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Keeping Top Talent
Perks That Work
Some tech execs swear by game rooms, junkets and soft benefits, but are they here to stay?

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By Robert Burke

Julie Ferrier’s job is keeping people happy. As the corporate-culture manager at McLean-based OneSoft, Ferrier plans parties and company outings, arranges for dry-cleaning pickups and sells postage stamps. She has even addressed wedding invitations. Lose a button? Ferrier’s got a sewing kit in her office. An iron and ironing board, too, if you’re a bit wrinkled. "I’m here to make their lives easier," says Ferrier, 28. "Employees can go anywhere and get any amount of money, but I think it’s the perks that keep people."

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At Richmond-based Xperts Inc., employees receive up to $1,500 to decorate their office.
Photo Courtesy of Richmond Times-Dispatch

Keeping people happy is an increasingly tough trick. With unemployment at record lows, "companies are trying just about anything" to retain employees, says Jay Doherty of the New York-based human-resources consulting firm William M. Mercer Inc. Not only are employees being pampered, they’re getting more money, better benefits and help with personal problems such as child care and financial planning. Bosses once shunned such intervention. Retention "is no longer a human resource issue, it’s a business issue," Doherty says.

Because technology companies face the tightest labor markets, they have been the most aggressive in devising ways to keep workers. Herndon-based Net2000 Communications, for example, puts top performers behind the wheel of luxury cars like a BMW 323i or Z3. MicroStrategy, a Vienna-based data miner, goes a step further and has hosted all of its employees on Caribbean cruises.

Such perks are great for the employee, but do they make sense for the company? Maybe. Doherty says all companies — including technology firms — "have to be careful they don’t create a business model that’s not profitable." Don’t throw money at workers who want to leave because pay raises don’t always work. Perks and benefits can be effective, but they have to be custom-fit to the company and the business sector. Don’t add new perks just because they seem like hot trends, he says. "Too often there’s a desperation sometimes to just try anything, and it’s very expensive." MicroStrategy, which reported lower earnings earlier this year, has been rethinking its cruises, for example.

Yet companies still face labor crunches that can really hurt. How do you keep workers? Start by making them feel they’re part of a special place with a unique culture. "We want to hire people that are totally aligned with our values," says Tim Huval, general manager for South Dakota-based Gateway’s 2,200-employee call center and manufacturing facility in Hampton. "Honesty, efficiency, aggressiveness, respect, teamwork, caring, common sense and fun. Those are values that we live by." Richmond-based Xperts also lives by the value system. Founder and CEO William Tyler pushes pairing quality of life with a sense of social responsibility. Workers can designate which nonprofit groups Xperts contributes to, for example. A strong culture makes it hard for people to leave, Tyler says. "They don’t have an urge to leave because they’ve found a home. They’re happy."

Notice this corporate culture stuff doesn’t say much about shareholders or profit. It’s a decidedly employee-centric approach. "If you ask any of them, they’re all going to say, ‘Pay me more money.’ But that’s not the truth," Tyler says. "What people are looking for is, ‘A place that’s looking out for me.’"

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Wrinkled? Julie Ferrier, corporate-culture manager at OneSoft, can iron out your problems
Photo by Wayne Scarberry

What that means is helping employees cope with problems they face outside the office. That is where companies can build employee loyalty, says Barbara Bailey of William M. Mercer’s Richmond office. One popular tool is revamping leave policies to create "flexible leave banks" that put all employee leave into a single category. Employees take time off when they need it and don’t have to call it a sick day or vacation. "Work-life issues are huge," Bailey says. "You make them feel as though they’re not interested in looking elsewhere, because they’re very happy with their life."

Other benefits enticements include more generous 401(k)s and the creation of flexible-spending accounts that let employees save pretax income to cover the cost of things like dependent care and health care. Employers pay only administrative costs. Stock options still entice workers, though they’ve lost some luster. Some firms are helping employees find child care by screening providers, or are setting up day-care centers themselves. Such services cost money but are usually popular with workers, and that’s the whole idea. "If I feel good about what’s going on with my family while I’m at work, I don’t worry about them," Bailey says.

