Playing For Keeps: Incentive Programs Make Finding, Keeping Employees Simpler - Tire Review Magazine

Playing For Keeps: Incentive Programs Make Finding, Keeping Employees Simpler

Retaining Good Employees is Hard.

Finding New Ones is Harder.

Creating Incentives Can Make It

All a Lot Easier.

In attracting and training qualified new employees, you may be overlooking a valuable resource that you already have in your arsenal: your current staff. In today’s competitive marketplace, retaining current employees is key to the success of any tire dealer, whether large or small. Employee incentive programs can help you keep your employees happy and make them a more dynamic and productive part of your business.

How can you tell if your employees are satisfied with their work environment? This may be as simple as observing their interactions with customers and one another, but often requires a deeper look. If you run your shop as a close-knit

business and your staff is comfortable coming to you with their problems or concerns, it may be a good idea to ask them what they feel could be improved upon.

However, you might get more honest answers if you have employees fill out confidential questionnaires or surveys, since they may be more comfortable critiquing the business anonymously.

Ask your staff whether or not they’re satisfied with the pay, benefits and other perks you offer. Also, conduct exit interviews to document workplace trends or potential troublespots from your departing employees regarding the reasons why they chose to leave.

What you might find could surprise you. Maybe you need to adjust your pay structure. Or your staff may be quite happy with their pay levels, but would like to see other incentives. Whether it is in the form of straight pay, traditional benefits, beefed up benefits, growth and career opportunities or other incentives, you have a lot of tools available to retain good people and even attract top-notch talent.

Health Benefits
With the costs of healthcare today, offering your staff a medical plan is almost necessary to attract and retain employees. There are several types of plans available, so the best way to decide which will work best for your business is to research insurance agencies in your area and compare the plans and rates they can offer you.

“Unfortunately, most insurance agents are vultures; they have a tendencey to circle the prey and pounce on them,” says Ed Morrison, president of the benefits department for the Akron, Ohio-based Evans Insurance Agency.

“Employers need to investigate multiple varieties of health plans, and find somebody competent, somebody who’s not putting commission before the product, and arrive at something that’s affordable.”

To maximize employee health and productivity while minimizing sick days, Morrison suggests finding a plan that encourages routine checkups, like ones that offer lower copays, or a Health Savings Account (HSA).

“When you buy a car, you should have it serviced on a regular basis,” he says. “It’s important to keep the car tuned up and the proper amount of air in the tires. Just like a car, people need scheduled maintenance to stay in the best physical shape.”

Along those lines, choosing a plan that offers discounted health club memberships or wellness programs is another added perk for your staff. “That’s very important, especially for people who have chronic problems like diabetes, congestive heart failure or high blood pressure,” Morrison says.

For smaller companies, he generally recommends HSAs as a way to give employees the best deal for their money. Under this type of program, contributions from an employee’s paycheck are deposited into a savings account, which can be used for doctor visits, emergency services or any health-related expense like prescriptions, bandages or over-the-counter medicines.

“I’m really a supporter of HSA programs,” Morrison says. “Would you rather give a premium to an insurance company, and if you’re healthy the insurance company gets a profit from you? Or would you rather take your own money and invest it into an account where you’re holding onto it, because what you don’t use rolls over for the next year? It’s a clear advantage to employees.”

If you already offer your staff health insurance, it might be a good idea to call your healthcare insurance provider and ask how you can supplement existing benefits. You may be able to offer your employees new benefits and perks without spending a lot of cash.

Some traditional providers offer prenatal care, smoking cessation and weight loss programs, gym subsidies, onsite flu shots, CPR training and retiree healthcare benefits. You could also look into adding dental or vision insurance, which will be a valuable asset for your employees.

Financial Incentives
In today’s challenging economy, salary is among the largest factors that determine which jobs people will apply for, as well as how long to stay in their current position. Investigate if the amount you offer your employees is comparable to other shops in the area. If it’s drastically lower than many of your competitors, you could be in danger of losing valuable employees.

To benefit your business while keeping employees happy, consider connecting wage increases to performance, or to meeting specific goals in customer service, sales or profitability.

Understandably, it’s difficult for a small, one-location dealer to compete with larger and perhaps more established businesses, but keep in mind there are other things you can do to offset any imbalance if you can’t afford to increase salaries.

In addition to their pay, other financial opportunities play an important part in employees’ job satisfaction. Setting up retirement funds, profit sharing systems or bonuses are excellent ways to offer your staff a perk that other shops in your area may not.

401k plans have proven to be very popular with employees because they’re flexible, easy to use and offer tax deferral. An employee’s contribution to their 401k is automatically deducted from their paycheck, before the money is taxed. The contributions are then invested into one or more funds provided within the plan.

Employers often match some percentage of their employees’ 401k withholding. If you are able to do so, this is the most attractive option for your staff. By offering them a vested plan, over a five-year period, for example, your workers are required to stay with the company for a minimum amount of time before they are entitled to take any of your contributions with them when switching jobs or retiring.

