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5 Changes to Employee Benefits That Will Save You Money

Jan 9, 2012 » by Cali & Jody

Companies are getting really creative with their employee benefits: to save money, to attract talent, or to retain talent. There’s no doubt about it, businesses have a hard job of finding the right mix of benefits to keep employees happy, but also meet the bottom line. We’re not about to get into health care and retirement benefits, but we do have a few suggestions for changes in your employee benefits that will help you save money and attract top talent.

1. Stop Tracking Vacation Time or Paid Time Off (PTO)

Tracking vacation time or PTO is a huge liability to a company. There is the effort and time it takes to keep track of how much PTO to give employees and making sure employees are using it correctly. Companies must also carry the liability on the books in order to pay out PTO when employees leave the company.

Did you take all of your allotted vacation time in 2011? If you’re like most people, you didn’t. Why don’t employees use all of their PTO? Here are a few reasons:

  • It’s a great savings plan! If I leave the company I get 6 weeks of vacation pay.
  • Taking vacation feels like abandoning the work. I look bad or unnecessary if I take time off.
  • I’m forced to use my vacation time if I just need one day off during the week. So it’s not really vacation. I’m still getting my work done but get punished because I have to take it as vacation time.
  • It’s a sludge generator (judgement from co-workers). “Another vacation day? How many vacation days do you get, anyway?”
  • Many companies force salaried employees to use vacation time in hour increments, so if I leave at noon, I have to use 4 hours of vacation time even though I may be doing work later in the evening.

PTO is costly and, ultimately, it plays a negative role in office politics. In a Results-Only Work Environment (ROWE), employees focus on getting results. Employees are responsible for managing their own time and so there is no PTO or vacation time. If they want to take an afternoon off with their kids and work at night, that’s fine. Employees can stay connected and get results while they travel on vacation, or they can prepare in advance to make sure goals are met while they’re off-grid.

2. Drop On-site Amenities

Here’s a big money saver. Companies spend a lot of money on amenities that look good, but actually keep the employee in the office more. Just look at this infographic of some of the crazy amenities at Google and other big tech companies. Why would you want to leave work when there’s a coffee shop, gym, concierge service, dry cleaner, health clinic, and daycare center right at the office? If employees were in a ROWE and had complete control over their time, they would use the daycare, dry cleaner, gym, coffee shop and health clinic of their own choice–in their community.

Do I really want to huff and puff on the treadmill in my spandex next to my boss. And shower next to my boss? No thanks! Rather than providing your employees more “stuff”, give them the ability to live their lives on their own terms.

3. Stop Administering the Flexible Work Program

Think of the money spent writing the 5,000 page handbook on telework rules, as well as the one million flexibility conversations that happen between managers, employees, and HR. When people are begging to leave early, come in late, and work from home, they are not doing the work. The costs here are lost productivity and unsatisfied employees.

4. Rethink Relocation

When you want to recruit the best talent you often think of having to move them to where you are located, and that can be expensive. But these days work is something you do, not a place you go. This means you can have the best talent working for you without making them uproot themselves (and their families in some cases). Other organizations will ask you “How did you get them to relocate?” And you can say “We didn’t.”

5.  Beyond Health and Wellness Programs

Don’t get us wrong–encouraging your employees to be healthy is a good thing. But wellness programs are sometimes just band-aids that cover the real issues. Why? Because work culture doesn’t support them.

Here are some examples:

  • I can’t take time off work to go to the doctor or stay home when I’m sick.
  • I can’t use my lunch hour to take a walk because everyone else eats lunch at their desks, and I’ll look like a slacker.
  • I have to be at work at 8:00 am, and I don’t have time to eat a good breakfast or pack a healthy lunch.
  • I feel stressed out because I’m expected to come in early and stay late at work.

All of these things are part of a sick work culture and none of them have anything to do with getting results. Why not create a work environment where employees can be healthier and happier, rather than offering expensive and ineffective wellness programs?

Studies show, employees who are in a Results-Only Work Environment are healthier and happier.

And that’s an employee benefit worth investing in.

What do you think? What benefits do you offer your employees that you could get rid of or re-imagine? What benefits do you love at your company?

 

  • Anonymous

    6. Get rid of the annual company party.  Studies prove that people dislike these events and would rather not go. Plus you are forcing people to be social who you didn’t hire for that reason.

