The Effect Of Innovative Benefits And Services

On Employee Retention Essay, Research Paper

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WEBSTER UNIVERSITY

Alumnus SCHOOL

THE EFFECT OF INNOVATIVE BENEFITS AND SERVICES ON

EMPLOYEE RETENTION AT SAS INSTITUTE, INC.

A paper presented to the

Graduate School of Webster University

in partial fulfilment of the demands

for the grade of Maestro of Humanistic disciplines

July 26, 2000

Pope Airforce Base, NC

Abstraction

Employee benefits plans are important to the enlisting and keeping of employees in any industry. Effective plans enable employees to better header with the demands of place and the workplace. These same policies can besides lend to lower employee turnover rates, keeping of qualified employees, and motive of workers. The computing machine industry has become the leader non merely in engineering and concern, but besides in the demand for technically qualified employees. This personnel demand and the strength of the economic system have created a occupation market in which skilled persons are hard to retain. SAS Institute Inc. , based in Cary, NC has successfully created a corporate work environment that has significantly benefited the company, and placed SAS as one of the most desirable companies to work for in the US.

Table of Contentss

1. Overview? ? ? ? ? ? . ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? . ? Page 4, Paragraph 1

2. Demand for competent employees in today? s economic system? ? ? ? ? ? ? ? ? ? ..Page 4, Paragraph 2

3. How benefits and services falls tantrums in HR theoretical account? ? ? ? ? ? ? ? ? ? ? ? ? Page 5, Paragraph 1-2

4. Human Resource section duties

a. Recruitment? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? . ? . ? ? ? ? .Page 5, Paragraph 2

B. Retention? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? .. ? ? Page 5, Paragraph 3-Page 6, Paragraph 3

degree Celsius. Compensation? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? .. ? .Page 6, Paragraph 4

d. Corporate Culture? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ..Page 6, Paragraph 5

5. The SAS Institute:

a. Background? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? . ? ? ? ? ..Page 7, Paragraph 1

B. Comparison of benefits study by Albertson? ? ? ? ? ? ? ? ? ? ? ? ? .Page 7, Paragraph 2

6. SAS Benefits:

a. Child attention installation? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & # 8230 ; .Page 8, Paragraph 2

B. Medical Clinic? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? .Page 8, Paragraph 3

c. 35-hour work hebdomad? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? .Page 9, Paragraph 1

d. Fitness installation? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? Page 9, Paragraph 2

vitamin E. Cafeteria? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ..Page 9, Paragraph 3

degree Fahrenheit. Biotechnologies? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? .Page 10, Paragraph 1

g. Vacation/sick yearss? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ..Page 10, Paragraph 2

7. Comparison to similar companies? ? ? ? ? ? ? ? ? ? ? .. ? ? ? ? ? ? & # 8230 ; Page 11, Paragraph 4

8. SAS Awards and other acknowledgment? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & # 8230 ; Page 12, Paragraph 2

List of Tables/Appendices

1. Table of company comparing? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? ? & # 8230 ; Page 12

2. Data infusion: Survey of benefits and working conditions among makers? APPENDIX Angstrom

In the computing machine industry, as in any industry, companies are ever endeavoring to

attract and retain skilled, loyal employees. In today? s booming economic system, this undertaking has become a challenge for some companies. Skilled workers have become free agents who can put their human capital in the companies of their pick. The Human Resources section is at the head of this challenge, undertaking enlisting, keeping, compensation, and lending to corporate civilization. SAS Institute Inc. is a package fabricating company that has late risen to the top in both concern and fiscal success, and besides in employee keeping rates. SAS? s advanced attack to intervention of its employees has made the company an illustration of how an effectual employee benefits plan can harvest wagess in many facets of the concern. The list of employee benefits and new-age fringe benefits is striking. A recent study was conducted ( see Appendix A ) , in which the benefits and working conditions among makers were compared. SAS Institute provides better benefits at a significantly higher per centum than most companies, ( Albertson, 2000 ) . Although competitory companies offer similar benefits and services, SAS remains a leader, evidenced by the company? s low turnover rate. When comparing SAS Institute with Nortel Networks, IBM, Cisco, and Intel the SAS benefits are superior. The SAS Institute has received many awards in several countries, and has been named as one of the top companies to work for in the US ( Branch, 1999 ) .

