Posted: by HRNasty in Company Culture, Strategic HR, What HR Really Thinks

Company Culture

Is your benefit plan reinforcing company culture?

Company Culture

This week’s blog post is about company culture and the nuance of reinforcing the culture via benefits. Before you roll your eyes and click to another kickass HR blog post like a couple of my favorites: Dominique at HRGalFriday or my HR brother in crime, Will Thompson Jr., over at Bullseye Recruiting, hold your left click index finger for just a minute.

Every employer says they have company culture, but this post will give you insight into the kind of company you are REALLY working for. And if you think your company culture is transparent, then check Brad Feld’s post. Brad is a personal superhero who takes culture and transparency to a whole other level here.

As many readers know, I work in a tech startup. I worked in corporate America for 10 plus years and feel I have a pretty good idea for the range of different company cultures. Thankfully, I can say I haven’t worked in any real shitholes.

Company Culture

Dohhhh! Did I just say that?

Every company brags about their culture. Every HR person and CEO says “we have a great culture”, “we invest in our employees”, or the famous “our employees are this company’s most valuable asset.” Whether it is an old school bank, a used car lot, or a fast growing profitable tech startup, every company has similar sentiments and in most cases sincerely mean what they say. I preached all of the above when I worked in corporate America and I say the same thing now in a small tech company. I believe in both environments and learned a lot from both. I wouldn’t be where I am today, and appreciate my tech experience, without my corporate experience.

I know, “Get on with it already culture-boy!”

This past month, I have been rolling out a 401K, and it is my hope that the way we are introducing this benefit will reinforce our company culture — a culture that believes in the team members. The company didn’t have a 401K in place the first few years and for good business reasons. We couldn’t afford the cost involved, preferring to put the resources into developing our company product. The first few years we were growing the company by bringing on less experienced employees and the need for a 401K wasn’t a priority for this demographic. The number 1 attraction as an employer wouldn’t be a 401K, but intangibles like long hours, impossible tasks and unlimited 4-hour energy drinks. As we have grown in size, revenue, and maturity, the company’s needs have changed. We can now afford to bring on senior employees, many of whom have families. A few of our original hires are expanding their families with children and some are going back for seconds. The need for a 401K is becoming a higher priority.

Because of prior relationships, we were lucky enough to find a broker that would work with a small startup. This broker usually dealt with larger more traditional companies and we soon learned that we would be the one and only startup in their portfolio. One of the questions that was asked when we were setting up the 401K was, “When will an employee be eligible for the 401K program? Would it be after 6 months of employment? After 1 year?”

The broker was pushing for a 6-month minimum tenure before an employee would be eligible and I pushed for day one eligibility. We eventually settled on 90 days. In the back of my mind, my HR Spidey sense were going off and I just couldn’t figure out what was wrong with the situation.  There were a lot of factors going on with this roll out and I just couldn’t put my finger on what was bothering the Peter Parker in me.

The next day, it dawned on me. I really didn’t like the 90-day tenure requirement before an employee would be eligible for the plan. I wanted them to be eligible on day one. Granted we aren’t going to match on day one, but I wanted the employees to have access to a savings plan.

I talked to the broker about this and they pushed back. The broker’s attitude was that if an employee didn’t make it in the first 90 days, or quit, then I would be doing a lot of cancellation paperwork. And therein lay the rub.

I appreciate the broker looking out for the company and my time, but at the end of the day, we are not hiring employees so that we can withhold their benefits until they prove they are worthy. I wouldn’t extend an offer unless I had 110% confidence in the candidate and I am pretty sure it is the United States legal system that was built upon the foundation that everyone is “innocent until proven guilty.” This 6-month to 1 year anniversary date would just be a probation period disguised as a celebratory anniversary.

If I believe in a candidate enough to extend an offer, then I believe enough in them to start their medical, dental, vision and their 401K as soon as the paperwork allows.

