effective than recognition. And recognition can take a variety of forms. At Command Software, an antivirus-software company in Jupiter, Fla., Dyan Dyer created an "Angel of the Month" award that recognizes "random acts of kindness" within the company. One recent winner: an employee who volunteered to house a programmer the company had brought over from Germany and help him get acclimated and find an apartment. That winner received a gift certificate for a local spa, plus a small porcelain angel for her desk.

Far greater than the cost of these mostly modest investments is the value of the employee loyalty you can get in return. For example, Rick Born claims his turnover rate is one-third his industry's average--and he credits the difference to the perks he offers, especially the company-owned vacation homes. "I have employees' kids say to me, 'Thank you, Mr. Born, for letting us go to your cabin,' " he says. "You'd never get that from a kid if you gave his dad a $5,000 raise. I had one guy say, 'I couldn't leave if I wanted to; my family would divorce me.' "

Christopher Caggiano is a staff writer at Inc.

If you're looking for more ways to perk up your perks without overly driving up your overhead, here are a few books (with admittedly similar-sounding names) to turn to for inspiration. Matt Weinstein's Managing to Have Fun (Simon & Schuster, 800-223-2336, 1996, $11) is inspiring and contains lots of company-tested ideas and anecdotes. Bob Nelson's 1,001 Ways to Reward Employees (Workman Publishing, 212-254-5900, 1994, $9.95) focuses, as the title implies, specifically on rewards, both monetary and nonmonetary. Also very helpful is 301 Ways to Have Fun at Work, by Dave Hemsath and Leslie Yerkes (Berrett-Koehler, 800-929-2929, 1997, $14.95), which also contains a helpful reading list of titles from other publishers.