The Effect of Innovative Benefits and Services on Employee Retention












WEBSTER UNIVERSITY

GRADUATE SCHOOL




THE EFFECT OF INNOVATIVE BENEFITS AND SERVICES ON

EMPLOYEE RETENTION AT SAS INSTITUTE, INC.

by






A paper presented to the
Graduate School of Webster University
in partial fulfillment of the requirements
for the degree of Master of Arts


July 26, 2000

Pope Airforce Base, NC












Abstract


Employee benefits programs are crucial to the recruitment and retention of employees in any industry. Effective programs enable employees to better cope with the demands of home and the workplace. These same policies can also contribute to lower employee turnover rates, retention of qualified employees, and motivation of workers. The computer industry has become the leader not only in technology and business, but also in the need for technically qualified employees. This personnel demand and the strength of the economy have created a job market in which skilled individuals are difficult to retain. SAS Institute Inc., based in Cary, NC has successfully created a corporate work environment that has significantly benefited the company, and placed SAS as one of the most desirable companies to work for in the US.

Table of Contents
1. Overview……………….……………………………………………………….…Page 4, Paragraph 1
2. Demand for competent employees in today’s economy…………………………..Page 4, Paragraph 2
3. How benefits and services falls fits in HR model…………………………………Page 5, Paragraph 1-2
4. Human Resource department responsibilities
a. Recruitment…………………………………………………….….………….Page 5, Paragraph 2
b. Retention…………………………………………..……Page 5, Paragraph 3-Page 6, Paragraph 3
c. Compensation……………………………………………………………..….Page 6, Paragraph 4
d. Corporate Culture……………………………………………………………..Page 6, Paragraph 5
5. The SAS Institute:
a. Background……………………………………………………….…………..Page 7, Paragraph 1
b. Comparison of benefits study by Albertson………………………………….Page 7, Paragraph 2
6. SAS Benefits:
a. Child care facility…………………………………………………………....Page 8, Paragraph 2
b. Medical Clinic……………………………………………………………….Page 8, Paragraph 3
c. 35-hour work week………………………………………………………….Page 9, Paragraph 1
d. Fitness facility………………………………………………………………Page 9, Paragraph 2
e. Cafeteria……………………………………………………………………..Page 9, Paragraph 3
f. Ergonomics………………………………………………………………….Page 10, Paragraph 1
g. Vacation/sick days…………………………………………………………..Page 10, Paragraph 2
7. Comparison to similar companies……………………………..………………...Page 11, Paragraph 4
8. SAS Awards and other recognition……………………………………………...Page 12, Paragraph 2
List of Tables/Appendices
1. Table of company comparison…………………………………………………...Page 12
2. Data extract: Study of benefits and working conditions among manufacturers…APPENDIX A


In the computer industry, as in any industry, companies are always striving to
attract and retain skilled, loyal employees. In today’s thriving economy, this task has become a challenge for some companies. Skilled workers have become free agents who can invest their human capital in the companies of their choice. The Human Resources department is at the forefront of this challenge, tackling recruitment, retention, compensation, and contributing to corporate culture. SAS Institute Inc. is a software manufacturing company that has recently risen to the top in both business and financial success, and also in employee retention rates. SAS’s innovative approach to treatment of its employees has made the company an example of how an effective employee benefits program can reap rewards in many aspects of the business. The list of employee benefits and new-age perks is striking. A recent survey was conducted (see Appendix A), in which the benefits and working conditions among manufacturers were compared. SAS Institute provides better benefits at a significantly higher percentage than most companies, (Albertson, 2000). Although competitive companies offer similar benefits and services, SAS remains a leader, evidenced by the company’s low turnover rate. When comparing SAS Institute with Nortel Networks, IBM, Cisco, and Intel the SAS benefits are superior. The SAS Institute has received many awards in several areas, and has been named as one of the top companies to work for in the US (Branch, 1999).
The unemployment rate in the United States has reached the lowest level in nearly 11 years, roughly 5 percent since 1997 (Solomon, 1997). The proportion of people with jobs is at an all-time high, and the economy continues to grow. Economic growth continues to rise as inflation is remaining steady, and consumer confidence is high (Solomon, 1997). The “Employment Outlook Survey” of 16,000 companies conducted by Manpower Inc. predicts that 30 percent will seek additional employees in the near future (Solomon, 1997). Because of this upward trend in the economy, for many businesses the biggest obstacle is in labor shortages. Now faced with continual changes in technology and development of new products, the demand for skilled employees in the computer industry is even more taxing. Workers possessing these shortage skills are so critically needed that they are able to “write their own ticket.” A programmer may be hired by company A, only to be seduced over to company B by a list