When Cash Isn’t Necessarily King

By Adam Lashinsky, Senior Writer
Fortune Magazine

I recently wrote a long feature story about why Google had become the new leader of Fortune Magazine’s annual list of best companies to work for in America. You’d think given Google’s tremendous financial success that money would be the big draw for Googlers young and old. After all, Google’s stock has grown 10-fold since its 2004 IPO, its early employees all became zillionaires, and Google famously hires PhD’s engineers the way the New York Yankees snap up home run hitters: aggressively. Yet the employees at Google haven’t always demanded that they be shown the money. They also don’t typically attribute their on-the-job happiness to the company’s beneficent perks, like on-site car washes, free medical care and massages on demand. No, when I asked why they liked working at Google, over and over the company’s employees told me what they really love about life at Google is the food. That’s right, three free square meals a day served by renowned chefs, plus ample snacks and diverse liquid refreshment, is what helps Googlers endure the long hours, cramped working conditions, intense competition and nasty commutes.

The lesson here isn’t that all it takes to delight your workers is free grub. After all, most companies can’t afford the extravagances that Google’s ample bottom line enables it to heap on their employees. What’s more, the bluest of the blue-chip leaders like Goldman Sachs in banking or Cravath Swaine in the law or General Electric in manufacturing will always pay top dollar for talent – and will struggle to keep their high-flyers happy. No, what the culinary tastes of one of the world’s fastest-growing companies shows is that cash isn’t always king for employees these days.

Let’s face it, times are tough and quite possibly getting tougher. After a long bull run for the stock market and a sizzling string of growth for the economy, when stock options and rising salaries often were enough to keep employees loyal, the job of hiring, delighting and retaining talent is getting harder. A global credit crunch, rising gasoline prices, declining home values and the near paralysis of a huge swath of the mortgage market all mean that raises will be tougher to come by this year. About the only sure-fire way to make a boatload of money is to become CEO of a major Wall Street investment bank – and then be shown the door. Seeing as that’s not a career path many are fortunate enough to follow, employers need to convince their workforce – and themselves -- that their company is the place they want to spend their daylight hours, and then some. And that’s going to take way more than cash.

Here, then, are a few ways all companies – and not just rocket-ship-growth Internet companies whose names have become verbs -- can make themselves more attractive to existing and prospective employees without necessarily breaking the bank.:

Little perks count. In tough times, employers send out the paper-clip-counting brigade to figure out where to cut costs. Magazine subscriptions are halted, light bulbs alternately go dark, parking places are revoked. Some of the cost-cutting undoubtedly is warranted. The shareholders demand, and have every right to know, that its agents are not wasting the company’s money. Here’s a radical idea, though: Adding a few metaphorical office supplies might just improve morale, and at relatively little cost.

Long before Google existed, for example, Bloomberg, the private information-services company founded by New York City’s current mayor, stocked its offices with free candy and soda. Yes, part of the reason was so employees wouldn’t have to leave the premises – and cut down on their productivity, to get a snack. Then how do you explain the tropical fish that Bloomberg puts on display in its offices? A meaningless touch? Perhaps. But it also tells employees that management cares enough to make for a decent environment. It may sound corny, but a little bit of beauty in the workplace goes a long way. A few Cherry Cokes don’t hurt either.

Small perks matters, and so do small gestures. The law firm Perkins Coie has a “happiness committee” that looks into how to make its attorneys happy, according to an article in The New York Times. The committee was responsible for delivering candied apples and milk shakes to employees. Again, a little sugar all by itself isn’t going to drive employee morale. But such “random acts of kindness” won’t hurt either.

Encourage a balanced lifestyle. Especially if cash is going to be tight, what employers can offer is a commitment to healthy living, in and outside the workplace. Many companies offer discounts on health-club memberships, but how many managers encourage their direct reports to find time to work out – and lead by example? In other words, walk the walk (or jog or lift or stretch!) as well as talk the talk when it comes to balance.

Earlier this year I interviewed Jim Kilts, the legendary former CEO of Gillette, and author of the business tome “Doing What Matters.” I asked Kilts, who now is a partner in a private-equity firm, if he valued work-life balance in his employees. He said yes, but quickly acknowledged that he was never particularly good at it himself. Here’s a tip: Be good at it yourself if you want your employees to be too. After all, workaholism is bad for your health. As author and consultant Joseph Michelli recently wrote in the Love and Logic Journal: “Workaholics often never appreciate that the price of this behavior includes poor health, spiritual emptiness, decreased creativity, and, completely shocking as it may sound, decreased productivity.” Translation: unbalanced workers not only are bummed out; they’re not particularly productive.