Real life company culture examples

I have a very good friend that was offered a professional job with a significant salary but the employee medical insurance wasn’t going to start for 4 months. This was a BIG RED FLAG for me. It told me that the company culture held a “prove yourself to me” attitude and was a possible indication of high turnover. I asked her to double check if the 4-month tenure requirement was for her or other departments? Yes, this rule applied to her and yes, it turns out this particular company had a lot of telesales employees and turnover was in line with the telesales industry. In doing my own research, I also found out that the CEO of this company often made the list of “top 10 worst CEOs in the state.”

Guess what? The recruiter and the CEO touted how important the employees are to the company.

When I worked in corporate America, the training program was 9 months long. As a trainee hitting the books with an additional 9 months of on the job training, the company would be losing money on me for the first 18 months. When the company explained that I needed to wait a year because I was a cost before I could participate in the company 401K program, I just nodded my head in naïve bobble head fashion and hit the books in an effort to work off my indentured slave debt to the man.   

Guess what? The recruiter and the CEO touted how employees made the company and how smart the workforce was. It was the perfect sell because you need a smart workforce to get through 9 month training plan, aka: you get what you reinforce.  

Times are changing. It wasn’t uncommon for prior generations to have a single employer for their entire career. If you’re going to work for a single company for 35 or 40 years, I can “almost” justify asking the employee to wait one year before some of the benefits kick in.

Today’s workforce is of a different mindset towards company loyalty. Ironically, this mindset has a lot to do with the results of 401Ks that disappeared overnight just a few administrations ago.  Average tenure of today’s workforce is significantly lower than a few years back and if we had to wait 1 year every time we moved to another company to get involved in a 401K, we would spend a good percentage of our careers waiting to participate, much less become vested.

It’s the classic chicken or the egg. Should a company treat employees with the attitude that they need to prove their worth before being given a treat, or do you “treat” the employees immediately and hope they will reciprocate? I believe you should treat the employee right and assume the best. Eligibility after 9 months assumes the worst. I am proud to say that the employees at ACME Publishing will be eligible to participate in the 401K ASAP.

OK, NOW go check out these other great HR blogs:  HRGalFriday & Bullseye Recruiting.

See you at the after party,

HRNasty

nasty:  an unreal maneuver of incredible technique, something that is ridiculously good, tricky and manipulative but with a result that can’t help but be admired, a phrase used to describe someone that is good at something. E.G.  “He has a nasty fork ball”.

If you felt this post was valuable, subscribe to weekly content here, “like” us on Facebook and leave your comments below.   Thank you! 

  • Whiskey Tango Foxtrot

    Nasty, you highlight a key point about wait periods when onboarding new employees: the policies are based on the organization hedging their bet on their new hire and wanting to avoid/minimize potential paperwork. For realz?! I agree with you; if you are going to extend an offer and hire someone as an FTE, have the balls and confidence to stick behind the decision and start the benefits ASAP. Most medical and 401k plans can technically start on the first day of the next full month from the employee’s start date. It really does make a difference in candidate decision making and can set the tone early on re: corporate culture. The rewards outweigh the risk of additional paperwork. In a competitive market where candidates are in demand, that can be the deal breaker and hamper an organization’s ability to hire great talent. Keep up the great work.

    • WTF!
      Always appreciate your articulate discussion. You are absolutely right and this is something I didn’t touch on in the post. If I am trying to recruit a great candidate that is ALREADY employed, and that employee has to wait 2 or 4 or 6 months before benefits kick in, why would they jump ship? Generally speaking the candidates that we are trying to recruit away from current employers are experienced and in many cases have families and need benefits. I wouldn’t stand much of a chance if I had to tell the candidate. . .”yes, we reached out to you, we really want you, but you need to wait 4 months for medical dental”.

      As always, thanks for the support!

  • @hrremix

    I really like this post because of the way you have clearly articulated exactly what is wrong with making people wait for their benefits. I’ve never understood the “wait 90 days for medical insurance” mentality. Not only does it send the wrong message but it complicates life for those who need health insurance or have dependents that need health insurance. Any job switch is a risk but then we add the additional risk of going 90 days without health insurance…crap!

    • HRRemix, thanks for the support, it means a lot because I am a fan!

      You so feel me on this! I can “almost” understand a 401K, but benefits? How can a company expect to recruit any top talent if that recruit needs to wait for their medical benefits. Tough! Love your site! http://www.hrremix.com/