Giving the goodies: Many employers see advantages in maintaining workplace perks

First went the bull market, then the Internet companies, then the fabulous employee perks — the in-house massages, the Friday night keg parties, the gym memberships.

By Shirleen Holt
Seattle Times business reporter

At least that’s what the post-bubble news stories told us.

Yet two years into a recession that has loosened the job market and tightened corporate budgets, many workplace benefits are still thriving.

The Omni Group, a software company in North Seattle, was considered a leader in geek perks back in 1997 when it installed a big-screen TV, game systems and a Foosball table.

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Birth of a perk

They were innovative at the time: a brief history of workplace extras.

1950s: Employee-assistance programs

1960s: Prepaid legal services

1980s: Child-care resource and referral services introduced

1990s: Elder care, adoption aid, education aid, pet care

2000: Casual dress, on-site massage, sabbaticals, group purchasing

Source: Fisher Vista

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Today its 25 employees enjoy two big-screen TVs, two pinball machines, a pool table, free home maid service, free in-house massages and two meals a day cooked by an on-site chef.

Owen Media, a small Seattle public-relations firm serving the sluggish technology industry, still closes its office once a quarter for employee "fun days" and allows employees’ dogs to roam the offices.

Aventail, a Seattle technology company, raised the employee contribution for certain health plans but continues to offer a Friday beer cart, subsidized gym memberships, on-site massages, bus allowances and free sodas.

Such largesse seems to counter predictions that generous perks would disappear once the job market turned in the employer’s favor.

In fact, the number of companies offering such extras as tuition aid, adoption subsidies and even dry cleaning pick-up increased between 2001 and 2002, according to Hewitt Associates, a human-resources-consulting firm.

The Employee Services Management Association, a trade group for benefits coordinators, found that nearly two-thirds of its members were holding their budgets steady despite the recession, and 13 percent were boosting benefits.

Although The Omni Group had its first unprofitable year in 2001, the only employee benefit it cut was the free Odwalla juice.

"People would drink five or six a day," said Will Shipley, the company’s 33-year-old president. "$200 a day on juice was ridiculous."

Maid service, not juice

Instead, the privately held company put its resources into the chef, a chef’s assistant, a massage therapist and the maid service.

It’s a business strategy, Shipley said.

"One of our original goals was to free people’s time so they could work more."

Indeed, many of the company’s employees work well into the night, and for salaries below the going rate. Labor groups have criticized such practices, claiming they’ve turned some workplaces into high-tech sweatshops. But Omni has seen little turnover — it’s lost only four employees in 10 years, Shipley said.

Keeping employees in place is one reason some companies continue to shower them with extras.

Even with a job market flooded with qualified people, it still costs a company more to hire a new worker than to keep an existing one, said Steve Walker, chief executive of Walker Information, a consulting firm specializing in employee loyalty.

The cost of replacing a worker can run three months to 18 months of the employee’s salary. Thus, an employer could pay as much as $67,500 in training and lost productivity to replace someone who earned $45,000 a year.

Then there are the intangibles.

"Every time you lose somebody you lose part of your culture and some of your knowledge," Walker said.

John Heaton considered this when he decided to put in a child-care center at his small outsourcing firm in Kennewick.

With only 16 employees Pay Plus Benefits might be one of the smallest companies to offer such an extravagance; it subsidizes the center at $2,500 a month. But after many of its employees began having babies, Heaton wanted to make sure they came back after maternity leave.

"The cost of replacement would be greater than if we had our own on-site day care."

Although the number of perks beyond the usual health insurance and vacation pay is growing among American companies, job satisfaction isn’t.

Only a half of all workers today are satisfied with their jobs, compared with nearly 60 percent in 1995, according to The Conference Board.

Some experts on workplace dynamics say they know why.

"Trying to engineer (job satisfaction) through programs can only succeed so far," said Tom Davenport, author of "Human Capital" and a partner with Towers Perrin, a management consulting firm. "Companies forget that what engages people emotionally in their work is the same thing that engages them in a lot of their other relationships."

In an unusual study exploring workers’ emotional connection with their jobs, Towers Perrin found that while financial rewards are important, true job satisfaction is more personal. It’s about how well workers like their colleagues, if they’re recognized for the work they do, if they have the time and resources to do a good job, if they feel respected.

Not surprisingly, some of the companies offering above-average benefits also pay attention to the softer issues of employee culture.

Owen Media’s open-dog policy is part convenience (many employees have dogs), and part design.

"We work in a world of deadlines and deliverables," owner Paul Owen said. "Dogs are very relaxing. They humanize the office in ways that inspirational posters and employee activities can’t do."

No jerks allowed

The Seattle law firm Perkins Coie earned a spot on Fortune’s 100 Best Companies to Work For list this year in part because of one driving principle: no jerks allowed.

The firm offers lots of benefits beyond the usual medical and vacation: a two-month paid sabbatical; an annual bonus of 5 percent for all employees; an annual retirement contribution of 7.5 percent of the worker’s salary; quarterly raffles that allow staffers to win such things as free airline tickets.

Yet what keeps many of its 1,400 employees loyal (it has 14 offices in the United States and Asia) is the firm’s culture, which emphasizes teamwork over star power.

"We have a culture of respect," said Mike Reynvaan, a partner who’s been with the firm nearly 20 years. "It doesn’t mean that everyone’s equal, but it means that everyone’s important."

If a colleague needs help on a particular case, others in the firm must respond within two hours and treat the request with the same importance as they would a paying client.

The partners’ commitment to the no-jerk rule has been tested. Reynvaan and managing partner Bob Giles were intrigued by one job candidate, a money maker from a respected firm. By the time the interview was over, however, the partners knew he wouldn’t fit.

"We looked at each other and said, ‘What a jerk,’ " Giles said.

"Only we didn’t use that word," Reynvaan added.

Sentimental attachment

The connection between employee loyalty and their emotional commitment may be most evident at Edward Jones, the St. Louis-based stockbroker with 228 offices in the Puget Sound area. In an industry where money talks, testimonials from Edward Jones employees are surprisingly sentimental.

Many mention the company’s almost patriarchal role in times of personal crisis. It has paid for funerals, covered travel expenses for an employee with a sick relative, and once held a fund-raiser to buy a special van for a broker who had become a paraplegic.

Duane Covey, a former Nordstrom manager who set up an Edward Jones office in Seattle 10 years ago, recalled when a competitor tried to lure him away, offering four times his yearly salary as a signing bonus.

Covey, 48, dropped any idea of leaving when his son died accidentally at age 21. The tragedy prompted Covey to reevaluate his life and his work. He considered how an Edward Jones executive attended his son’s funeral.

"You can’t buy loyalty and you can’t buy caring," he said. "It’s nice to work for a place where you matter."

Shirleen Holt: 206-464-8316 or [email protected]

Copyright © 2003 The Seattle Times Company

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