Employee benefit programs that work

Providing good benefits is an important way to keep the best employees, but at the same time it can be an expensive thing to do, especially for small companies. Professional Remodeler’s Tom Swartz talked to remodelers Greg Antonioli and Amie Riggs about crafting benefits programs. Both companies offer health insurance, dental insurance, paid vacation and 401k plans, amongst other benefits. Highlights of that conversation appear here. Click here to listen to the full conversation.

Tom Swartz: Why do you offer benefits?

Greg Antonioli: Because I want to attract and keep the best people. Fortunately, our industry is becoming somewhat more professional, drip by drip, little by little, and that’s just a part of it. The top people in our industry have come to expect some of the security and whatnot that other industries have worked into their pricing structures a long time ago.

Amie Riggs Swarts: My new office manager has just been hired in the last 45 days. It was the No. 1 question asked by all the candidates we had: Do you offer or provide health insurance? No. 1 question. She wanted health insurance, she wanted to be covered, she wanted to make sure her family and her children were covered if need be. I now appreciate what I have had for the last 15 years and what my grandfather and father have set this company up to be. I can’t say why we do it, because it’s just been something we’ve always done. But why I will continue to do it, is what Greg said: It’s about attracting and maintaining the right people for our team.

Swartz: Have you had any benefit that you have provided that simply didn’t work?

Antonioli: Only in the sense that every benefit … if you don’t update or change them, they become par for the course and just become expected. Every time you roll out a new benefit, everyone’s excited. One year later, it’s just expected.

Riggs Swarts: I don’t think it was so much about it didn’t work, but what we have found most recently is it’s the benefits that we have had to cut or put on the back burner for the time being. For example, we all had gas cards. About five years ago, when I had 20 people in the field, and gas skyrocketed, it was crazy and it cost us too much money and we wound up pulling them. When you have to rein that in, it really does put that emotion into it for people and they feel that something has been taken away from them. That’s hard to repair and get back in the grand scheme of things, especially when we’re tightening our belts.  

Swartz: It could be a demotivator, which is what you’re alluding to. You have to be very careful what you put in place, because if you take it away it could have some negative aspects.

Riggs Swarts: You got it.

Swartz: Some folks say money is the best motivating benefit. Do you agree with that?

Antonioli: Studies show no. I have had employees turn down bigger money offers to stay here, so I guess we have the empirical evidence that money is not No. 1.

Riggs Swarts: There’s been years of some very big bonuses at Riggs Construction. The past four years there hasn’t been. I don’t see any difference in performance or attitude in my staff or my crew, so I know that it’s not money. I think that it’s being recognized, it’s being listened to. They love to see their ideas implemented.

Swartz: Do you charge more money for your work because you have higher overhead because of these benefits?

Riggs Swarts: Sure, of course.

Swartz: How can you justify that for a remodeler that only pays wages and doesn’t offer these benefits. Another company that doesn’t offer these benefits should be less money. How do you combat that from a sales standpoint?

Riggs Swarts: My job in educating my potential client is that you’re going to pay more for better quality, skilled labor.

Antonioli: I hesitate to say that we charge more, because I believe that we provide value. There is a return on that, the investment in those benefits. For the person who’s considering other companies that have positioned themselves the way we can, we are no more expensive. We may sound more expensive in the beginning, but, not to sound trite, you get what you pay for.

Swartz: That’s a great way of putting it. Just because you offer these benefits doesn’t mean you are charging a higher price.

Antonioli: It lends itself to efficiency.

Swartz: You’ve got the best people there are, it’s going to take a shorter amount of time and you’re going to be more complete in the beginning of the project and at the proposal stages because of the experience and because of the knowledge of the company.

Antonioli: Exactly.

Swartz: People need to know that benefits are important, but they don’t need to price you completely out of the market and that’s what you just said. So, what has changed in the last three years on benefits and what changes in benefits do you see coming in the next three years?

Riggs Swarts: What’s changed is for the first time in our history we’ve had to, throughout this and last year, we’ve had to pull back on benefits as we continue to review the budget. For example, at the end of last year we said, as far as the rest of the year is concerned, we can’t do anymore paid vacation. Thankfully, nobody had an entire week of vacation planned or anything like that. That’s just one example. What’s going to change in the future is the way that we look at, possibly, how many weeks of vacation are we giving or just benefits in general. I think it is about tightening our belt. We’ve been fat for so long, and that’s been great, very beneficial to not only to us as owners, but to our staff because they get to partake in that profit as well. I think things are just going to be different from here on out.

Antonioli: We’ve only added benefits. We have yet to be in a position to pull any benefits that we’ve started providing. The most recent one … is disability insurance, beyond their workers’ comp, which would cover someone even outside of a work-related accident. What do I see changing? Again, we’re in a very good market compared to the rest of the country, so I might be maintaining a certain level of benefits, more than someone else. The thing that I think is going to be shifting, I hope, is that job security is going to be a big benefit in and of itself. It’s something that employees are going to be looking for. They’re going to remember the sting of being laid off. This isn’t a game. These are people’s livelihoods that we’re talking about. Sometimes as business owners we get on our high horse and say we take all the risk. Well, you can ask any guy who’s been laid off in the past 18 months whether he took any risk by signing up with that company that laid him off.

Riggs Swarts: Exactly. That was a great answer.

Swartz: What advice are you going to give to the remodeling contractor out there, the person who is moving toward professionalism in this industry and wants to do the right thing?

Riggs Swarts: My advice would be to keep himself or herself educated at all times. What I mean by that is maybe you can’t offer some health benefits right now, but always keep on the lookout. Get a good broker who is looking all the time for things that you can possibly afford in the future. You have to constantly be asking and involving your employees. Ask them what they want. You might not be able to give it to them right now, or you might be surprised at what it is that they want. They might want the littlest things that you might think are minute; that aren’t important to you, but are so important to them.

Swartz: Greg, what advice are you going to give the remodeling contractor?

Antonioli: Everything Amie said. And I would recommend [joining] a trade organization, whether it be NARI or NAHB Remodelers. A lot of us, in the day-to-day of putting out fires, we don’t even know where to begin with talking about healthcare or some of these other things. In my NARI chapter, there are healthcare people and insurance agents and people who understand the industry well and who can present it to you in very understanding terms. The other thing – everything starts with an annual budget. Budgeting is like you’re just playing out a lot of “if-then” scenarios and seeing what it would cost to do this. If you have a dream of providing health care, then build a budget accordingly and see what kind of sales it would take to support that budget and if you think you can do it. Otherwise, you’re just wandering aimlessly. That’s at the core of wanting to do anything on a professional level.

Providing good benefits is an important way to keep the best employees, but at the same time it can be an expensive thing to do, especially for small companies.