Surprising Compensation & Benefits Lessons from an Unlikely Source

If I were to send you to a company’s Careers page on their website and you saw the below, as Compensation and Benefits professionals, what would your reaction be?

• Health and Dental Benefits
  Dick's offers 100% employer-paid health insurance and employer-subsidized dental insurance to every employee who works at least 24 hours per week
• Educational Scholarships
  College, vocational/self-improvement scholarships up to $22,000 over 4 years to employees working 20 hours per week for at least six months and continuing to work at least 20 hours per week while attending school.
• Childcare Assistance
  As an extension of our Scholarship Program, childcare assistance of between $3,000-$8,000 per year is available to employees working 20 hours per week for at least six months -- and continuing to work at least 20 hours per week while receiving childcare assistance.
• Paid Community Service
  We feel it is important for our employees to get involved in our community. Our community service benefit encourages employees to help local charities. Dick's will pay volunteer-employee's their regular hourly wage for up to 4 hours per month of volunteer time.

As employee benefits go, I understand that’s a fairly generous package for U.S. employees. Full health and dental for part-time employees, tuition reimbursement – even paid community service. That’s far beyond what many companies are willing to offer in today’s continuing era of belt-tightening and cost cutting.

But if you continue to read on to the compensation structure on this company’s career page, you see:

• Higher Wages
  We pay employees at least $10.00 per hour to start (higher than the amount typically paid by Dick's competitors and well above the current minimum wage). Merit raises can increase your hourly wage to $10.50 per hour within three months. Shift Managers earn up to $4.00 per hour over-and-above their base wage. Store Managers earn considerably more.

That’s higher wages? Wait a minute? What kind of company is this?

Yes, this is an exceptional compensation package when you consider Dick’s is a fast-food chain in the Seattle, WA, area.

Why does a fast-food company with the standard thin margins of any in this industry offer such strong benefits? Indeed, why do they invest so much in training and education when they know the majority of employees will not necessarily stay and advance through the ranks of the company?

Company spokesman and son of founder Dick Spady commented:

“Among [Dick’s] special rules is you should make decisions for the long run so long as you can survive in the short run. The No. 1 job of a business is to make a profit. If you don’t, it’s not worth anything. No. 2 thing is to take care of your people. They’re the key to success. So once you’ve taken care of your people and you’re making a profit, you should make an investment in your community. And if you have a healthy community, you’ll have a good business in the long run.”

I would argue Dick’s extensive benefits package doesn’t just contribute to “taking care of your people,” but also is a strong contributor to investment in your community. Through their entry-level jobs that pay a living wage along with generous encouragement to pursue higher education, Dick’s is also investing directly in strengthening the community through better educated, more easily employable workers and citizens.

Take a look at your company’s benefits – especially how they are shared and communicated on your company’s website. Do they make a strong statement about your commitment to not just recruit and retain talent, but go a step farther in contributing to the greater community you are based in as well? How so?

As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. His articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.

Comments

[Jason Stewart]

Interesting article.

Out of curiosity, in what way is this comp & ben lesson "surprising"?

[E. James (Jim) Brennan]

Maybe because it comes from a relatively tiny low-profit low-wage local employer of minimally skilled entry-level workers who tend to have a high voluntary turnover rate. But I'm just guessing...

Note that the Washington State minimum wage is $9.19 an hour, currently the highest in the nation. So the $10 starting rate is not as dramatic here as it would be if compared to the US Federal $7.50 minimum wage.

[John Bushfield]

Clearly a thoughtful, strategically managed company with a compelling value system. It would be very interesting to know what kind of return they've been getting on those benefit investments; turnover rate, average tenure, margins, and so forth. Equally interesting would be to know the employee participation percentages in each of the benefit features.

This is much more than benevolence; it's smart business ahead of its time.

Insofar as the iPad comment from the Bulgarian girls, simply dropping it 40 feet to see if it would survive is a test everybody should pass; well, everybody but the cousin . . .