As recession risks rise, business owners are looking for places to cut costs. Employee benefits can be a tempting goal. But getting your employees to do well can have a huge impact on your performance, especially in this tight job market.
In a recent Inc. town hall streaming event, a panel explored how prioritizing employee happiness can grow your business. Among the panelists was Sarah Hardy, co-founder and CEO of baby formula company, Bobbie. Paul McCarthy, Chief People Officer of hosting software provider SevenRooms. and Kara Hogenson, senior vice president overseeing group benefits at Principal Financial Group. Principal Financial Group sponsored the panel, which it moderated Inc. executive editor Diana Ransom;
The team had this advice for business owners who want to implement effective programs, wherever you are in the business cycle.
1. Focus on return, not price.
While generous benefits may seem like a burdensome expense, it pays to keep a long-term perspective, Hardy says. “Where business leaders go wrong is they look at the cost of benefits and programs and have a hard time justifying the cost,” he says. “We’re taking a step back and looking at what we’re getting in return across the business.”
When her company overhauled its parental leave policy last year, the return on its investment was clear. “We immediately saw an uptick and the caliber of talent coming into our recruiting pipeline,” he says.
2. Don’t be afraid to make changes.
Companies can waive certain privileges. As your business expands, McCarthy says, it’s important to keep revisiting your benefits package and making sure it’s still relevant to your employees.
“Watch your company demographics 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 past three years, SevenRooms has grown to 240 employees from about 70. To get a better sense of what the expanded team valued, the company began offering a flexible stipend earlier this year. The program allowed employees to spend the money in a variety of ways, such as child care fees or gym memberships. McCarthy noted the way people used the money.
“It was a rich insight,” he says. Data from these kinds of pilots can help you understand which benefits will have the biggest impact across the company, he says.
Changing employee benefits can feel like a risk. Don’t be afraid to throw out any new policies that aren’t working, Hardy says. “I don’t know sometimes if these things will stick,” he says. “We’re constantly on the front lines asking: This thing that came out even six months ago, does it still make sense? Did it scale?”
3. Don’t forget the managers.
Benefits aren’t effective if your employees don’t know how to access them. Hardy says it’s important for founders to invest in people, who will answer most of the questions. Make sure they are ready to give answers. At Bobbie, she discovered that most employees turn to their customer for everything else: their manager.
“Too often, managers are forgotten,” says Hardy. “At the end of the day, it’s the manager who creates that experience. More often than not, it’s not an HR manager somewhere. It’s not a PDF of your policy.”