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
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