Employee Retention Starts with Benefits
By Hughie Hunt
Hughie Hunt is a partner at Kemet & Hunt, PLLC in Baltimore and College Park, Maryland. He can be contacted at hhunt@kemethuntlaw.com.
A small firm’s retention of well-trained staff is essential to its success. But how can small firms compete with big firm salaries?
A friendly work environment coupled with a solid benefits package can help.
At our small firm, we offer our two employees health insurance through a PPO, which allows participants to choose a doctor either within or outside of a network and covers 80 percent of the cost of medical and dental care.
Think employee health insurance is too expensive for your small firm? Providing such insurance is actually more cost- effective than increasing employee salaries because it is a deductible expense for the employer. And the goodwill inspired by providing that security to your employees goes beyond dollars and cents. It costs roughly $7,000 per year to cover our employees, which is a small price to pay to keep them.
Another benefit option is to provide an employee pension plan. You can start a plan with as little as $10 and a $10 annual fee, and your employer contribution can be as little as 2 percent. If your employee’s salary is $30,000 per year, your employer match will be $600 for the year. Paying an employee an extra $600 doesn’t compare to adding an additional $600 to the employee’s pension plan, again building good will with the employee.
Vacation and sick leave also are important to gain a competitive advantage. In addition to the major holidays, we offer two weeks of vacation and five sick days during the year. During Thanksgiving week, we close our offices at the end of business on Tuesday so our employees have the remainder of the week off without using their vacation leave. They appreciate that more than you know. (And really, how much work do you do on the Wednesday before Thanksgiving and the Friday after?)
We don’t use time clocks, but we do ask employees to sign in and we monitor tardiness daily. It’s important for employees to know that time is valuable, but it’s also important for them to know that they are not bound by the clock. Though we monitor the times they check in, we don’t penalize for each minute missed. We look at the entire week to see if there is a problem. If tardiness becomes a pattern, we first offer a change in schedule and try to work with our employees to find the best solution. Through open communication, we create a friendly atmosphere for our employees. They work harder and more efficiently because of it, and they feel more connected to their work.
These ideas are just some ways we improved our work environment and increased our employees’ productivity. It is important to consult your tax professional before you offer any employee benefit to understand exactly how it will affect your company. Employee benefits are not without costs, but you will gain much more in loyalty, morale, and productivity than you spend in actual dollars.
Creativity is the key to retaining employees in a small firm environment. You may not be able to match the salaries of your larger competitors, but you can offer a great benefits package and an incredible work atmosphere. Your employees will likely respond by staying with you, which definitely improves your bottom line.
READY RESOURCES
• Flying Solo: A Survival Guide for the Solo and Small Firm Lawyer, Fourth Edition. 2005. PC #5110527. Law Practice Management Section members receive a discounted price. To order online, visit www.ababooks.org.
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