Like so many other employers, The Bolles School grappled with how to cut expenses when the recession hit. The organization looked for ways to operate more efficiently and, in fact, cut many expenses.
But it made a conscious decision not to reduce or cut certain coveted employee benefits, including 100% employer-paid medical insurance premiums, 100% employer-paid short- and long-term disability premiums, and a 100% match for eligible employees who contribute at least 10% of their pay to a 403(b) plan.
Recognition for Benefits
The organization, which operates four independent schools in the greater Jacksonville, Florida, area, employs approximately 400 faculty and staff members and has about 1,700 students.
A past recipient of a “best places to work” award from the Jacksonville Business Journal, Bolles was recently recognized as one of The Principal® 10 Best Companies for Employee Financial Security—2010.
“Adversity inspires innovation, and that’s what our panel of judges found with this year’s winners,” said Luke Vandermillen, vice president at The Principal Financial Group®. “They worked with employees to find creative ways to cut expenses without cutting benefits. They focused on adding and improving benefits that really meet the unique needs of their employees. And they greatly expanded wellness programs to hold down healthcare costs.”
Winning companies also “share significantly in the cost of health care,” focus “on helping employees become better healthcare consumers,” and provide one-on-one meetings with financial professionals or benefits specialists, according to The Principal Financial Group.
In addition to paying life insurance and short- and long-term disability insurance premiums for employees who work at least 30 hours per week, Bolles (www.Bolles.org) pays 100% of medical insurance premiums for employee-only coverage. (It does not offer spousal or dependent coverage.)
Employees can choose between two medical plan options in either a copayment plan or a coinsurance plan, says Nancy Greene, the school’s chief financial officer. Since the plans are “predicated on promoting good health,” there are no deductibles for many routine services and doctor visits; employees pay only their copayment or coinsurance amount, depending on the type of plan they choose.
Bolles also educates its faculty and staff on the benefits available to them and how they can reduce their healthcare costs (e.g., using nonformulary prescription drugs), Greene reports. She says one employee saved more than $3,000 per year based on the education the school provided.
Effective HR Tools
Noting that “independent school salaries typically lag behind” salaries paid at other schools and that geographical differences in employee compensation come into play, Greene says the school’s insurance plans and 403(b) match are valuable recruiting and retention tools.
Other perks, such as multiple paid holidays, a new sick leave bank, and free lunches for the faculty, also drive the school’s recruiting and retention efforts. Voluntary turnover is only 2% at Bolles, and the average tenure for faculty members is 16 years, Greene says, noting that the school is inundated with résumés whenever it has an opening. “It never ceases to amaze me how interested people are in working here.”
Under the 403(b) matching plan, the organization will match 100% of employee contributions for employees who contribute at least 10% of their pay, are at least 21 years old, work a minimum of 20 hours per week, and have at least 2 years of service at the school, Greene says.
More than 90% of employees contribute to the plan, and although there are a few employees who contribute less than 10% of their pay (and, as a result, do not qualify for the match), the average deferral is 10%, she reports.
The school also provides investment education to employees through its 403(b) plan administrator, who discusses plan options with groups of employees and, when necessary, one-on-one.
Advice to Consider
When deciding what employee benefits to offer and maintain, Greene says it is important to “keep focused on your best asset” by identifying the benefits that are most important to employees and the benefits that best meet their needs. She also recommends educating employees about available benefits and how to use them.
Greene says employers have a responsibility to help employees prepare for retirement, but the type of plan—and, when applicable, the amount of the employer match—will depend on the organization’s mission and resources.