The unemployment rate in the United States has reached the lowest degree in about 11 old ages, approximately 5 per centum since 1997 ( Solomon, 1997 ) . The proportion of people with occupations is at an all-time high, and the economic system continues to turn. Economic growing continues to lift as rising prices is staying steady, and consumer assurance is high ( Solomon, 1997 ) . The? Employment Outlook Survey? of 16,000 companies conducted by Manpower Inc. predicts that 30 per centum will seek extra employees in the close hereafter ( Solomon, 1997 ) . Because of this upward tendency in the economic system, for many concerns the biggest obstruction is in labour deficits. Now faced with continual alterations in engineering and development of new merchandises, the demand for skilled employees in the computing machine industry is even more burdensome. Workers possessing these deficit accomplishments are so critically needed that they are able to? compose their ain ticket. ? A coder may be hired by company A, merely to be seduced over to company B by a list of fringe benefits and benefits. The labour market has metamorphosed into a practical competition to maintain employees.

Company benefits and services plans fall into the Compensation and Protection rhythm of the Human Resource Development theoretical account, ( Werther & A ; Davis, 1996 ) . Human Resource professionals have realized that the undertaking of recruiting and retaining qualified employees could efficaciously find the success or failure of the company. The Human Resource section of a company maintains an array of duties, to include enlisting, keeping, compensation, and to some extent, corporate civilization.

The Human Resources section spearheads the enlisting and hiring of qualified persons. This involves aggressive enlisting patterns, particularly when seeking technically skilled workers. Once hired, the section must guarantee that these persons are right placed or staffed, into places that correspond to their skill degree and abilities. Once these employees are in topographic point, the focal point displacements to retaining these persons.

It is when concern slows and retrenchment is a menace that workers become concerned with their occupations. However, in today? s economic system the employer is the 1 concerned with losing workers. These extremely trained persons have come to the company with a assortment of human capital: their ability, behaviour and energy ( Davenport, 1999 ) . Retention of these sought-after employees is important. Fitz-Enz identifies three costs of losing good employees as follows: employee-based costs, client keeping, and outgo in selling and gross revenues to win new clients ( Fitz-Enz, 1996 ) .

Any clip a company is forced to replace an attrited worker there is a cost. Attempts must be refocused on enrolling a replacing, pointing and developing the person. The company could lose valuable gross revenues chances among other possible losingss during this turnover.

Consumers can be volatile people. Some clients become accustomed to making concern with the same company representative. If the client becomes annoyed with the new employee, he or she may take their concern elsewhere. This consequences in net income loss for the company.

Finally, if a client were lost, the clip and money it could take to pull new clients would be a loss of net income for the company every bit good. Therefore, employees are a valuable plus to any company, and their keeping is important.

Compensation of employees is a cardinal component in the hiring and keeping of quality workers. Compensation does non needfully connote salary additions or wellness programs. Harmonizing to Leonard, to pull trueness from employees, a company should? show that it cares about their development by exposing them to things that help them turn? ( Leonard, 1999 ) .

? Corporate civilization? is a new cant repeating through the concern and Human Resource sphere. This term refers to the general working ambiance of the company, whether it is hostile, friendly, family-oriented, or bossy. In the recent yesteryear, employees were merely fortunate to hold work, and employers were at times autocratic. That environment has started to alter. As a society we are altering. Employees are people who want quality of life, non merely a payroll check.

The SAS Institute Inc. based in Cary, North Carolina is the universe? s largest in private held package company with an estimated net worth of 871 million dollars ( Branch, 1999 ) . SAS provides high quality package to concern and authorities bureaus. Founded in 1976 by Dr. Jim Goodnight, CEO, SAS presently employs 7,000 ( Kalgaard, 1999 ) . SAS has more than 3.5 million package users at more than 31,000 client sites in 110 states ( Maczka, 2000, paragraph 1 ) , and gross is expected to make 1 billion dollars by the terminal of 2000 ( Cole, 1999 ) . SAS has long been the taking supplier of statistical and informations analysis package. Its users are ferociously loyal, even as the market exploded in recent old ages with new package ( Stodder, 1997 ) . To remain on the taking border, CEO Jim Goodnight re-invests 33 % of SAS? s gross in research and development each twelvemonth, 2.5 times the industry norm ( Anthes, 1997 ) . What sets SAS apart from comparable package houses nevertheless, is the rate of keeping. SAS has a 5.9 % turnover rate, or approximately 130 people per twelvemonth, which is drastically lower than the mean 20 % rate ( Leonard, 1999 ) , or 1000 people per twelvemonth for a typical computing machine house ( Williams, 1999 ) . Harmonizing to Martinez, SAS? s high rate of keeping is attributed to its model labour dealingss and employee benefits plan ( Martinez, 1993 ) .

In a recent survey, random employees working in 1,116 fabrication companies were surveyed to obtain information on benefits and working conditions, ( Albertson, 2000 ) . Among the findings, the mean overall cost for periphery benefits for employees was between 29.3 to 29.7 % of paysheet, ( Albertson, 2000 ) . This per centum becomes more sensible when sing the high cost involved in turnover rates.

