The Association of U S West Retirees



The Boss Taketh Away And the Boss Giveth
As Health Benefits Shrink, Companies Add Other Perks; Buying Extra Vacation Days
By M.P. McQueen
The Wall Street Journal
Tuesday, October 24, 2006

Employers might appear stingy as a result of cuts to pensions and health-care, but recently, companies have been trying to lessen the pain by introducing other kinds of workplace benefits.

Most of the added benefits are intended to help both employers and employees. For workers, new job benefits are increasingly important as the loss of others forces them to take on added responsibility for funding their own retirement savings and paying medical expenses. Companies needing to hire skilled workers are finding that more generous benefits can help lure applicants. And other companies are cutting worker turnover by making it easier for employees to juggle family and work life.

Faced with a shortage of engineers, defense contractor Raytheon Co. has begun extending benefits to partners and dependents of gay employees because "we don't want to be limited in our access to any of these talent pools," the company says. Indeed, one-third of companies in a recent survey by the Society for Human Resource Management, a professional organization, currently offer domestic-partner benefits for gay and other nontraditional families, up from 16% in 2001.

Tonie Moya, a test engineer in Raytheon's intelligence and information systems division, says the company's domestic-partner benefits lured her two years ago from her previous job with another defense contractor. Ms. Moya, whose three children already had health coverage, lives in Aurora, Colo., with her partner of 13 years. "The health benefits and being able to cover my domestic partner were most important," Ms. Moya says.

Service companies such as Hilton Hotels Corp. and Wachovia Corp. are battling absenteeism by allowing employees to lump vacation and sick days into a single bank of days off. Hewitt Associates, a human-resources consulting firm, found in a recent survey of workplace benefits that 18% of companies offered so-called paid-time-off banks last year, up from 10% five years earlier.

"It is one great benefit at the Hilton," says Margaret Carlos, an executive administrator for the hotel chain in North Glendale, Calif. "I grew up in the Philippines, and I can plan ahead and use the balance of banked time for when I go to my country," she says.

To appeal to younger workers, most companies have ditched casual Fridays in favor of casual full-time, a perk offered by nearly two-thirds of companies last year, compared with less than half in 2000, the Hewitt survey showed.

Other companies are offering more time off. Biotechnology firm Genentech Inc. starts out its workers with three weeks of paid vacation, instead of the traditional two weeks, and employees are eligible for a six-week sabbatical after six years on the job. Still, that isn't enough for some people, and 19% of companies surveyed by Hewitt allow their employees to buy additional vacation days, up from 14% five years earlier.

The new workplace perks come as employees are being squeezed in other areas. Many have been forced to pay a greater share of their medical expenses and to take responsibility for funding more of their retirement savings. Employers are eager to offload some of these expenses after facing years of soaring health-care costs and traditional pension plans that have become increasingly burdensome as the population ages.

Some companies have dropped health-care coverage altogether: The share of companies offering any type of medical plan has fallen to 61% from 69% since 2000, with most of the decline among smaller employers, according to the Hewitt study.

"Employers are focusing on what they can do to get the best people and keep them once they have found them. Where can they get a significant bang for their buck?" says Carol Sladek, work/life consultant for Hewitt.

Flexible work schedules, including variable hours and telecommuting, are another fast-expanding benefit, according to the Hewitt study. However, job sharing, which splits a position among multiple workers, peaked as a fad and is now offered by 18% of companies, down from 26% in 2001, according to the Society for Human Resource Management survey.

Polly Heinen, an assistant manager at Principal Financial Group Inc. in Des Moines, Iowa, reduced her workweek to just four days, while keeping her full-time hours, after the birth of her third child. "Friday is my pretend-that-I-am-a-stay-at-home-mom day. We go to Chuck E. Cheese sometimes, or go to the park. It has been a lifesaver. I absolutely love it."

Among other expanding benefits: Companies increasingly are partnering junior workers with more senior employees to help them plan their careers and navigate the corporate culture, human-resources experts say.

Ed Goings joined KPMG LLP in Chicago five years ago after a career in law enforcement, but he had difficulty adapting to the corporate world. The firm two years ago set him up with a mentor who he says taught him the ropes. Since then, Mr. Goings has been promoted twice and now is head of forensic technology in the Midwest for KPMG. "The field is very lucrative. I could leave this job at any time and possibly make more money," he says. The mentoring program is "one of the main reasons I am still at KPMG."

Discounted prices are another growing trend. By making available home and auto insurance in the workplace, companies are able to get group discounts for their employees. Entertainment discounts and ticket-purchasing services are now offered by 23% of companies surveyed by Hewitt, up from 14% in 2000. Still, some of these discounted services, like life insurance, replace ones that were formerly paid for by employers.

Even as many companies drop or scale back traditional pension plans, the number of employers offering some type of retirement program rose to 81% this spring from 73% in 2001, according to the Society for Human Resource Management survey. Bill Bland, owner of Nu-Lane Cargo Services of Visalia, Calif., a three-year-old transportation brokerage firm, started a 401(k) plan recently to discourage turnover among his 25 employees. "It reduces their wanting to go out and explore other opportunities," he says.

Write to M.P. McQueen at