Even if you can’t afford to match employee contributions, setting up retirement counseling or a non-contributing 401k plan is a benefit to your employees. Most will appreciate the opportunity to invest in their future, in addition to the concern you are showing about their financial security after retirement.

Many business owners give end-of-year or holiday bonuses as a reward to employees for their hard work throughout the entire year. Some bonus programs are done on a flat dollar amount, while others may be tied to a percentage of the individual employees’ weekly, monthly or annual pay. Still others are tied to specific profit goals.

But what if business didn’t go as well this year as it did last year and you can’t afford those bonuses, even though your employees may be expecting it? Here are some less expensive ways to show your appreciation:

  •  Hosting a holiday party by renting a room at a local restaurant or having something catered to your shop. An added perk would be to hold the party early in the day and let your staff go home early with full pay.
  •  Partner with other businesses that may be able to provide products or services that would make nice gifts for your employees. Arrange a trade or discount with other small companies you do business with or are on a friendly basis with.
  •  Gift cards are a modest thank-you, but if you choose them based on each employee’s tastes and interests, they are a thoughtful way to show your appreciation.

An increasingly popular way to offer your staff an added financial incentive to stay involved with your business is to develop an Employee Stock Ownership Plan (ESOP). Through this program, employees can buy stock in your dealership directly, be given it as a bonus, or obtain stock through a profit sharing plan. ESOPs are most commonly used to provide a market for the shares of departing owners of private companies, to motivate and reward employees, or to take advantage of tax incentives.

Under an ESOP, employees receive stock in the company that is put into a retirement account. Though ESOPs began when legislation was created in 1974, they have become more popular since 1998, when a law was passed that made the plans more attractive to smaller companies.

Instead of paying corporate taxes, a small company’s owners pay individual income tax on their share of the company’s profits. Businesses that are 100% employee-owned pay no immediate tax on the corporate profits because the owners are putting the money into tax-deferred retirement accounts.

As a benefit to business owners, employees under an ESOP often work harder to increase profitablility and share value, since they now own a piece of the business. This could result in workers actively seeking to improve customer service and efficiency, while at the same time reducing costs – an added bonus for you.

About 10 million Americans work at 11,500 employee-owned companies, according to the ESOP Association, located in Washington, D.C. An example of this trend in the tire industry is Potosi, Mo.-based Purcell Tire & Rubber Co., which became an ESOP company in 2002.

Owners Bob and Juanita Purcell, who sold 100% of the business to their employees at that time, bought back the company earlier this year for $100 million, roughly the same amount they had sold it for. The couple decided to purchase Purcell Tire after several potential buyers expressed interest in 2006.

Now, their employees who participated in the ESOP will receive a portion of that sum, determined by salary and number of years with the company, and their proceeds will mostly be deposited into retirement plans. It turned out to be a win-win all around.

Alternative Offerings
If you’re looking for even more ways to keep your employees happy, just get creative. As the owner of your own business, you have the freedom to offer your staff unique perks and incentives. Here are some ideas to get you started:

  • A well-stocked and comfortable break room
  • Free training programs or educational assistance
  • Health club memberships
  • Attendance incentives
  • An employee of the month program
  • Extra vacation days each year, including optional unpaid days off
  • Added short breaks during the day
  • An attractive, clean and inviting work envirnonment
  • Employee discounts on vehicle repairs or tires
  • Recognition for successfully completed projects
  • Offering challenges and growth opportunities
  • Paid time off, instead of separate sick or vacation days

You could even employ some of your business resources to help employees. Consider asking your accountant or tax expert to provide free counseling on financial or tax matters.

Approach your bank to provide special “employee only” banking packages with reduced account fees or access to loan specialists. Perhaps your investment expert could provide free investment advice for your employees, especially if you offer a 401k program.

In addition, many employers are now offering flex scheduling in which employees are given more control over setting their daily work schedule. This is attractive for workers with children who may need to be home at certain times of the day, as well as those with long commutes who can take advantage of light-traffic periods.

Two options of flex scheduling include compressed work weeks, where employees work longer hours but fewer days, and job sharing, where two part-time employees share the same full-time position. Of course, this all depends on the number of employees on your staff and the hours and days your shop is open.

As you can see, there are endless ways to offer your employees incentives. To help you see how you stack up against dealers nationwide, note the following results from a 2007 Tire Review Dealer Profile:

  • 86% of dealers offer paid vacations and holidays
  • 77% provide uniforms
  • 63% offer free training
  • 53% offer medical coverage
  • 37% offer an annual bonus or 401k
  • 4% said they offer no benefits at all

However you choose to keep your employees happy, take the time now to address retention issues at your shop. Working now to create employee incentive programs is a much better alternative than finding yourself in a serious staffing shortage a few months or years down the road.

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