Caterer Joann Roth, founder of Tarzana, Calif.-based Someone's in the Kitchen, came to Special Events Mag-azine with a question. She values her employees and wants to offer them benefits that they will value. We asked compensation and benefits specialist Laura Conover of Chino Hills, Calif., to review Roth's benefits and offer advice. You may find some ideas to suit your taste, too.
COMPANY PROFILE In business 19 years, Someone's in the Kitchen has 35 full-time employees and a roster of some 150 per-diem workers such as waiters and bartenders. The company's sales average about $3 million annually.
Besides paying competitive wages, Roth offers a wide range of benefits to her employees. After six months of employment, the company picks up half the cost of the employee's medical coverage. The company pays the full cost after one year.
Employees receive a week of paid vacation after their first year of employment, two weeks after two years and three weeks after six years.
Employees may take six days of paid sick leave a year. Personal leave time is available after six months.
THE CONSULTANT'S ADVICE Conover says that Roth's employee benefits package of competitive pay plus benefits passes the test "with flying colors. She's ahead of what I've seen for other employers of her size."
Conover points out that Roth's benefits package yields a tangible return. "Her turnover is low-many of her employees have been with her from eight to 10 years," she says. "Also, clients call her and say, 'We love your people-I want the same manager for my event next year.' Unhappy employees don't serve clients that well."
Conover has some suggestions for additional benefits for Roth to offer, including some form of retirement plan that employees could contribute to-whether or not the employer makes a contribution, as in a 401(k) plan. Conover also suggested moving to a paid-time-off policy (see sidebar). "But Joann told me that her people don't use all the sick time they have now, so she may not need it."
Conover says that Roth's package strikes the proper balance. Even though the strong economy means good employees are hard to find, "you can't be a cosmic Santa Claus throwing money and other benefits at your people that are not based on what they do or sales they bring in," Conover says. "Paternalism buys nothing but trouble. When you finally have that down-year, your employees simply won't understand. They will think of everything they have received in the past as an entitlement."
THE EMPLOYER'S PHILOSOPHY Roth's benefits policy grew directly out of her own workplace experience.
"If you touch that place within yourself where you know what you want for yourself and for your family, it all becomes very simple," she says. "Our employees want the same things we want. When they are sick, they want to know they have health insurance. They want to know they have a retirement plan for when they grow old."
She agrees with Conover that a good benefits package pays, saying, "Happy people do a good job." After one longtime employee got married and had a baby, "she took off 18 months, then came back to work here with a flexible schedule. These are small things we give her, yet we get it back a hundredfold."
Roth believes that well-designed benefit plans will advance the special event industry. "We're still in our infancy and in some ways a little shortsighted. Many of the people who come to our industry have a lot of creativity, but they aren't grounded. If we can offer them legitimate pay and benefits, they can become real contributors to our organizations."
Conover concludes: "It starts at the top. If your employees aren't treated well, given chances to grow and learn, public praise, and thanks for putting forth extra effort, then it doesn't matter if you buy them a health plan or a dental plan or vacation time."
According to compensation and benefits specialist Laura Conover, any company that expects to attract and retain qualified, competent people must offer: 1) Base pay rates for each job that are competitive based on the industry and the company's size and location, and 2) A company culture that fosters professional growth and provides ways for people to be recognized for above-average effort and contributions to company goals. "If these two items are in place, then adding benefits of various types helps further communicate to employees that the owners and management of a company care about them," Conover says. Some benefits to consider:
Medical insurance coverage for employees and possibly their families. Dental and vision coverage are other options.
Retirement benefits, such as 401(k) plans, defined benefit plans or profit-sharing plans.
The option of using pre-tax dollars to pay for medical, child care and transportation expenses via Flexible Spending Accounts.
Paid vacation and sick leave, but in a new format. "Grouping vacation and sick time allocations into a PTO-paid time off-account for each employee is becoming very popular with employers," Conover notes. "This eliminates the need for the employer to 'police' the reasons for an employee's absence. And study after study shows that PTO policies cut down on the number of days lost to 'sick' employees."
Additional insurance such as life, short-term and long-term disability, and accidental death and dismemberment coverage. The group rates that employers can offer are normally much lower than what individuals can purchase on their own.
With a Flexible Benefit Account, all the employee's benefit dollars are lumped together, and the employee can then choose how much of each benefit to purchase. For instance, a single employee might want more vacation time and less medical coverage than a married employee with three children. Under these accounts, an employee can also "buy" more of any benefit via payroll deductions.
Other benefits that can be offered on a per employee/per month charge include prepaid legal assistance and access to Employee Assistance Programs. In EAPs, employees may be referred to counselors for psychological counseling, help with substance abuse, and even resources for elder and child care.
Note: Once an employer offers benefits such as paid time off or medical insurance, these will be subject to state and federal regulations. For help in designing a benefits package, contact your insurance broker or a benefits consultant. To boost workplace morale at low cost, Conover recommends two books: 1001 Ways to Reward Employees by Bob Nelson and 301 Ways to Have Fun at Work by Dave Hemsath and Leslie Yerkes.