Return on Investment in Employee Benefits—a Case Study

Source: Journal of Accountancy

The Boston firm Vitale Caturano & Co. has grown from 55 to 280 people since 1996. That is when it launched its extraordinary benefits program designed to attract and keep the right people. By listening to employees, management learned what employees truly want—growth, exciting work, and appreciation.  Management formed VCC University, which operates throughout the year. They refer to young people as the “teach me generation.” A learning and development director, reporting to a partner, creates the curriculum and courses, and hires the instructors. The firm also offers tuition reimbursement for approved courses and degree programs. About half the training is conducted during regular business hours.

VCC also has an art collection displayed in halls, conference rooms, some offices, and an art gallery with quarterly exhibits. The investment in the collection is $124,000, and the appraised value $900,000. It has sold several pieces at appreciated prices.

A kitchen with a full-time chef and occasional guest chefs serves lunch every day, between-meal refreshments, and dinners during tax season and on special occasions. Saturday lunches and dinners are free. It costs $100,000 a year, but payback might be as much as $500,000 a year (one-third of the staff may save an hour a week at $100 an hour).

A day care center is provided free every Saturday during busy season, caring for 20 to 30 children in a 1200 square-foot space. It costs $30,000 a year, but gets 500 extra hours a year from the staff who use it.

Concierge and office services run errands, transport staff to appointments, take professional staff cars in for service, retrieve files, route mail, prepare conference rooms, etc.

VCC has an average annual unforced turnover of approximately 8.percent.

Small firms obviously can’t do all these things. But there are many things they can do:

v     Instead of concierge services, give employees more time to run errands.

v     Host social events frequently—picnics, wine and cheese parties, after tax season parties, etc.

v     Collaborate with other firms to obtain discounts at health clubs.

v     Help staff by providing challenging work, learning opportunities, responsibility, good salaries and benefits, community involvement, etc.

v     Develop a mentoring program for key employees.

v     Keep track of turnover trends—determine the point on the career path that people tend to leave. Get feedback from staff to try to learn the causes.

v     Conduct post-departure interviews with employees about 60 days after they leave, when they are more likely to give candid feedback.

From Journal of Accountancy, May 2005. Click here for the complete article: http://www.aicpa.org/pubs/jofa/may2005/hayes.htm.