EMPLOYEE
         BENEFITS

This might sound like recess, but it's actually part of a serious effort to attract and retain technically skilled workers. Gyrus, a 15-year-old Richmond firm that designs training software, employs 30 people -- many of them young, single and a little bit wet behind the ears. Gyrus co- founder and president, Bob Dust, says the lifestyle components of the firm's benefits plan are as important in attracting and keeping today's high-tech employees as health insurance, life insurance and retirement.

artwork by Andre Lucero

Pension plans are not foremost in the minds of these twentysomethings entering the job market. "My employees typically don't ask about their benefits until after they're hired," Dust says. But once they embark on careers, these Generation Xers are forced to make some important decisions.

Employers used to provide one-size-fits-all benefits packages. A young hire joined a company for a lifetime run. He simply assumed that retirement would bring a gold watch and a pension. Some outfits still operate this way, with management making all the decisions. But the needs of today's labor market have ushered in such benefits as the 401(k), the most nearly ubiquitous discretionary benefit offered. Experts agree that its advent has probably done more than anything to increase employee awareness of benefits -- principally because the plans force workers to make investment decisions. Now many employees go cafeteria-style, choosing different 401(k) investment options, health plans or paying a little extra to increase life insurance coverage.

Dust says his firm has 100 percent participation in its 401(k) plan. He believes even younger workers have heeded warnings about the future of Social Security. The Gyrus 401(k) offers 15 investment options from the Colorado-based fund management company Great West.

In Northern Virginia, with its chronically low unemployment rate, competition for workers often reaches a fever pitch. Benefits experts say many companies in the region are providing at least some variation of the cafeteria approach.

BTG Inc., a Fairfax systems integrator with 1,600 employees, decided on a cafeteria-style package last year when it redesigned its benefits program. Today, employees can pick from among four health care options. Or if someone waives coverage -- because he's part of a spouse's plan, for instance -- his pay stub will show a $23-per-month refund. Each employee also gets 10 "benefit dollars" a month that may be used to buy life, disability and accidental death insurance above what the company provides. Each pay period, BTG employees also accrue paid leave they may use however they wish. There are no distinctions made in leave used for illness, vacation or to care for a sick relative. They can carry over some unused leave to the following year, or use the cash value of accumulated leave to purchase company stock. "We don't want someone to have to call in sick when he or she really needs time off to take care of a child or handle some personal business," says Mark Kurz, the firm's employee benefits manager.

BTG even spices up its benefits offerings by allowing selected and scrutinized vendors to offer discounted products and services to employees. The firm has let cellular phone companies and movie ticket discounters come in and offer deals to workers. The company even negotiated a deal with NationsBank, which set up an ATM at the BTG headquarters and offers workers free checking and discounts on CDs and mortgages.

Outside sales pitches are making their way into the workplace, but companies say they're careful to allow only what employees want. Kurz says BTG uses employee surveys, focus groups and market surveys to make sure its benefits package is competitive. And once it wins over recruits, it relies on extensive in-house communications to keep them happy.

Perhaps the only thing missing from BTG's cafeteria-style benefits is, well, a cafeteria. The firm couldn't work a kitchen and lunch room into its new headquarters, but it does have a local caterer bring in buffet-style offerings for the midday meal.

It's hard enough for a human resources expert to understand the ins and outs of so many different benefit options. As businesses delegate decision-making to their employees, they also are bringing in outside experts to educate their work force on what's available and what's advisable.

Suzanne Samuelson -- a consultant in William M. Mercer Inc.'s Washington, D.C., office -- has helped BTG and other Virginia businesses design the educational components of their programs.

"One theme that I am finding everywhere I go, regardless of the size of the company or the sophistication of its employees, is that employees are saying, 'I don't understand all of the options that I'm being offered,'" she says. "Our clients may have attempted to address that by giving employees more information, but we've found that if they just give them lots of paper, it doesn't really help."

A Virginia manufacturer encouraged participation in its retirement plan by sending each employee a photograph of two $1 bills with a real silver dollar attached. Samuelson says the message was clear: If you contribute $2, this is what you get in matching funds from your employer.

Information about 401(k)s is getting pretty sophisticated, says G. Alan Lackey, vice president of Martinsville's BMS Consulting Inc. His company used to distribute hypothetical investment scenarios that didn't always match up with the financial situations of individual workers. "Today an employer can give a diskette to an employee and allow him to explore all the scenarios on his own," Lackey explains. The employee can plug in his own salary and expected retirement age, and can better project the growth of his nest egg based on different contribution levels and investment options.

With cafeteria-style plans, educating workers about the options is important, not only because it helps employees, but because it could limit an employer's liability if a worker makes bad choices. With regard to 401(k)s, for instance, the U.S. Labor Department in 1992 issued guidelines saying a plan must offer at least three investment options with a wide range of risks; that it must allow workers to reallocate contributions at least once every three months; and that it must provide enough information for employees to make informed decisions. Although voluntary, the guidelines should help protect employers if employees' investments fall short of their goals.

Choice in benefits isn't limited to major metropolitan areas. Even in small communities, workers can find generous packages with a range of options.

The Virginia Fibre mill in Amherst County, a manufacturer of container board used to make corrugated boxes, is a 28-year-old operation with about 300 employees and a turnover rate of less than 1 percent. Owned by Ohio-based Greif Bros. Corp., the plant draws employees almost exclusively from nearby communities, people who typically get married, have children and plan to retire from the company. "We like to attract people from this region. If they have roots here, then they are more likely to stay," says Michael A. Giles, executive vice president. He contends that the company's comprehensive benefits have been extremely important, not only for the low turnover rate, but also for the plant's overall performance.

By far the most modern component of the package is the HMO, which replaced a conventional health plan a little over a year ago. Company officials warned their aging work force that rising health costs might lead to such a change, and they set a health coverage spending limit of 7 percent of payroll. Virginia Fibre crossed that cost threshold last year.

Now the traditional indemnity health plan is an optional benefit that is partially funded by the company.

All of these benefits are nice, but Giles gets excited when he talks about Virginia Fibre's incentive plan, which offers extra compensation to all employees based on the plant's productivity. Employees earn monthly sums and receive quarterly checks, which they often choose to put into their 401(k)s. He says the incentive plan is a great motivator, and it fits the philosophy of Virginia Fibre's founder and chairman, Robert C. Macauley, who believes in hiring "a lean staff of highly motivated people, treating them fairly and compensating them well."