Employees are also getting help with the little inconveniences. Xperts has a Lincoln Navigator and a driver on hand to help workers who need a lift when their own car is in the shop. Employees can also reserve a company-owned pickup. It’s worth it, Tyler says. "So it’s $5,000 to buy a [used] truck, but 120 people get to use it for seven years. That is a great return."

Such investments might not be enough, though, for workers a few years into their careers who sense they’ve hit a ceiling. Unless they get a promotion, most midcareer workers have to settle for fairly modest pay raises. "Most of these people see the only way to make more money is to move," Bailey says. Companies can offer these employees training to help them develop new skills. Gateway has an on-site learning center where workers can use tutorial programs or just explore the Web. It also just began a two-year degree program on-site in cooperation with Thomas Nelson Community College. OneSoft offers training and tuition reimbursement as well. Tech workers in particular can get frustrated if they’re not schooled in the latest technology, says Randall Pevin, OneSoft’s vice president of operations. "They want to be given a career path that will take them to the next level," he says.

And if turnover seems inevitable, big companies can still make it work to their advantage. One banking company Doherty worked with found that its workers left at higher rates after 20 months in the same job. So it made a list of all well-rated workers near the 20-month mark and pegged them as candidates for transfers. "They [told] managers, ‘We’d rather lose them to another part of the bank than to someone else,’" he says.

Sometimes midcareer workers leave because they just don’t like their boss. Companies should be wary of promoting top performers into management jobs without judging their ability to manage workers. Mentoring skills are critical, Bailey says. "If you’re not good at that, you shouldn’t be doing it."

Most employees of any age enjoy being spoiled, and companies are increasingly going along. Technology firms lead the way because their employees expect it. "They think they should all be making a ton of money and all their conveniences should be taken care of," Bailey says. The deal they make with employers is this: Make life easy for me because I’m working my tail off for you. OneSoft goes all out to make life easy. It has movie nights in its 120-seat theater and holds company-wide events like barbecues about once a month. It celebrated a good second quarter with a trip to a popular sports bar in Washington. In September, OneSoft workers went to Kings Dominion.

Not everybody buys this theory. Stephen Alexander, founder of Herndon-based DigitalFocus, doesn’t buy into the high-tech lifestyle with cool cubicles that employees never want to leave. "We don’t want your dog and cat. You will not see pool tables. We want people to have a life [outside work] and work eight or 10 hours and go home," he says. By providing challenging jobs and creating opportunities for personal growth, his company has kept annual turnover at 3 percent, compared with 20 percent or higher in many other North-ern Virginia tech companies.

But OneSoft’s Pevin says the perks have a purpose. "It’s clearly in our self-interest to open a game room. Around the water cooler you hear, ‘Isn’t that neat that this company cares enough about us to let us play around?’ It sort of gets people to feel that the company supports them above and beyond the bottom line."

The bottom line could come back into vogue if the economy weakens. Companies forced to cut labor costs will start with the perks and work their way to reduced raises and fewer benefits. Atlanta-based e-business consulting firm iXL is finding that out the hard way. It just opened a new 60,000-square-foot building in suburban Richmond’s Innsbrook section, replete with perks such as an indoor climbing wall and barbecue deck. But in early September it announced plans to cut 350 jobs; the firm’s share prices have dropped more than 80 percent in the past year. The company says the job cuts will be spread evenly among its 23 sites worldwide, including the 180-employee Innsbrook office.

Pevin, though, can’t imagine temporary downturns in high tech having a serious long-term impact. One reason is that those laid off can find jobs very quickly. A OneSoft software developer who posted a resume on the Web could get 50 job offers a day, Pevin says. "The only reason I don’t worry about [a slowdown] is that it’s probably not going to happen any time soon. I really can’t see an end to this." And even if the economy does slow down, the boom years have produced a new generation of workers with career expectations that they won’t easily give up.

 

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