As recession risks increase, business owners are looking for places to cut costs. Employee benefits can be a tempting goal. But doing well by your employees can have an overall impact on the bottom line, especially in this tight job market.
In a recent Inc. City Hall streaming event, a panel that explored how prioritizing employee happiness can grow your business. Panelists included Sarah Hardy, co-founder and chief operating officer of infant formula company, Bobbie; Paul McCarthy, head of hospitality services, software provider SevenRooms; and Kara Hogenson, senior vice president overseeing group benefits at Principal Financial Group. Principal Financial Group sponsored the panel, which was moderated by Inc. managing editor Diana Ransom.
The group had this advice for business owners looking to implement effective programs, no matter where you are in the business cycle.
1. Focus on the return, not the price tag.
While generous benefits may seem like a burdensome expense, it pays to take a long-term perspective, says Hardy. “Where business leaders go wrong is they stare at the cost of benefits and programs, and they have a hard time justifying the cost,” she says. “We’re taking a step back and we’re looking at what we’re getting back for the whole business.”
When her company revised its parental leave policy last year, the return on investment was clear. “We immediately saw an increase and the talent coming into our recruiting pipeline,” she says.
2. Don’t be afraid to make changes.
Businesses can grow from certain advantages. As your business expands, McCarthy says, it’s important to keep looking at your benefits package and make sure it’s still relevant to your employees.
“Look at the demographics of your business as you scale to see what needs to change,” says McCarthy. “Stay close to what people are talking about and what matters to them.”
In the last three years, SevenRooms has grown to 240 employees from approx. 70. To get a better sense of what the extended team valued, the company began offering a flexible stipend at the beginning of this year. The program allowed employees to spend the money in a variety of ways, such as on childcare fees or a gym membership. McCarthy noted how people distributed the money.
“It’s been a wealth of insight,” he says. Data from these types of pilot programs can help you determine which benefits will have the greatest impact on an enterprise-wide scale, he says.
Changing employee benefits can feel like a risk. Don’t be afraid to throw out new policies that aren’t working, says Hardy. “I don’t know sometimes if these things are going to last,” she says. “We’re constantly at the forefront asking ourselves: This thing that we rolled out ourselves six months ago, does it still make sense? Has it scaled?”
3. Don’t forget leaders.
Benefits are not effective if employees do not know how to access them. Hardy says it’s important for entrepreneurs to invest in the people, who will ask most of the questions. Make sure they are prepared to give answers. At Bobbie, she has found that most employees take their point of contact for everything else: their manager.
“Too often the leaders are forgotten,” says Hardy. “At the end of the day, it’s the manager who creates that experience. Most times, it’s not an HR administrator somewhere. It’s not a PDF of your policy.”