    7. Eliminate the expense account rules – Really, you trust employees to represent your company while traveling but you don’t trust them to be reasonable with the corporate Amex? Save on needless accounting time and training costs.

    8. Get Rid of Commissions and Bonuses – Ditch incentive pay entirely. It doesn’t lead to results, it leads to people gaming the system. In fact, it’s not really an employee benefit.

    9. Dump Seniority Programs – There’s nothing special about being at a company twenty years that deserves perks like special parking or extra attention. In fact, the best thing you can do for someone who has worked for you for two decades is ask them to take a job somewhere else for a while to get some new perspectives.

    10. No More Birthday Cakes – People love to celebrate their birthday with family and friends. But in most offices, you aren’t the family and friends of all your coworkers. Let people celebrate (or not) on their own time. Save money on cake and reduce the lost productivity of expecting everyone to sing songs instead of working. 

  • http://twitter.com/PersephoneK PersephoneK

    I’d add, don’t buy employees a cell phone.  Chances are, they’ll be annoyed because now they have to carry two phones: their personal and office phone.  I’d extend this to other peripherals like lap tops etc. Just put very clear security policies in place (that don’t amount to people not being able to use their own personal technology largely however they want to) about sensitive data, and manage abuses of that trust instead of assuming everyone will screw up.

    • KellyK

      I agree with this, with the caveat that if you *require* employees to use or have access to a cell phone, it’s appropriate to pay a portion of their bill if they’re spending more on the phone than they would without that requirement.  I’m not talking about an employee voluntarily using their cell make their own life more convenient (e.g., sure I can call into that meeting while I’m traveling or I’m running my kid to the doctor’s office, call me if anything comes up), but about things like being on call or being expected/reqired to provide your cell phone number to customers.  And even with the caveat, paying a portion of someone’s bill is still going to be tons cheaper than providing them with a cell phone, and more convenient for them too.

  • Anonymous

    Robby & PersephoneK, looks like we need a part two to this post! Nice.

  • Christy Runningen, Culture Rx

    Great points!  I’d also say that vacation days most of the time aren’t actually used as vacation days anyway.  Employees end up using at least some of their time ‘off’ to catch up on emails, projects, etc., because they can do it in peace with no expectations from their co-workers.  And I had many a vacation where I came back into the office and wondered why I even left – I had so much work when I returned that it wiped out the benefits of having been gone.  Sad, isn’t it?

  • calica

    Off topic, but – how would you respond to this statement, which was posted in a forum discussion?

    “ROWE is actually really terrible. I’ve worked like that before, it
    really sucks especially if you’re married and have kids. Unless you have
    the kind of job that robots will be doing soon you need your coworkers
    around either in person, over IM, voice chat, whatever. It’s probably
    great if you’re an early 20s slacker who wants to take off work to raid
    with his WoW guild but it’s no way to run a business. It’s an
    overreaction to a dislike of cubicle culture.

    ROWE is just a dumb idea invented to sell books and employ management
    consultants. Like an eclair full of poop, it’s much better to look at
    than internalize”

    • Christy Runningen, Culture Rx

      Ouch!  I would imagine this individual doesn’t have a clear understanding of what ROWE is!  They imagine it is all about ‘time off’, which we know it isn’t!  They need to understand that in a ROWE, everyone is accountable to results and by being planful and communicative, you can actually be more efficient in your role.

      People can choose to do their work wherever they want, including the office…it’s nothing personal, Mr. Cubicle.  ;) 

    • Anonymous

      I think they may have worked in an environment that had the “work whenever and wherever you want” thing down but neglected the “as long as work gets done” part. 

      Alternatively, they might be one of those demanding people who gets annoyed if a coworker doesn’t answer their question the minute it’s asked.  “…you need your coworkers around either in person, over IM, voice chat, whatever…”  Really?  All the time?  Because I’ve been collaborating with two coworkers all day using nothing but e-mail.  It’s not stuff that requires their immediate attention, so I don’t need to call them up. I work on other stuff until I get a response. Does their work day grind to a halt if a coworker is home sick, or in meetings all day?

      If you *need* real-time communication with certain people, whether it’s because of your job or because of how you individually work best, then you should schedule specific times to work with those people on particular things.  ROWE doesn’t require you to never do that again.  But it does require you to plan for it rather than popping into people’s cubes or offices and distracting them because you think your time is more important than theirs.

