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of total compensation, most companies look carefully at the cost/bene¬t
equation and carefully consider the needs of their current and desired labor
pool according to its demographic make-up.
Here is a breakdown of some of the most popular employee bene¬ts as
reported by the Society for Human Resource Management (SHRM) in its
latest annual bene¬ts survey, showing the percentage of surveyed compa-
nies offering each bene¬t in 2003 compared with 1999:23

Family-Friendly Bene¬ts: 2003 1999
Dependent-care ¬‚exible spending account 71 percent 65 percent
Flextime 55 percent 54 percent

The 7 Hidden Reasons Employees Leave

Family-Friendly Bene¬ts: 2003 1999
Compressed workweek 31 percent 26 percent
Job-sharing 22 percent 22 percent
Elder care referral service 20 percent 14 percent
Child care referral service 18 percent 15 percent
Adoption assistance 16 percent 14 percent

Health Bene¬ts:
Prescription drug program coverage 98 percent 93 percent
Life insurance 98 percent 97 percent
Dental insurance 96 percent 93 percent
Preferred Provider Organization 87 percent 81 percent
Mental health insurance 76 percent 78 percent
Vision insurance 71 percent 64 percent
Flexible medical spending account 70 percent 65 percent
Employee assistance program 67 percent 64 percent
Wellness programs 57 percent 57 percent
Health Maintenance Organization 54 percent 65 percent
Health care premium ¬‚exible spending account 52 percent 50 percent
Long-term care insurance 47 percent 36 percent
Well-baby program 42 percent 47 percent
Health screening programs 40 percent 49 percent
Smoking cessation program 32 percent 32 percent
Fitness center subsidy or reimbursement 31 percent 23 percent
Accelerated death bene¬ts (for terminal illnesses) 33 percent 23 percent
Retiree health care bene¬ts 30 percent 42 percent
Prenatal program 27 percent 35 percent
Weight loss program 24 percent 23 percent
Onsite ¬tness center 22 percent 20 percent
Stress reduction program 21 percent 21 percent

Personal Service Bene¬ts:
Seminars, courses, conferences 93 percent 94 percent
Professional memberships 85 percent 85 percent
Casual dress one day per week 58 percent 56 percent

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Family-Friendly Bene¬ts: 2003 1999
Casual dress every day 44 percent 44 percent
Food services/subsidized cafeteria 26 percent 38 percent
Legal assistance services 25 percent 17 percent
Dry-cleaning services 13 percent 12 percent
Massage therapy services 11 percent 8 percent
Self-defense training 6 percent 7 percent
Concierge services 2 percent 4 percent

Leave Bene¬ts:
Paid holidays 98 percent NA
Paid bereavement leave 91 percent 93 percent
Paid jury duty 90 percent 95 percent
Long-term disability 88 percent 89 percent
Paid vacation 87 percent 95 percent
Short-term disability 81 percent 78 percent
Paid sick leave 76 percent 87 percent
Paid time-off plan (sick, vacation, personal) 68 percent 35 percent
Paid personal days 40 percent 57 percent
Unpaid sabbatical program 19 percent 19 percent
Paid maternity leave not covered by short-term
disability 14 percent 51 percent
Paid paternity leave 12 percent 12 percent
Paid sabbatical program 6 percent 6 percent

Financial Bene¬ts:
Full ¬‚exible bene¬ts plan (formerly cafeteria plan) 23 percent 24 percent
Parking subsidy 12 percent 13 percent
Onsite check cashing 12 percent 14 percent
Transit subsidy 12 percent 10 percent
Carpooling subsidy 4 percent 5 percent

Business Travel:
Employee keeps frequent ¬‚yer miles 74 percent 90 percent
Paid long distance calls to home while on travel 71 percent 77 percent
Compensatory time given for travel time 25 percent 23 percent

The 7 Hidden Reasons Employees Leave

Family-Friendly Bene¬ts: 2003 1999
Paid dry cleaning while on travel 24 percent 30 percent
Paid health club fees while on travel 5 percent 9 percent

