Company culture, what message are your benefits reinforcing?

Company Culture

This week’s blog post explores company culture and the nuances of reinforcing it through benefits. As many readers are aware, I work at a tech startup. I worked in corporate America for over 10 years and feel I have a fairly good understanding of the range of different company cultures. Thankfully, I can say I haven’t worked in any real shitholes.

Dohhhh! Did I just say that?

Every company brags about its culture

Every HR professional and CEO says, “We have a great culture.” They all say, “We invest in our employees”, or the famous “Our employees are this company’s most valuable asset.” Whether it’s an old-school bank, a used car lot, or a fast-growing, profitable tech startup, every company shares similar sentiments. In most cases, they 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. A lot was learned in both environments. I wouldn’t be where I am today, and I wouldn’t appreciate my tech experience as much without my corporate experience.

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

This past month, I have been rolling out a  plan, and I hope that the way we are introducing this benefit will reinforce our company culture—a culture that values its team members. The company didn’t have a 401 (k) in place for the first few years, for sound business reasons. We couldn’t afford the cost involved, preferring to allocate our resources to developing our company product. In 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 one attraction as an employer wouldn’t be a 401 (k), 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 returning for a second. The need for a 401 (k) is becoming a higher priority.

Relationships matter

Due to our prior relationships, we were fortunate enough to find a broker that would work with a small startup. This broker typically dealt with larger, more traditional companies, and we soon discovered that we would be the 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. I pushed for day one eligibility. We eventually settled for 90 days. In the back of my mind, my HR Spidey senses were going off. I couldn’t figure out what was wrong with the situation.  There were a lot of factors going on with this rollout, and I just couldn’t put my finger on what was bothering the Peter Parker in me.

Eligible on Day 1

The next day, it dawned on me. I really didn’t like the 90-day tenure requirement before an employee became eligible for the plan. I wanted them to be eligible on day one. Granted, we won’t match on day one, but I wanted 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.

Enter relationships with trust, not doubt

I appreciate the broker looking out for the company and my time. 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. The United States legal system was built upon the foundation that everyone is “innocent until proven guilty.” This 6-month to 1st anniversary date would be a probation period disguised as a celebratory anniversary.

If I believe in a candidate enough to extend an offer, then I believe in them enough to initiate their medical, dental, vision, and 401 (k) benefits as soon as the paperwork allows.

Real-life company culture examples

I have a very good friend who was offered a professional job with a significant salary. Unfortunately, the employee’s medical insurance wasn’t set to start for four months. This was a BIG RED FLAG for me. It told me that the company culture held a “prove yourself to me” attitude. It is also an indication of high turnover. I asked her to double-check whether the 4-month tenure requirement applied to her or other departments. Yes, this rule applied to her, and yes. It turns out that this particular company had a large number of telesales employees. Turnover was high and in line with the telesales industry. During my research, I also discovered that the CEO of this company frequently appeared on the list of “top 10 worst CEOs in the state.”

Guess what? The recruiter and the CEO emphasized the importance of employees to the company.

Nine months of training

When I worked in corporate America, the training program lasted nine months. As a trainee, with an additional 9 months of on-the-job training, the company would incur a loss of money for the first 18 months. When the company explained that I needed to wait a year because I was a new hire before I could participate in the company’s 401K program, I just nodded my head in a naïve bobblehead fashion. I hit the books to work off my indentured slave debt to The Man.   

Guess what? The recruiter and the CEO emphasized that employees were the backbone of the company and that the workforce was exceptionally skilled. It was the perfect sell because you need a smart workforce to complete a 9-month training plan; in other words, you get what you reinforce.  

Times are changing

It was not uncommon for prior generations to have a single employer for their entire careers. 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 has a different mindset toward company loyalty. This mindset is the result of 401(k)s that disappeared overnight just a few administrations ago.  The average tenure of today’s workforce is significantly lower than it was a few years ago. Waiting a year every time we move to a new company to get involved in a 401(k) plan has us spending too much time waiting to vest.

Chicken or the egg

Should a company treat employees with the attitude that they need to prove their worth before being given a carrot? Should we “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 401 (k) plan as soon as possible.

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 who is good at something. “He has a nasty forkball”.

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