Recruit, retain and retire. A key to a successful business, say human resource directors, is long-term relationships with employees. The foundation of this success is making employees happy. One way to do that is by providing a scrumptious benefits package. With the complications associated with stock options and the rising cost of basic health care, employers are getting creative with their benefits and providing a smorgasbord that offers everything from on-site massage therapy to flexible working hours to legal services to insurance for the family pet.

While benefit packages vary widely and the unemployment rate suggests a number of hiring candidates, Cláudia Schwartz, founding principal of HR Results and director of the HR leadership program at UCSD, says it is important for companies to pay attention now to employee satisfaction. Research shows by 2010, American employers will face a labor shortage of 10 million people. “Employers that master the attraction and retention of top talent now can zoom by their competition in a few years when the lack of skilled employees catches them unprepared,” she says. “Being an employer of choice is not a nicety; it is a business strategy.”

If a company excels in its retirement benefit offerings, top employees will stay. “If you can attract and retain, it’s really worth it,” Schwartz says. “It’s happening right now with large and small companies that are investing in their retirement plans.”

Employers need to design their benefits with a clear intent of attracting and retaining aging baby boomers.“The employee population has a high sense of entitlement when it comes to benefits,” says Valerie Gieseke, vice president of programs for the San Diego Society for Human Resource Management and a senior consultant for Tri-Ad, a full-service benefits consulting and administration firm. To meet those expectations, it is up to employers to come up with options that provide the most benefit to their employees. Those options aren’t always costly.

Stock market options have sunk in popularity, with many issues essentially worthless. Also, laws have changed to limit the amount of stock one can offer employees.

Employers are saying “There must be something other than stock options that we can do to attract and retain some of our key employees,” says Lin Ball, vice president of the Epler Co., an employee benefit and consultation firm. “So companies are getting creative in their offerings. Additional matching to 401k plans and creative health benefit packages are the new consideration. Defined benefit pension plans are out.”

Health insurance is the next big area of concern. The cost of preferred provider option premiums in San Diego is increasing from 15 percent to 20 percent annually and health maintenance organization premiums are rising anywhere from 8 percent to 12 percent. “On average,” Ball says, “most employers pick up between 75 to 80 percent of the premium cost for health insurance. What they are finding is they can’t afford to do that.” In a recent report by the Epler Co., of 135 companies surveyed, 27 percent changed carriers and 43 percent increased copayments, deductibles and premiums.

“One thing I have seen is more voluntary types of products are being added to employers’ plans,” Ball says. “They are adding voluntary long-term care insurance plans and long-term disability plans. They are voluntary because employers can’t pick up the cost anymore, but they don’t want their employees to be without it. The employer makes it available on a payroll deduction basis, to make it easy, but they aren’t paying any of the cost.

“I see 22 percent of the companies are offering long-term care insurance plans,” Ball continues. “I can tell you, five years ago you’d be lucky to see 2 percent of the companies offering it.”

Long-term care is something the baby boomer generation is realizing is inevitable and beginning to consider important as they witness their parents’ situations, Ball says. The average cost of a nursing home in San Diego is $45,000 to $50,000 a year. Long-term care insurance will help take care of some of that cost. Tom Mazzocco, vice president of human resources at the San Diego Convention Center, says a long-term care program is something that appears to be coming up more and more.

“We are looking right now at a plan where (employees) can buy an insurance policy for when they become disabled or become in an elder-care or assisted-care home,” Mazzocco says.

The Convention Center provides full- and part-time employees with a benefit package that covers the necessities. “We have a good benefit package in that we don’t have a lot of different things but we have programs that are cost effective,” Mazzocco says. “We have the typical. We offer two choices of health benefits and two choices of dental benefits plans. We have life insurance, supplemental life insurance. And we have catastrophic or cancer care insurance that can be purchased.”

The catastrophic policy is a supplemental plan for those who get diagnosed with a disease such as cancer and have to go through chemotherapy and may miss work due to illness and treatment. Taking it a step further to accommodate employees, the center shares the cost of the benefits with its employees.

Will You Hear It Then?

Another kind of coverage that is starting to catch on, Ball says, is hearing-aid insurance. Health care covers hearing tests but not the hearing aid. Also more popular are cancer and accident plans.

The more ingenious benefits include pet health insurance plans, flex time, more paid time off and continuing education programs.

Internal training programs are widely used by employees at DataQuick, says Barbara Bass, director of human resources and development. The La Jolla-based provider of real estate data encourages its employees to attend the in-house classes. It also offers a program that gives tuition assistance to employees and managers who want to return to school to obtain an advanced degree. Bass says in today’s economy it’s more beneficial for employers to offer quality benefits instead of a large quantity of benefits that tend to be used by only a select few. As a morale booster, DataQuick provides employees with an on-site workout room, team building experiences and health fair. “Many employees get so busy they don’t have time to go get health checkups on their own,” Bass says. “So we bring it here.” The fairs include massage therapists, a chiropractor and body fat testing. At one time the company did offer pet health insurance but, Bass says, the packages weren’t that great and not many employees were taking advantage of the benefit.

Group legal services, credit union memberships, adoption assistance and paternity leave also make DataQuick a place where employees like to work. Last year, the firm received the SHRM Crystal Award for being one of the best places to work.

Achieving Balance Creates An Allegiance

It’s not always the package that builds employee loyalty. The work/life balance can be what attracts the very best employees, Schwartz says. “Flexibility is priceless,” she says.

The Epler Co. benefits survey found about 52 percent of San Diego companies have a business casual dress policy. Flex time, which Ball says is very big right now, is offered by 37 percent. Only 19 percent offer on-site fitness programs and 27 percent pay for or subsidize off-site programs.

At little cost to employers are benefits like flexible working hours and the ability to work from home. Also accommodating are part-time schedules. Gieseke at Tri-Ad works 30 hours a week and much of that is from home. “It’s one of the key reasons I’m here,” she says.

At North Island Financial Credit Union the philosophy is happy employees make for happy customers. The benefits package, which offers everything from on-site massage therapy to legal service to paid time for community service to insurance for the family pet, promotes employee health, well-being and satisfaction. “Providing a good place to work makes business run smoother,” says Janet Owens, vice president of benefits and compensation.

Owens says employees are looking for a better work environment and to get the good employees, employers are making their benefit offerings richer. “We do an annual benefit survey to make sure we’re fulfilling employee needs,” she says.

Pet health insurance and the addition of a PPO to the HMO health care package are direct results of the benefit survey. “This was no small feat considering how the cost of health care is going up,” Owens says.

NIFCU also wants its people to be as healthy as possible and offers cash incentives for annual physicals and smoking cessation programs in addition to an on-site gym and aerobic classes at its headquarters. The quest for knowledge is something that ranks big with employees and encouraged by NIFCU with 0 percent computer loans, paid computer training courses and in-house leadership training. Also offered is extended time off, without pay, for schooling and education loans and scholarships.

Owens, who has been with NIFCU for 25 years, says she believes the benefits program helps employee retention. It is common for an employee to remain with the company for 10 years. Owens says the benefits and great retirement package — which can provide retired workers nearly 80 percent of their salary — are part of what has kept her from looking for a new job.