Diversity equals strength. All things being equal, employees will choose an organization where they feel comfortable over one that makes them squirm – even for less money. It makes sense. Sad as it sounds, many of us spend more time each day at work than we do playing with our children. That’s just the way it is. Mortgages, braces and hockey tickets all have to be paid for. Employees will choose, however, to work at a place that looks at least a little like their family. Run a company that keeps certain types out, be that based on race, religion, gender, sexual orientation or politics, and you’re certain to turn away candidates who could have made the whole better than the sum of its parts. “Organizations that embrace diversity are more realistic and honest in their outlook and operations structures,” writes Christopher Metzler, a professor at Cornell University’s School of Industrial and Labor Relations. “They stay ahead of the law instead of merely striving toward legal compliance.”

Follow your employees’ passions. A recent survey by MonsterTRAK.com found that 92% of new entrants into the job market want to work for companies that are friendly toward the environment. Agreeing on a definition of what constitutes eco-friendly may be more difficult than proclaiming it to be true. But it’s a good example of what matters to employees, especially younger ones. How to accomplish this? Make the company truly green. Look into being carbon neutral. Run recycling programs. Give preferential parking slots to car-poolers.

Don’t go green, of course, if the company’s leadership doesn’t believe in it. But absolutely do it if it’s something your employees want. Listen, for example, to Bank of America’s (BofA) explanation in 2006 for a pilot program that offers a $3,000 rebate to employees living within 90 miles of Boston, Charlotte, and Los Angeles for purchasing hybrid automobiles. “Given the size of our commuting associate base, the hybrid program expands our commitment to the environment and helps our associates to participate in making a difference while cutting down on their commuting costs,” [emphasis added] the company said. (Last year BofA expanded the program to 185,000 U.S.-based employees.) For a relatively small sum of money – not nearly everyone will take the company up on its offer – BofA makes itself a friend of the environment, generates good public relations, and, importantly, plugs into a key desire of its employee base.

Sustainability matters. Watch that buzz word. Sustainability. It refers to the notion that the best companies think not only about the environment but also about corporate culture, ethics and other factors that lead to the long-term health of themselves and the communities in which they exist. It sounds high-falutin’, to be sure, but increasingly investors and employees are looking for companies that plan to be around for a while. Take, for example, the investment approach of Generation Investment Management, the London-based investment firm founded by former Vice President Al Gore and a team of investment pros from Goldman Sachs. Their observations about the types of companies they’re looking to invest in could serve equally well as a guide for employers who want to make their companies desirable for employees. “Companies – through the work they do, the products they sell, and the way they treat their staff – have opportunities to address the real needs of their employees, customers and communities and, in so doing, create enduring value,” Generation wrote in a recent research paper. Sustainable companies make for durable workplaces, and sustainability can be a real recruitment tool.

Surveys consistently show, and always will, that what employees want more than anything else is cold hard cash. That’s a given. The question becomes what to give the people who work for you when they’ve either got all the money they need or they are maxed out in salary range due to longevity. Despite my reporting experiences at Google, the way to every employee’s heart isn’t necessarily through her stomach. But it’s not always through her checkbook either.

Green means “GO”!

Encouraging – and rewarding – good environmental behavior may be the ultimate example of a relatively inexpensive yet meaningful employee perk. As employees become increasingly interested in global climate change an employer that says ‘We care about the environment’ more and more is telling its troops: ‘We’re on the same page with you.’

Bank of America isn’t the only company that has scored points with its workers by helping them help the planet. Hyperion Solutions, a software company recently purchased by Oracle, raised its stature with the public as well as its employees by offering even more money than BofA, $5,000, toward the purchase of a hybrid, as part of its Drive Clean to Drive Change initiative. “We receive an enormous amount of good will around the globe for this, far beyond the cost of the program,” the firm’s CEO told the Web site HybridCars.com. He specifically sited the value of the program in recruiting and retaining employees.

The hybrid Web site has oodles of additional examples. Clif Bar, the sports snack company, also has a hybrid bounty. More interestingly, it operates a “Cool Commute” program that gives points to workers who carpool, walk or bike to work, or take public transportation. HybridCars.com also tracked down an environmental research firm in Anchorage, ABR Inc.,that pays its employees $3.50 a day for walking, skiing or biking to work and $1.75 for carpooling. It’s easy to see how such amounts never are going to add up for employers but will happily put a little money in the pockets of green-thinking employees.

Big companies are getting into the act too. Wal-Mart has begun a voluntary “personal sustainability” program that rewards employees for taking care of themselves as well as the environment. According to the New York Times, the giant retailer has been running workshops that educate its workers on how much money they can save personally by carpooling (a bigger boon the higher gas prices rise) and turning off their televisions when no one’s watching. The company even took some of its Denver employees to the zoo for a chat about environmental sustainability. Swiss Re, the giant reinsurer, takes steps to make sure its clients aren’t harming the environment. It also has offered employees incentives that range from hybrid bounties to subsidizing the installation of solar panels in their homes.

Who would have thought saving the planet would be such a good recruitment and retention tool?

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