The Twin Cities labor market has not been this tight for salaried employees since the 1990s. The unemployment rate nationwide for people aged 25 and above with at least a four-year college degree was only 2.2 percent, according to a recent jobs report. That compares with a total unemployment rate of 3.9 percent.
To attract and retain workers in this type of labor market, companies are finding they need to offer more than just a competitive benefit package. “There were times in the 1990s when the labor market was just as tight,” says David Lyman, principal at LymanDoran, an executive search firm in Minneapolis. “We are now seeing candidates with multiple opportunities and offers.”
David Magy, principal in Abeln, Magy, Underberg and Associates, an executive search firm in Wayzata, agrees. “We recently called a candidate for a vice president of operations position who said, ‘This is the third call I’ve received like this this month.’ We have to have a really compelling story to get someone to listen to us,” Magy notes.In terms of traditional benefits, large companies set the tone, but small companies are leveraging their ability to be nimble in attracting and retaining talent. “Small companies are shortening the interview process and reducing the number of interviews to compete with larger companies. Smaller companies are moving more quickly and efficiently to scoop up candidates,” says Terri Naughtin, CEO of the Naughtin Group, an executive search firm in Minnetonka.
Compensating for health costs
Escalating costs for health care benefits are a financial challenge for employers, particularly for small to midsized firms. “Benefits are key to attracting employees,” says Libby Doran, principal at LymanDoran. “Candidates are taking a look at total rewards and are much more analytical in that process. They are doing side-by-side comparisons of what they currently have and what is being offered.”
Magy recently pulled together an offer from a medical device company for a candidate whose current employer had a generous health plan. “Our client’s heath care plan was not as rich, and with 350 other employees, the company couldn’t just change its health plan for this individual. So they offered to make him whole financially, adding additional money to the offer to cover his health care costs for years.”
That type of innovative solution is becoming more common in recruiting and retaining talent. Because many companies are finding they have to pass more of the cost of health care to their employees, as a counter balance they are layering on creative alternatives.
“Health care is an area that can be challenging, knowing we can’t compete with the plans and policies that some of the larger companies offer,” says Peter Petrulo, partner in Zeus Jones, a product innovation and branding company in Minneapolis. To compensate, Zeus Jones offers a competitive health care plan plus several wellness benefits that employees can take advantage of, including ZJ Fit, an early-morning fitness group that meets twice weekly at a nearby gym. The firm also recently added bike storage and showers at its downtown facilities and is currently piloting the Life Time Health program with Life Time, which gives employees access to personal coaches specializing in nutrition and exercise.
Medical device manufacturer Medtronic has pushed the wellness bar even further by offering an on-site clinic at its Mounds View facility. “Our Well at Work program covers employees and their dependents, who can visit the clinic for whatever they have going on healthwise,” says Denise King, vice president of Americas Benefits COE and Total Rewards Operations for Medtronic. Medtronic also offers employees and their spouses on-site flu vaccines once a year.
Clockwork, a business-to-business digital technology solutions firm in Minneapolis, periodically brings in a massage therapist for interested employees. “Employees pay a nominal fee for a massage, mostly to ensure they keep their appointment,” says Nancy Lyons, founder and CEO of Clockwork, who speaks on the intersection of leadership, entrepreneurialism, technology and people.
For early- to midcareer employees, parental leave can be a deal-breaking benefit. Zeus Jones recently extended its parental leave policy to 12 weeks and added a flexible transition plan that allows new parents the ability to work from home one day a week during a four-week back-to-work transition period. Clockwork also has a generous family leave package, and its Babies at Work program allows parents to bring their babies to work once they have exhausted their family leave benefits.
In May, Medtronic expanded its family leave policy, a broad benefit that covers a wide range of family care needs, including time bonding with a new child, caring for ill family members, or caring for family after a spouse, child, or parent is called to active military duty. The policy allows up to six weeks of paid time away from work and is in addition to maternity benefits for birth mothers.
“We intentionally designed an inclusive, broad family paid-leave program to support our employees’ needs,” says King. “By early August, more than 100 people had already taken advantage of it for a variety of reasons.” For example, one employee took family leave to care for her mother who underwent a serious surgery, while another used it to care for a sick child.
Offering greater flexibility
Flexibility and life-work balance are buzzwords in today’s work environment but they have vastly different meanings within companies. “Candidates are valuing and asking for flexibility,” Doran says. “In some cases, they are being heard, and in some cases, they are not. More and more candidates are asking to work from home.”Doran’s partner Lyman notes that one candidate recently asked the offering company if he could commute from the Twin Cities to Fargo for a period of 40 weeks. As part of the request, he wanted the employer to pay mileage and agree to a Monday- through-Thursday 40-hour workweek. After that period, the candidate agreed to move to Fargo.