Housing and Relocation Bene¬ts
Temporary relocation bene¬ts 44 percent 45 percent
Spouse relocation assistance 21 percent 21 percent
Cost-of-living differential 21 percent 20 percent
Rental assistance 15 percent 9 percent
Mortgage assistance 12 percent 9 percent

Much of the decrease in the percentages was due to belt-tightening as
a result of the slumping economy during the intervening years, and the fact
that 1999 was the peak of the talent-war years. If the war for talent returns
again, as many predict, the percentages are likely to go up in most bene¬t
It is worth noting that many new bene¬ts were reported in 2003 that
were not even surveyed by SHRM in 1999, such as: infertility treatment
coverage (41 percent), telecommuting on part-time basis (34 percent), un-
paid release time for volunteering (24 percent), domestic partner bene¬ts
(23 percent), spot bonuses (22 percent), travel planning services (20 per-
cent), scholarships for members of employees™ families (19 percent), paid
release time for volunteering (17 percent), telecommuting on a full-time
basis (17 percent), grief recovery program (14 percent), time bank of vaca-
tion leave that can be donated to other employees (13 percent), free or
discounted Internet service (12 percent), nutritional therapy (11 percent),
onsite medical care (11 percent), loan to employee for purchase of personal
computer (8 percent), free computer for personal use (5 percent), already
prepared take-home meals (2 percent), and ˜˜boomerang™™ bonus to rehired
employees (2 percent).

For a copy of SHRM™s latest yearly bene¬t survey, which also in-
cludes comparison data based on company size, industry, and geo-
graphic areas, visit their Web site: www.shrm.org.

Over the past several years, dozens of companies have conducted inter-
nal cost-bene¬t studies, which tend to link work-life programs to improved

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employee satisfaction, productivity, and attendance. Washington-based
Fannie Mae, with 4,000 employees, conducted a study of its elder care
services to evaluate the cost-bene¬t of having hired a full-time clinical
social worker. In the ¬rst two years on the job, the elder-care director saw
10 percent of employees, which equates to about $3.5 million per year in
avoided lost productivity due to elder-care responsibilities.24
First Tennessee National Corporation of Memphis, which has been
honored for its pioneering work-life programs, found that since introduc-
ing ¬‚exible hours, it reduced its response time to customer requests at its
operations centers to four days from ten days. The cost savings were neu-
tral, but customer satisfaction was increased, and employee retention rates
were twice that of of¬ces where managers were less supportive of ¬‚extime.
The biggest ¬nding was that customer retention rates were 7 percent
higher in the of¬ces with ¬‚ex-time.25
New York-based ¬nancial services company, Deloitte & Touche, esti-
mates that the ¬‚exible work arrangements it provides to its 30,000 U.S.
employees helped the ¬rm avoid $41.5 million in turnover-related costs in
2003 alone.26
Even during a long-term economic slump, most companies were will-
ing to risk eliminating the very programs they have positioned as marquee
items in their campaigns to brand themselves as good places to work. Many
companies”such as Xerox, Charles Schwab, PriceWaterhouseCoopers,
Lucent Technologies, and Sara Lee”kept their work-life programs intact
during major layoffs.27 Many other companies certainly have realized that
maintaining bene¬ts and services is even more important when they are
asking their employees to work harder because of cutbacks.
Reducing stress and overwork is not all about providing formal bene¬ts
and services; it™s also about creating an informal culture where executives
and managers are thinking about what they can do for their employees, at
least as much as they are about what those employees can do for the com-
pany™s customers.

Engagement Practice 48:
Tailor the ˜˜Culture of Giving™™ to the Needs of Key Talent
Selecting the kinds of bene¬ts and work-life services to offer workers is not
simply a matter of looking at bene¬t surveys and matching what other
employers provide. The fact is that you may not be able to afford the kinds
of bene¬ts that other companies in your community provide, and yet you
must still compete with them for the available talent. This means you must

