As recession risks increase, business owners are looking for places to cut costs. Benefits can be a tempting target. But the success of your employees can have an outsized impact on your bottom line, 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. Panelists included Sarah Hardy, co-founder and COO of infant formula company, Bobbie; Paul McCarthy, director of human resources at hotel services software provider SevenRooms; and Kara Hogenson, senior vice president overseeing benefits at Principal Financial Group. Principal Financial Group sponsored the panel, which was moderated by Inc. 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.
Although generous benefits can seem like a big expense, it pays to keep a long-term perspective, says Hardy. “Where business leaders go wrong is that they set the cost of benefits and programs, and they have a hard time justifying the cost,” she says. “We take a step back and look at what we’re getting back across the business.”
When her company revised its parental leave policy last year, the return on investment was clear. “We immediately saw an uptick in the caliber of talent coming into our recruiting pipeline,” she says.
2. Don’t be afraid to make changes.
Companies can exceed certain benefits. As your business grows, McCarthy says, it’s important to keep reviewing your benefits package and making sure it’s still relevant to your employees.
“Look at your business demographics as you scale to see what needs to change,” McCarthy says. “Stay close to what people are talking about and what matters to them.”
Over the past three years, SevenRooms has grown from approximately 70 to 240 employees. To get a better idea of what the extended team enjoys, the company started offering a flexible allowance earlier this year. The program allowed employees to spend the money in a variety of ways, such as childcare costs or gym memberships. McCarthy took note of how people deployed the money.
“It was a wealth of information,” he says. Data from these types of pilot programs can help you determine which benefits will have the greatest impact enterprise-wide, he says.
Changing employee benefits can seem like a risk. Don’t be afraid to reject any new policy that doesn’t work, says Hardy. “I don’t know sometimes if these things are going to stick,” she says. “We’re constantly at the forefront of asking ourselves: This thing that we rolled out even six months ago, does it still make sense? Is it at scale?”
3. Don’t forget the managers.
Perks 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 questions. Make sure they are ready to provide answers. At Bobbie, she found that most employees went to their single point of contact 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. Most of the time, it’s not an HR administrator somewhere. It’s not a PDF with your policy.”