Yesterday, we talked about how to compensate good employees. I argued that you should pay them more slightly more than the fair market rate. Today, Id like to talk about what else you have to do to keep and please them. Lets start by stating the obvious: Paying them 10% more than your competition pays is not going to make them stay with you if they dont like anything else about the job.
So what are “the other things”?
The best-known and most important is certainly your health insurance program. Many people, especially those with new or young families, consider a good health plan mandatory.
Health care is not cheap. But its not going to break you either, so long as you are staffing your business with people who work harder and more efficiently than the norm. My advice is to spend on health the way you spend on salaries – around the top of the range, plus or minus 10 percent.
I dont like co-payment plans. I think you should foot the bill if at all possible. That said, there are situations in which you are going to have to establish limits. When, for example, your people want a variety of benefits and you decide to give them a shopper’s choice.
When it comes to holidays, you have to provide whats expected. In the USA, thats generally 10 days a year.
Vacation is a subject that merits its own ETR message. For the time being, lets just say that you should be reasonable.
That leaves the fluffy stuff like child care and school credits.
You dont need to provide those types of benefits. The truth is that most workers dont use them very much — and dont appreciate them whether they use them or not. But if you can afford to provide them, I think you should. For me, the issue is simple: Your employees – and most especially your good employees – help you succeed. When success is good, you should share the wealth.
In summary, make sure your standard benefits are equal to what your employees might get elsewhere and dish out fringe benefits whenever you can afford to. Do that and make your people feel that they have a stake in the success of your business and you will not have to worry about losing employees because they feel like they are being taken advantage of.
But is that enough to keep them? Are slightly-better-than-average compensation, average standard benefits, and “if-you-can-afford-to” fringe benefits enough to keep and please the good people?
In a word, the answer is NO. Tomorrow, well talk about what else you need to offer — including the most important benefit you can give a good employee.