MYOB
THE EMPLOYEE
BENEFITS
BALANCING ACT
What to offer? How much to spend? It all depends
on what’s important to your employees, the size of
your purse, and your ability to be creative with perks.
By Samuel Greengard
Illustration by Leo Acadia
OR SMALL AND MIDSIZE BUSINESSES (SMBs), recruitment and retention strategies loom large. Yet transforming a plan into action can often
prove tricky. While a generous salary may
catch the eye of a bright prospect and opportunities for
advancement may factor into an individual’s choice
about where to work, the decision to join a company
and stay on for an extended period usually comes down
to a key issue: benefits.
“It’s essential to have a well-defined benefits strategy in place and know what you’re trying to achieve,”
says Catherine Furco, office practice leader for group
and health care benefits in the San Francisco office of
human resources consulting firm Watson Wyatt Worldwide, headquartered in Washington, D.C. “How an organization structures a program impacts who it attracts
and how effectively it retains talent.” To be sure, a good
program can create a competitive advantage while a
poorly designed one can leave a company vulnerable.
But determining which benefits to offer and procuring cost-effective services can prove challenging. There
are numerous options—including health insurance, retirement planning, stock options, vacations, personal
days, and various perks (from pizza parties to subsidized vehicles)—that a company might offer to sweeten
the pot. According to John Asencio, a senior vice president at Sibson Consulting in New York City, upfront
planning and ongoing analysis can help an organization
transform goals into results.
HEALTHY OPTIONS
For many SMBs, deciding how to structure a benefits program is a daunting proposition. For one
thing, it’s difficult to compete with large companies.
“Large organizations have greater purchasing power
to drive lower prices, and they’re able to afford more
benefits than a smaller company,” Asencio says. For
another, SMBs often find themselves growing rapidly, and they must restructure programs often. “
Unless there is a great deal of scalability and flexibility
built into a benefits program, it can become outdated quickly,” he adds.
It’s also wise for an SMB to play on its strengths,
such as offering employees less bureaucracy and more
say in decision making, and a greater stake in outcomes
and profits. Asencio says that an organization must pay
attention to several key issues when developing a strat-