SAS has developed many advanced plans that keep their demographically diverse employees happy and loyal. Among the plans are an on-site child-care installation, an on-site medical clinic, a 35-hour workweek, a full gym and diversion country, two epicure cafeterias, and many other fringe benefits. Harmonizing to David Russo, Human Resources Vice-President, SAS encourages people to? hold a life outside of work? ( Willard, 1999 )

In 1981, when SAS was still a little company, several female employees became pregnant. CEO, Jim Goodnight realized that he could non afford to lose these valuable workers. In the cellar of the company? s 2nd edifice, SAS began its first day care centre ( Fishman, 2000 ) . Now the company? s pre-school installation boasts a 700 kid capacity, 10 times the figure of employees when the day care was foremost formed ( Fishman, 2000 ) . This benefit allows employees with households more flexibleness with child care, as the installation is located at the SAS composite. Harmonizing to a recent study, most such companies do non supply twenty-four hours attention for employees, ( Albertson, 2000 ) . Parents are free to pick up their kids for tiffin, or to halt in to look into on them. With 52 per centum of employees being adult females, this plan is appreciated.

SAS provides an on-site medical clinic staffed by 2 physicians and 6 nurse practicians ( Anthes, 1997 ) . This installation is available to employees and their dependants, and may be selected as their primary attention supplier. The clinic offers non merely medical attention but nutrition appraisal and instruction, physical therapy, massage or? emphasis? therapy, psychological guidance and inoculations every bit good ( Cole, 1999 ) . About no other such companies provide this service, ( Albertson, 2000 ) . By supplying this convenience to the employees, less clip is spent going to physicians for assignments.

In today? s universe of 60-hour workweeks, SAS is bucking the tendency. The company does non demand long hours from employees, although the industry norm is at least a 40 hr work hebdomad ( Albertson, 2000 ) . SAS enforces a 35-hour workweek ( Cole, 1999 ) . At 6:00 P.M. each eventide, the gate to the Institute shuts and even full-time employees go place for the dark. Harmonizing to Cole, Goodnight discovered that the productiveness curve beads radically after 5:00 P.M. ( Cole, 1999 ) . SAS employees are able to bask their eventides at place after picking up their kids from the company? s day care installation. Today? s coevals of workers non merely wants a terrific occupation, but a quality place life every bit good.

SAS employees have every ground to be physically fit. The company has a 36,000 square-foot on-site gym. Again, this is a rare service to industry employees ( Albertson, 2000 ) . The gym is furnished with cardio machines, a dance studio, a gym child-care installation, and an indoor lap pool. This installation is available to both employees and their dependents at no cost. To do it even easier to remain fit, SAS offers a free laundering service of gym apparels ( Anthes, 1997 ) . At the gym employees may buy a low-fat bite or tiffin at the nutrient saloon ( Williams, 1999 ) .

Unlike most such houses ( Albertson, 2000 ) , Two subsidized

on-site cafeterias make it easy to hold a good repast at SAS, where the mean cost is $ 3.44 ( Williams, 1999 ) . The nutrient service installations merely make adequate to maintain them unfastened. The cafeterias besides provide unrecorded piano music for diners ( Anthes, 1997 ) . Employees can look into the twenty-four hours? s bill of fare on their office computing machine ( Williams, 1999 ) . Because SAS has many international employees, the cafeterias offer? theme yearss, ? where formulas from assorted states are prepared ( Williams, 1999 ) . The cafeterias save employees the money and fuss of traveling outside the workplace for tiffin, and cut down on concern tiffins. Parents may pick their kids up from the day care installation and convey them to tiffin at the cafeterias, which are equipped with feeding chairs ( Fishman, 2000 ) . It is estimated that over half of the Cary location employees eat tiffin on the SAS premises ( Williams, 1999 ) .

When one SAS employee developed a carpal tunnel syndrome, the company realized that biotechnologies was a concern. SAS? s focal point on wellness and safety have brought about the staffing of two full-time biotechnologies specializers. The squad has no set budget and responds to jobs as they arise ( Mottl, 2000 ) . The end is for the workers to be comfy on the occupation and to hold safe milieus. Offices in the Institute are equipped with ergonomic keyboards, footstools and adjustable chairs. SAS besides believes that the workers? environment can either inspire or deject them. The company has built an on-site nursery to supply fresh flowers to offices ( Mottl, 2000 ) . An in-house creative person pigments pictures to hang in the 19 SAS edifices ( Anthes, 1997 ) .