  • ROWE-wannabe

    I’m curious how you address using vacation for actual vacation.  I used a week this past Christmas and didn’t do any work at all (so nice).  I plan on going out of country in the summer with two kids in tow and can’t email.  In a ROWE world, do I not get paid for that time? 

    • Christy Runningen, Culture Rx

      Great question!  In a 100% pure ROWE world, you would be able to take as many vacations as you want without worrying about submitting leave time.  You would simply work ahead as much as possible, get someone to cover for you during times that you’re ‘unplugged’, and jump back into the work after vacation.

      The complexity comes in when you’re in a world where the ROWE company still has paid time off…in that case, we say when you are going to not be responding in your usual response timeframe, submit vacation time.  Otherwise, no matter where you are or what you’re doing, if you are responding within that normal timeframe, you do not need to submit any time off!

      • ROWE-wannabe

        Very cool, great points.  I work in somewhat of a ROWE atmosphere.  My principal is a huge proponent and I have a unique situation that he allows.  My husband works in an anti-ROWE environment, one that encourages working outside the office AND insists on the standard 830-530.  It’s awful and he’s often putting in 14 hr days, including 10hrs in the office.  Yet, if he even needs to come home early for an hour– he needs to take “PTO”.  I feel that the umbrella of a “salaried” worker and the recession allows for this time of exploitation.

        To go along with that, I’d love to see in your blogs ideas on ways to quantify results that can be used by employees throughout the year–not just for that once-a-year review.  I’ve been keeping a log of what I’ve been doing and submitting it monthly to my director (who isn’t into ROWE, but is trumped by my pro-ROWE principal).  Complicated, yes.  Worth it so my baby doesn’t need to be in full-time day care=double yes.
        Keep it up guys!

      • KellyK

        One of my big pet peeves is the way “salaried” for many companies means “hourly with mandatory free overtime.”  I think that if you’re really salaried, you should be able to manage your time as you need. 

  • Ratty1977

    Great post, i am considering employing the first people for my recruitment business and i really like the sound of rowe, it would work well if done right. however i am confused with how you pay your employees, i mean if it is based on performance then do you drop the basic and offer commission only or do you drop the comission and pay them a set wage? If you pay them a set wage then how do you know what to pay them, some people will be more productive than others and if you drop the comission then how do you reward the people performing better than others?

    • http://twitter.com/StaceyMSwanson staceyswanson

       Ratty1977- Great questions! First, you want to start with identifying results. What do you want them to achieve and what is a fair wage for that work?  Some may be paid more based on experience, education, etc but they should be able to deliver more.  Once you understand what you want them to achieve, back into the pay.  In a ROWE, some organizations decide to incent employees with a bonus or variable pay.  You will need to decide what best fits with your business. 

      From our perspective, we find that ROWE is the benefit and reward that employees are seeking.  They have control over their time and that is the best reward of all.

      To set a foundation of ROWE for your organization, you may want to look into our ROWE on-line community. Here’s the link: https://gorowe.bloomfire.com/

      • Ratty1977

        Is it possible to purely pay people on productivity and not pay a fixed salary? I could think of ways the employees could get paid on doing certain actions and depending on how many they do and what they achieve, measuring a fair salary at the end of the week or month

      • Calica

        The problem with only paying people for certain work is that they don’t get paid for other, equally necessary things. So they end up doing a full day of “paid” tasks so they can eat and pay their mortgage, and then they put in hours of extra “unpaid” work that still needs to be done.

        Of course, you can mitigate this by making sure you pay enough for the chosen tasks so that employees can still make a living while doing a reasonable amount of work each day.

      • http://twitter.com/StaceyMSwanson staceyswanson

         Ratty1977- What you are proposing reminds me of paying piece work in manufacturing.  You receive a specific rate for each piece you manufacture or produce.  Here’s my problem with that- people are focused on each specific piece and their pay- and the focus is on managing that.  Instead, in a ROWE, we consult with organizations to get them to attach to the greater outcome of the organization and not focusing on each widget that is produced.  You want them to tie how each part of their job is important to the overall outcome and not just what’s the amount they need to do to get paid.  Does that make sense?  I would focus on paying a competitive wage, establishing crystal clear results and managing to those results.