While some companies try to accommodate these types of requests, others aren’t quite as nimble, and still others view flexibility as a given today. “When we call candidates who are gainfully and happily employed they say, ‘I have flexibility where I am. I can work from home.’ But employers are saying, ‘That is something you earn. We need your face. We need you in the hallways and in meetings,’ ” Magy says.
Tech companies have a reputation for being the most flexible. “They can offer virtual work environments. They are extremely flexible. Some allow their employees to work from home full time or several days a week,” Naughtin says. To monitor this, companies use technologies such as instant messaging. “If an employee is not responding within an hour or two, something is not right,” Naughtin adds.
Personal time off (PTO) is an area where most companies can be flexible. “Small to medium-sized companies can make adjustments when hiring. If someone needs more vacation time, they’ll make that happen,” Magy says.
Doran agrees, “Companies can be flexible with PTO. Companies are flexing in this area more than they have in the past. They are honoring the work history and length of career of the candidate.”
Companies have traditionally assigned dollar amounts to benefits like PTO to attract and retain talent, but today, some companies are changing the definition of both flexibility and PTO. “Large organizations define what benefits should look like. But small companies like mine have conversations around perks, like flex time and telecommuting — which should be givens today — and free food and alcohol,” Lyons says. “No one has ever taken a job at Clockwork because there is beer here, though, and if they did, I would worry about them.”
No time-off limits
Clockwork is one of a growing number of companies that doesn’t track PTO. “You get the vacation time you need,” Lyons says. “We have never tracked vacation. We don’t track PTO. We aren’t concerned about people abusing these things. If they do, they are not aligned with our values. We’ve had people go to Africa for a month, to Thailand for a month. They do what they have to do to enrich their lives.”
Zeus Jones has a similar policy on PTO but encourages its team to work on-site. “We have a different perspective on what flexibility involves. We don’t track employee hours and our vacation policy is that we don’t have a policy. Some people take advantage of that more so than others, but no one has abused the policy in 10 years. We rely on our employees to be responsible individuals,” Petrulo says. “We encourage them to be in the office because we believe there is a magic that happens when we are working together in our space. We have people that come in later and are here until 8 p.m., and we have people that come in super-early and leave early.”
At Medtronic, field and high-level employees don’t accrue vacation or record vacation time either, but they are asked to look to the policy of what other employees are allowed and design their time off accordingly. By law, non-exempt employees have to record and accrue vacation. By not tracking vacation time for exempt employees, companies avoid carrying the liability of unused PTO into the next fiscal year.
Finding and keeping the best talent often requires ingenuity. Naughtin points to a manufacturing firm with a novel student apprenticeship program. Apprentices agree to work for the company for a set period after they graduate. In return, the company helps pay off their student loans. Another firm, Plymouth-based Amplifon, is introducing a benefit that helps employees pay off their student loans, beginning at $100 per month above what the employee pays. Payments can increase over a three-year period based on an employee’s work performance.
Corporate culture, sometimes referred to as the health or feel of an organization, is another factor that employees are looking at these days and companies are touting.
“There is an emotional response to how it feels to be at work. Long ago we separated emotions from work, saying you don’t get to have emotions at work,” Lyons notes. Allowing employees to bring their entire self, including their emotions, to work creates a culture of inclusion. “A lot of organizations are trying to diversify, but if we create a culture of inclusion, the diverse workforce will come,” Lyons adds.
Clockwork has been intentional in creating energy that is open, transparent and accepting, including offering employees gender-neutral bathrooms. “Accepting means I value you for what you bring that may be different than what I bring,” Lyons says.
One consumer retail company that Naughtin works with recently refurbished its office space, eliminating individual workstations and adding work clusters for meetings as well as open seating areas. “The furnishings are almost what you would see in a home — comfortable soft goods, chairs and sofas, in multiple vignettes,” she says. Companies are also bringing firms like Starbucks or Einstein Bros Bagels in-house.
“Productivity is increasing in these spaces,” Naughtin notes. “Companies are asking how they can energize millennials and the X-ers, and how they can keep them. The younger generations don’t have the same mindset the boomers had. They need challenges. They need variety.”
Many of today’s employees also want to know that what they do is helping their communities or the environment. Many companies have latched onto that desire by giving employees additional time off to volunteer or by matching donations to charitable causes. Others are making larger statements. For instance, Clockwork will give its employees Election Day off, while Zeus Jones is pursuing B Corporation status. A certified B Corporation is a business that has met verifiable standards for social and environmental performance, public transparency, and legal accountability to balance profit and purpose, according to B Lab, a community of B Corps.
“We are always looking for nontraditional ways to add value for our people and to our business. Becoming a B Corp is valuable to our employees who want to find more meaning and purpose in work,” Petrulo notes. “It’s about holding ourselves to a higher standard and setting more ambitious goals toward making a positive impact on our community and the environment.”
Fran Howard is a St. Paul-based writer and editor.
This article is reprinted in partnership with Twin Cities Business.