Minding Your Business: Aug. 2001, A Bagful Of Benefits

Company owners who want to hold on to their employees are wrapping up benefits bundles of insurance, 401(k) and savings plans, and tying on perks like vacation days, flex time and performance-based profit sharing incentives.

Finding qualified labor is a strain in today’s market, and benefits programs can attract and keep employees, said Jeff Bowen, president, Images of Green, Hobe Sound, Fla. "Anything that keeps my employees is worth it to me," he noted.

COVERING INSURANCE. Covering the cost of medical, health and life insurance can burden a business’ bottom line. Some small businesses cannot afford to pay 100 percent of their employees’ benefits, especially with rising insurance rates, explained Chris Raimondi, Raimondi Horticultural Group, Ridgewood, N.J.

"The most difficult part is to manage the employees’ needs against competitive pricing," he said. "I would love to give all the employees all of the benefits possible and then some, but that would affect our bottom line to the point where we would have to increase our prices."

Raimondi covers 100 percent of his employees’ long-term disability and group life insurance – a $25,000 policy he offers those who work more than 30 hours per week. However, he covers only a portion of healthcare costs, which he said are a "killer, so we can’t pay much for a single rate."

In addition, employees can participate in a savings plan similar to a Roth IRA where the company deducts money after taxes and puts it into an account that can be invested in stocks, bonds and aggressive money markets. And since Raimondi’s company belongs to the New Jersey Business and Industry Association, his workers realize discounts up to 20 percent on premiums for car, renters’ and homeowners’ insurance.

"Our program is fairly competitive and we’ve added these other minor perks – the discounts – and customized the benefits to do as much as we can and still afford what we have," he noted, adding that the benefits surpass an individual’s term of employment. "Even if an employee leaves we really try to show we care, and they can continue their life insurance through the company forever. Same with the savings plan."

Affording these benefits is a concern with escalating costs – constant changes, amendments and extra fees add up to extra dollars, Bowen added. But the value of benefits cannot be taken lightly, he reminded. He covers 100 percent of his salaried employees’ dental, medical and life insurance and offers a 401(k) program, long-term disability insurance and simple IRAs, even though these benefits are becoming a stretch, he said.

"The prices increase on a normal basis, and the more this continues, the more I wonder whether or not the employees should contribute to the program," he admitted. But Bowen knows that his employees value his full-coverage program, and he emphasizes the importance of keeping it that way. "I try to do everything I can to keep an employee, from offering benefits to 401(k) to the bonuses to training programs."

SHOP AROUND. Choosing an insurance provider that offers a comprehensive physician list, prescription coverage and bearable premiums can be a challenge. "Shop around," Raimondi advised. "The swings in fees we saw when we shopped were incredible."

Raimondi suggested gathering information from local and national trade organizations. "There is safety in numbers," he noted. "There is better cost efficiency by getting into larger groups."

Bowen also comparison shopped before instituting his benefits program, however he looked at other businesses to see what they offered employees. "I didn’t compare on company size, but on what I was seeing and hearing about how larger companies were keeping their employees," he explained. "Some of the things that fell into place are because of following the example of others."