A formal printout can go a long way toward educating employees about benefits.
Employee retention is a major concern for all businesses, including material handling distributorships. Most companies offer benefits packages—salary plus varying degrees of health insurance, retirement plans and stock options—as incentives for workers. But what is the best method to communicate to employees exactly what the company offers? “Most people don’t realize what their benefits are until they’re needed, whether that be insurance, retirement or whatever,” according to Tim Hilton, CEO of Carolina Handling (Charlotte, NC). “Frankly, typical employees don’t necessarily care unless the costs are coming out of their own pockets.” To avoid this confusion, Hilton recommends distributing a formal Statement of Benefits. Below, Hilton and Dave Griffith, president/CEO of Modern Group Ltd. (Bristol, PA), explain why preparing such a statement may be to your company’s advantage.
It’s a communication tool. By clearly illustrating the extra costs above and beyond salary, the Benefits Statement can help manage the disconnect between employees and management. Material handling companies typically bill out their time to customers through service technicians, and employees often do not understand where the extra money goes. “Say they get paid $20 per hour but we bill their time out at $80 an hour,” Hilton says. “Many employees see that and think that management is cleaning up by gouging the customer. They don’t think about the van, the fringe benefits or the infrastructure it takes to support their efforts. The Benefits Statement doesn’t solve that miscommunication, but it does address part of it.”
It’s a retention tool. Modern Group has over 100 people with at least 25 years of tenure at the company, which is attributable at least in part to keeping employees well informed. “The bottom line is,” says Griffith, “that for every dollar of salary, the company is spending x percent more on benefits. Employees need to put that in context when they’re evaluating their opportunities. The Benefits Statement is an easy way to explain what a three to four percent raise translates to in extra year-end cash, retirement, insurance and everything else.”
It may be a recruiting tool. Neither Carolina Handling nor Modern Group use their benefits statements as a way to attract talent, but Hilton says it would not be a bad idea for a small company with no prepared recruiting brochure. “It would make a good way to communicate all the different benefits you have, though you’d have to use a generic sample that didn’t have too many dollars in it.”
Regardless of how you choose to use it, keep in mind that presentation and delivery are critical. It has to look credible and must be easy to understand. Modern sends its statement out once a year, with a formal letter and computer printout. “It’s pretty simple,” Griffith says. “It says your base salary was this and here is what else you received as a total benefit. It helps them realize that this is a pretty good place to work.”
In the adjacent chart are some standard benefits offered by material handling dealers, according to MHEDA’s 2004 Employee Compensation Report. For the 2006 version of this report, contact MHEDA at 847-680-3500.