Employee Benefits: Keeping the 'Good People'

Ask most show management CEOs about the secret to success and the first words out of their mouths are, "Good people." Then ask these hypothetical CEOs where those "good" people come from and they're likely to say, "Good question."

But they come from somewhere, and once you have them, you want to keep them. The obvious answer to how one accomplishes that is, "Compensate them."

The next stop — after base salary and core benefits — can be anything from health club memberships to employee stock ownership plans to pet insurance to domestic partner coverage.

According to Mercer, a compensation consultancy, the rule of thumb is that employee benefits add at least 30 percent to the cost of compensation above and beyond salary. Mercer reported that the 2007 average group health care cost alone will be $7,983 per employee.

That's a hefty price tag for so-called "good people," before you even get into the extras that make you competitive with others looking for their own special folks.

"What employee does not wish they could have 100-percent coverage of medical and drug costs, 100-percent choice of physicians, no insurance hassles and no payroll deductions," asked Suzanne Bragg, vice president of benefits and compliance for Freeman. "However, this is not feasible given the costs of health care. Therefore, finding creative ways to continue providing excellent benefits at affordable premiums remains a huge challenge."

No kidding, echoed Michael Green, executive vice president of Hanley Wood Exhibitions, explaining that, regardless of what goes on behind the scenes in designing a package, "a company today must offer a full menu of employee benefits. Otherwise, during the hiring process, when we get to the conversation where we discuss benefits, we are introducing a negative."

That's why Sara Scogland, IDG World Expo human resources manager, has with each prospective employee a conversation that goes above and beyond the usual job interview. She agreed today's job seekers are more knowledgeable than ever about employee benefits, but once in a while you can still surprise them with a perk they weren't expecting.

"IDG offers a broad range of core and supplemental benefits," Scogland said, "yet, when we say we also offer $200 a year as a fitness reimbursement, for health club memberships or even personal fitness equipment, we see eyes light up."

By the way, IDG also offers long-term employees, on their 20th anniversary of service, a financial bonus to be used for the vacation destination of their choice.

Easy for industry giants like Hanley Wood, Freeman or IDG to say and do, right? However, according to TSW's current show management survey (see Page 1), the average show management firm has revenue of a mere $3.7 million. For some of them, a competitive health care package is hard to come up with — never mind reimbursement for personal fitness equipment.

So, what is a smaller company to do? Luckily for them, their industry trade organization, the Intl. Assn. of Exhibitions and Events, is a small organization itself, with a staff of 22, and understands their concerns. According to Cathy Breden, executive director of IAEE Services, the cost of employee benefits has been "a huge concern."

"Having such a small staff, a couple years ago we were looking at 30- to 45-percent yearly increases in health care costs," Breden said. "We just couldn't absorb that."

However, she had a plan: "We found a company called TriNet, completed our due diligence, and eventually outsourced our payroll and benefits program to them, using their predetermined lineup of benefits," Breden said.

As with many small organizations and companies, IAEE was able to take advantage of an economy of scale by being part of a larger organization that covers some 30,000 employees. As a result, the group's health care-cost increases suddenly were within the 6-percent national average and, Breden said, "we were able to offer an expanded range of benefits as well."

Eventually, IAEE Services was able to develop a partnership with TriNet that allowed the same services to be offered to all IAEE members.

"Big and small companies are all drawing from the same talent pool, so competitive benefit programs are a must," Breden added.

Still, human resources managers are always looking for that one benefit that helps them grab the next hot candidate. According to Nicole Jones-Gyllstrom, Mercer senior consultant and practice leader, coverage for domestic partners is becoming more prevalent nationwide.

And when a career is over? The favored retirement plan in the tradeshow business, as it is with most other sectors, is the 401(k) plan, although Reed Exhibitions still offers a pension plan, in addition to a 401(k). (Reed Exhibitions and Reed Business Information, which owns Tradeshow Week, are business units of Reed Elsevier.)

Retirement is sweetened at privately held IDG and Freeman with Employee Stock Ownership Plans. At Freeman, 38 percent of company stock is owned by employees. Officials at both firms said ESOPs help keep their turnover rates below the national average, giving the company what Bragg called "the freedom of long-term thinking."

While many companies in the tradeshow industry consider flexibility in terms of work hours and locations an employee benefit, Green said Hanley Wood is somewhat of a maverick on this issue.

"We focus on building our employees' careers, so we want our people on site to absorb what we have to teach," he added. "Out of 100 employees, we have only three who are not assigned to our office here (in Dallas)."

Because many employees participate in open enrollment periods at this time of year, what kinds of changes might they see on the horizon for benefits? Consultants agree the emphasis will remain on containing health care costs. More plans will offer high-deductible alternatives, wellness programs and online tools to evaluate health care costs and outcomes.