The 7 Hidden Reasons Employees Leave

¬gure out a way to compete for talent that is more cost-effective, so instead
of offering onsite child care, you might choose to focus on recruiting,
selecting, and training managers so they will manage people with respect
and caring.
The other key to selecting the right bene¬ts and services is matching
them to the needs of your applicant pool and your current employees.
Consider the case of Financial Associates, a 25-year-old insurance broker-
age ¬rm that employs twenty-¬ve people. The owner, Charles Stumpf, is
a veteran in the insurance business, and understands how competitive it
can be. That is why he resolved to treat employees in such a way that they
would not want to leave. ˜˜I made the conscious decision,™™ he said, ˜˜to
treat the people around me as family, not employees.™™ So he put several
practices into place that he thought would accomplish that end, including
keeping records of employees™ birthdays and hiring anniversaries and send-
ing them cards on those special occasions, providing treats in the company
kitchen, and putting signs on staff of¬ce doors in recognition of their ac-
Stumpf also thought about the fact that several of the women who
work at Financial Associates have school-age children and some of them
would prefer to work part-time. So, he tailored a nontraditional work
schedule to accommodate their needs. Working mothers are allowed to
arrive a little later in the morning so they can be home when their children
leave for school. Others come in earlier in the morning so they can get
home and be with their children at the end of the school day. Stumpf also
worked it out so employees wanting part-time work could share the same
jobs. He points out that one employee who works three days a week is one
of his most productive workers.
When Stumpf made up his mind to move to a new location, he asked
his employees what was most important to them in an of¬ce location.
Their answer was, access to a major interstate highway and windows that
opened. He asked them what features they wanted in a break room, and
throughout the of¬ce, and he put them in place. The new of¬ce had a
kitchen, and access to a patio with picnic table, grill, and a telephone jack.
Stumpf also recalled that, early in his own career working for a trucking
company, he always worried about whether he would have enough money
to take along on a trip, so he gives employees a cash bonus before they go
on vacations. He also gives them extra days off around the holidays.
As you might imagine, employee turnover is not an issue at Financial
Associates. Stumpf knows he has saved time and money by maintaining a
stable workforce. ˜˜When you have to hire and retrain people, you know

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they won™t know their jobs for a year, and that™s time lost,™™ he said. ˜˜By
treating your people so they want to stay, you don™t have to go through
that cycle.™™28

Know Your Workforce!
The key is understanding the needs of the workforce. One of the best
known examples of this is SAS Institute, Inc. in Cary, North Carolina,
where CEO Jim Goodnight has built one of the most successful software
companies in the world by giving the right things to the right people.
Goodnight knew that every other major software company gave stock op-
tions to its employees, yet he chose not to offer them. He knew that most
other software companies offered extraordinary salaries, yet he decided to
offer salaries that were merely competitive. Goodnight also knew that the
work pace and style in most software companies was crazy and frenetic, so
he deliberately set out to create a sane and relaxed campus environment.
What Goodnight understood was that there were hundreds of talented
software professionals who were more interested in a sane working envi-
ronment and some semblance of balance between life and work. So that is
what he created. At SAS, there is no limit on sick days. SAS operates the
largest onsite child-care center in the state; a 3,600-square-foot company
gym; tennis and volleyball courts; soccer and softball ¬elds; massages; classes
in yoga, African dance, and tai chi; ping pong and billiards; a ten-lane
swimming pool; casual dress; art on every wall; piano music playing in
the cafeteria where meals are free; a full-time elder-care coordinator; free
immunizations; and work hours dictated by the fact that the company gates
don™t open until 7 .., and close promptly at 6 °.. Yet, the company™s
environment is anything but lax”the work culture is built on accountabil-
ity and results.
By its own calculations, the company saves $67 million per year in
avoided turnover costs due to the fact that it maintains a 3 percent turnover
rate in an industry that averages 20 percent turnover. This means the com-
pany can afford to keep adding new bene¬ts, which it does on a regular
basis. The strategy is working. SAS Institute, Inc. has carved out a
niche”an employment brand”by creating a work environment unlike
any others in its industry. In so doing, the company has become a magnet
for talent, especially Generation Xers who value a saner, more balanced life
and tell stories of turning down higher salaries to come to work for SAS.29
Whether your company surveys the workforce yearly, as SAS does, or
simply asks employees face-to-face, the key is to ask. Smart companies


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