Free benefits come with a price

You never know when a simple comment will have a significant impact; sometimes that’s not even the source’s intention.

This happened to me while talking with my mother about renewing our company’s medical insurance package. While she isn’t involved in day-to-day business activities, she’s aware of what’s going on and offers her experience and insight about such matters, and I’m good with that because the increasing complexity requires more than one set of eyes.

During our discussion, she made an observation that I realized afterwards was noteworthy. She said, “You know, free benefits and perks to employees aren’t a good idea, because when the time comes that you have to cut them or ask employees to contribute, it creates a lot of stress and difficulty.” Unfortunately, she’s right. I’ve come to the sobering reality that offering them often backfires, not providing the loyalty and appreciation you would think.

This situation goes back a few years, when business was robust and benefits were generally more affordable. In an effort to enhance employee enthusiasm and make our shop a more attractive place to work, I recommended we pay 100 percent of all employees’ medical insurance premiums, a benefit I was convinced would be appreciated. Indeed, a few who had worked for other companies realized this was a nice perk; however, many lost sight of this benefit within its first year of existence, because they became accustomed to the additional income for company-paid health insurance premiums, so any change to that revenue stream created financial difficulties.