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Company culture, what message are your benefits reinforcing?

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. 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 its 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. A lot was learned in both environments. 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 for 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. 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 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.

Relationships matter

Because of prior relationships, we were lucky enough to find a broker that would work for 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 were 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 for 90 days. In the back of my mind, my HR Spidey senses 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 rollout and I just couldn’t put my finger on what was bothering the Peter Parker in me.

Eligible day 1

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.

Enter relationships with trust not doubt

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. Unfortunately, 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. It is also an 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. Turnover was high and 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.

Nine months of training

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 bobblehead 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 a 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 a different mindset toward company loyalty. This mindset is the result of 401Ks that disappeared overnight just a few administrations ago.  The average tenure of today’s workforce is significantly lower than a few years back. Waiting a year every time we moved to another company to get involved in a 401K, 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 401K ASAP.

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

See you at the after-party,


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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