Years ago, as part of my job, I helped fill out an application for the company to be considered for some list of great places to work. I noticed that my co-worker had written a section praising our onsite daycare. I had no children, so assumed that it was just something I didn't know about. "We have onsite daycare?" I asked.

"Well, corporate does," she said. The corporate office was 50 miles away from our office, and we had sites all over the United States.

"Does any other site?" I asked.

"No," she said.

I argued for removing it, because the corporate office had only 500 employees and the company itself employed more than 30,000 people in the United States.

It stayed in, and our company was included in the list, along with praise for our onsite daycare--which very few people got to use. There was no indication in the write-up that this benefit was only for the privileged few.

This inconsistency is something that happens all over the world--and not just in large corporations. In family-owned businesses, for instance, you'll often see that the family members, regardless of position, get perks like flexible schedules and unlimited vacation, while the nonrelated employees had better be on time or else. 

Jennifer Y. Hyman, co-founder of Rent the Runway, noticed this two-tiered system--the same system implemented in her company. She writes in The New York Times:

"Our salaried employees -- who typically came from relatively privileged, educated backgrounds -- were given generous parental leave, paid sick leave and the flexibility to work from home, or even abroad. Our hourly employees, working in Rent the Runway's warehouse, on the customer service team and in our retail stores, had to face life events like caring for a newborn, grieving after the death of a family member or taking care of a critically ill loved one without this same level of benefits."

Once she realized how unfair this was and how it limited the growth and potential of her employees, Rent the Runway changed its benefits to make the same ones available to the hourly employees. This wasn't just altruistic--Hyman hopes to get a return on her investment.

"I believe that these new policies are not only in the best interests of our employees but also of Rent the Runway itself, which I'm hoping will see higher retention rates, lower training costs and better overall productivity from more experienced employees. I believe that these new policies will help us retain corporate employees too, or at least those who care about working at a company that takes values seriously: I received more positive feedback about these changes from my corporate team than about any other leadership decision I have ever made."

I agree with Hyman's philosophy. Treat everyone right and you'll make a better, more productive environment. However, I caution that there are some very good reasons for the two-tiered system: financial ones.

One of the reasons so many companies don't want to hire full-time employees is because of the costs of health care. For employees who don't bring a lot of money into the company, you have to be careful that the costs to employ them don't exceed their productivity. Once that starts happening, companies start investing in technology that decreases the number of employees needed--such as computer screens for ordering in restaurants.

But every company should evaluate not only its pay but also its benefits regularly to see what it can offer its employees. Making your business a place that respects employees and their time allows you to recruit higher-quality workers. And that, as Hyman points out, benefits your business in the long run.

Published on: May 8, 2018