CEO Jim Goodnight offers price reductions on belongings in his subdivision every bit good as to ranks to his state nine, and corsets at his hotel. Every white-collar employee has a private office and the chance to make a flexible work agenda ( Fishman, 2000 ) . All workers receive three hebdomads of paid holiday each twelvemonth with an excess hebdomad from Christmas to New Year? s Day. This contrasts greatly to the information found in Albertson? s 2000 study, where it was discovered that the bulk of companies require persons be employed for at least one twelvemonth to accrue two hebdomads of paid holiday, and the average figure of paid vacation is nine yearly ( Albertson, 2000 ) . There is no bound to vomit yearss for SAS workers, although industry norm is merely 17 % leting paid ill leave ( Albertson, 2000 ) . Employees besides receive a year-end fillip and net income sharing.

Other fringe benefits include an senior attention plan, an on-site ATM, a seting green, sky-lit speculation suites, association football Fieldss, baseball diamonds and pool tabular arraies ( Fishman, 2000 ) . SAS Institute besides recognizes domestic spouses in unconventional relationships as dependants. SAS employees are sweetened a spot each hebdomad every bit good with free M & A ; Ms on Wednesday, fresh fruit on Monday ( Anthes, 1997 ) , and free juice and sodium carbonate ever ( Fishman, 2000 ) .

SAS has been called the? sanest topographic point on the planet to work? ( Cole, 1999 ) . SAS has an substructure with small emphasis, handling employees as grownups. Vice President of Human Resources, David Russo says? policies and processs by and large are written for the 20 per centum of people who are traveling to go against them, non the 80 per centum that do right by them? ( Cole, 1999 ) . CEO and laminitis Goodnight? s doctrine is stated as such: ? It is of import to the success of the organisation that employees are treated with regard and attention ; that they are given interesting work to make ; that they are paid a just and competitory pay ; and that they are allowed to take part in the fruits of their labour? ( Cole, 1999 ) .

Potential employees in proficient Fieldss go through? SAS bootcamp? ( Leonard, 1999 ) . This plan includes 8 hebdomads of preparation, squad edifice and professional development to fix alumnuss for occupations within the company.

SAS Institute is surely non the lone package company in the Research Triangle Park country in NC. Compared to neighbouring companies such as Nortel Networks, IBM, and Cisco, SAS still stands in front.

SAS Cisco IBM Nortel

Flexible work Schedule Flexible work agenda available and standard 35 hr work hebdomad Telecommuting in some countries. Work agenda dependent upon location Flexible work agenda available, if standard work hebdomad is met Dependent upon direct supervisor

Fitness installation on-site or local rank On-site installation, or rank to local installation subdivision offices Fitness centre with professional staff. For employees merely Fitness centre Fitness plan, does non include installation or rank

Child attention Two on-site twenty-four hours attention centres Referral service Referral service Referral service

On-site cafeteria Two on-site epicure cafeterias Yes No No

Dry-cleaning service Yes Yes No No

Sick yearss Unlimited ill yearss, and wellness clinic on-site Can be earned with clip in company Can be earned with clip in company Can be earned with clip in company

On-site medical clinic Yes No No No

Vacation yearss Three hebdomads paid holiday, every bit good as a hebdomad off for Christmas Nine paid vacations per twelvemonth, holiday yearss can be earned with clip Ten paid vacations per twelvemonth, holiday yearss can be earned with clip Unspecified figure of yearss, dependent upon old ages with company

www.sas.com www.cisco.com www.ibm.com www.nortelnetworks.com

( Table 1 )

Assortment is another key to retaining employees. At the SAS institute, employees are able to easy travel from one place to another within the company. Harmonizing to Goodnight:

? It is highly of import to maintain employees motivated, to maintain the originative accomplishments fluxing and seek and construct an environment where they can boom in, reach their possible and experience challenged? ( Hein, 1999 )

Most of the company? s nest eggs come from non holding to enroll and develop new employees ( Nash, 2000 ) .

The SAS Institute has created a corporate civilization worthy of congratulations. The people at SAS think of themselves as a community and non merely colleagues ( Nash, 2000 ) . The company was named in the top 10 of Fortune Magazine? s 1997, 1998 and 1999? 100 Best Companies to Work for in America ( Branch, 1999 ) . It was besides listed by Working Mother Magazine as one of the top 10 companies for working female parents ( Cole, 1999 ) . Business Week conducted a Work and Family study in 1997 in which SAS ranked 4th ( Anthes, 1997 ) . These awards are testimony to the consequence of making a superior corporate civilization.

The SAS Institute Inc. is a company that values employee wellness, good being, and personal and professional growing as the key to success. It is a workplace that respects persons and encourages creativeness, quality, and invention. The doctrine is ; ? If you treat employees as if they make a difference to the company, they will do a difference to the company. The corporate civilization at SAS has built the concern strong, attracted gifted workers, retained those employees, and may good function as a theoretical account for other companies to emulate.

Mentions

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