The Employee Benefits Divide

There are immense divisions in US society:ben_franklin

  • Rich versus poor
  • More educated versus less
  • Old versus young (ageism lives)
  • Urban versus rural (fading since most people live in urban areas, but still very real)
  • Ethnic and racial

We can add big employer versus small business to the list.

Large employers are adding benefits for employees that small businesses simply can’t afford.

American Express announced an increase in paid parental leave to five months with added surrogacy and IVF benefits, and Ernst & Young expanded parental leave from three to four months for parents of all genders and added adoption, fertility and surrogacy benefits.

Basically, if you have fertility issues, it really pays to work for one of these large financial services firms.

The larger division is a shift in focus in large companies from the cost of benefits to the total well-being of the employee. That shift has benefits for these companies in terms of worker retention and productivity.

Small companies pay a price for their focus on cost in terms of employee turnover, learning curves for new employees that affect productivity, and errors that affect customer relationships. However, they simply can’t afford some of the benefits that large companies can offer. Nor do they get the favorable pricing for benefits that insurers give to their largest clients.

The size divide isn’t clean. There are small companies that recognize how important their employees are.  I know of one diner (a class of eatery for which New Jersey is famous) that offers a good benefits package to staff, but that’s unusual in food service establishments.

Conversely, large retailers tend to treat employees as replaceable. In one recent study by the ACSI, retailers closing stores were seeing improvements in customer satisfaction ratings. My guess is the stores that were  under-performing had the lowest individual store ratings for customer satisfaction, but the ASCI data aren’t sufficient to address that.  Why not? Minimum wage employees with limited benefits and no career path aren’t motivated to deliver for customers. People do what they are incented to do.

What you need to consider:

  • Students need to think about the kind of company for which they will work in the future.  College is less optional if benefits matter.
  • Small businessmen need to get creative about ways they can invest in employees. The old mentality that “having a job is sufficient motivation” is simply a way to guarantee mediocre staff. Good people can always find another job. When there is turnover, the best are the first ones out the door.

Sources:

  1. Ann Clark, “Top 5 best work benefit trends for 2017,” BenefitsPro, 6 March 2017. http://www.benefitspro.com/2017/03/06/top-5-best-work-benefit-trends-for-2017?kw=Top+5+best+work+benefit+trends+for+2017&et=editorial&bu=BenefitsPRO&cn=20170312&src=EMC-Email_editorial&pt=Benefits+Weekend+PRO&t=employee-paid&page=2
  2. American Customer Satisfaction Institute, “ACSI: Retailers Improve Customer Satisfaction Amid Store Closings,” 28 February 2017. http://www.theacsi.org/news-and-resources/press-releases/press-2016/press-release-retail-2016

 

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