Benefit Bonanzas, and then some

When it comes to basic job perks, IT pros want them all - plus a fat paycheck. The Best Places to Work use that as a starting point and throw in some unusual offerings to really sweeten the pot.

CIOs everywhere are racking their brains to find the right mix of bonuses, compensation and modern benefits to lure and retain scarce information technology workers. Meanwhile, Harleysville Group Inc. still sees value in a tried-and-true 1950s-era perk with charm.

Every workday at 9:30 a.m. and at 2:30 p.m., someone wheels a snack cart through Harleysville's office areas, stopping for 10 minutes at a time to dispense coffee, doughnuts and mental health.

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Stocking Up Against Dot-coms

RadioShack offers stock options, partly as a hedge against the lure of dot-com companies, but the company views the options as part of a full buffet of benefits, bonuses and compensation based on its goal to be the best company to work at in the U.S.

"There is a love affair of all Americans with stock options," says Evelyn Follit, senior vice president and CIO at RadioShack, which was known as Tandy Corp. until undergoing a name change in May.

"Some of the dot-coms are so rich that we'd be insulting people with counteroffers, but we are able to intercede and help in some cases," she says.

While turnover is low at RadioShack, when people do leave, "money is the not the driving force" in all cases, says Bob Gellman, vice president of online strategies. "We've found out that, in a few cases, it was something they were unhappy with, and we put together an action plan that addressed their needs and it worked."

Last year, the company launched a companywide benefits review involving hundreds of workers and their spouses that has resulted in many new quality-of-life benefits, including a Lifeline crisis service staffed by licensed counselors and "guilt-free vacations," where workers are told not to read e-mail or call the office.

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"People are able to get up from their desks, and the carts have a water-cooler effect that breaks up the day," says James Breidenbach, assistant secretary for IT at the Harleysville, Pa.-based company. "Whenever people leave the company, the thing they say they miss years later is the break cart."

An Array of Benefits

Aside from that novelty, Harleysville offers an array of benefits to lure and retain IT workers. This includes an attractive 401(k) plan that features up to a 100% match when an employee contributes up to 6% of his salary to the plan. The company has made 100% matches for the past three years, based on company financial performance.

Such 401(k) matches are common benefits at many IT shops, but companies seldom match at 100% and usually at only 50%, according to reviews of companies in Computerworld's Best Places to Work survey.

Other common benefits are telecommuting options, flexible hours and overtime pay or comp time, companies in the Best Places to Work in IT survey reveal. Employee stock-ownership plans are also common, and sometimes companies vest workers fully from the start, with the employer paying from a small percentage up to full cost.

RadioShack Corp. in Fort Worth, Texas, set a company record for matching 401(k) contributions at 159% - on top of matching up to 80% of the cost of RadioShack stock purchased by employees and offering salaried employees stock options.

"Today's IT employees want it all in terms of benefits, along with fair compensation," says Pamela Hansen-Hargan, vice president of human resources and security at Lockheed Martin Management & Data Systems in Philadelphia. "But more critical to employees is to feel they have good leadership with interesting and challenging work."

Hot Incentives Include Concierge

One of the hottest new benefits at Lockheed Martin is a concierge service that works just like those at hotels. You want car service? You can call the concierge, who arranges for a company to change your car's oil in the company parking lot. You want to go on vacation? Name your budget and the concierge service finds the best deal. All services are free to the worker.

Hansen-Hargan says child-care and elder-care emergencies are also handled by the company so that a valuable worker can make it to a critical meeting the next day.

Flexible work hours have proved very popular, but the program was set up with the warning that abuses wouldn't be tolerated, especially because Lockheed Martin is a government contractor.

Benefits at Lockheed Martin are judged not only against what other companies offer IT workers, but also on whether they help lower attrition, create better leaders or improve productivity. Signs of improved productivity might be an increase in the number of lines of code written or a decrease in the number of bugs in code.

Lockheed Martin has a semiannual bonus program that is tied to employee performance. But the company has found that bonuses don't produce the highest return on investment: They work best at improving performance on a project but don't change the overall job experience.

"We are a people-driven business, and we've found a bonus provides a short-term return. But for the long term, creating a good work environment helps retain talented people," Hansen-Hargan says. Benefits such as the concierge service create a better work environment that deals with the whole worker and lowers stress to improve performance, she says.

Bonuses Tied to Objectives

Lockheed Martin's approach contrasts with that of DPR Construction Inc., where bonuses are central motivators. Budgeted at 12% of base salaries annually, bonuses are awarded when workers achieve preset objectives.

The Redwood City, Calif.-based company has only 28 IT workers for 2,200 end users nationwide in a business with annual revenue exceeding $1.2 billion. "Bonuses are the most meaningful to our workers because they are real cash to workers," says Les Fondy, who describes himself as the "head nerd," equivalent to CIO, at DPR.

The value of bonuses is high in terms of return on investment for the company because they're tied to performance objectives and to the level of communication between worker and manager. "The workers know what it takes to get something better with bonuses," Fondy says.

DPR measures the success of bonuses partly by the amount of value the IT workers create for end users in the construction of new buildings. There is a feedback loop that gives Fondy and others a pretty good sense that the bonuses are motivating IT workers and therefore satisfying the end users of the technology. "Happy employees generate raving (end-user) fans," Fondy says.

"People do look at these bonuses as important, and I personally find them very appealing," says Lee Rockledge, a network manager at DPR who also manages five workers.

But Rockledge says he and other workers also give high ratings to flexible work hours and an in-house fitness center. And Rockledge says another big plus is DPR's willingness to add features to its medical and dental plans, including $1,000 worth of orthodonture coverage, which is important to Rockledge because he has children.

Still, traditional IT shops are hard-pressed to hold on to top-level workers who are lured by dot-coms and their stock-option plans. "At a brick-and-mortar shop, you have to provide the workers real money because they won't get the multiples (on stock values) they would at the Internet companies," says Craig Bickel, vice president and CIO at Cabot Corp., a chemical company in Boston.

But Bickel defines real money as much more than lucrative bonuses or rich benefits. "I haven't lost a lot of people, but I've lost some leaders who have gone to Internet companies for a flat salary increase and a gamble on equity in the new company," he says. "They tell me, 'I just have to grab the brass ring.' "

Copyright © 2000 IDG Communications, Inc.

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