In these times of downsizing and layoffs, it’s easy for companies to lose sight of what it takes to continue to attract and retain the best talent. This means paying attention to the culture for company survivors. A study out of the University of Michigan reminds us of the importance of creating a positive, supportive culture, even in a recession. Two Business School professors, Cindy Schipani and Norman Bishara, found a strong direct correlation between “complementary alternative benefits” and employee turnover and productivity. The researchers examined companies on Fortune magazine’s list of “100 Best Companies to Work For” that also provided complementary alternative benefits. Schipani and Bishara determined that these companies had much less turnover than the industry average, saving about $275 million per company.

They extrapolate from there by saying that it is likely that complementary alternative benefits have an effect on other positive aspects of business and even civic life. Schipani is quoted as saying:

Such benefits may be used to build camaraderie and understanding among employees, help promote employee loyalty to the firm by providing enviable treatment of employees, and serve as an example for society and perhaps even as a model for future government action…In all, companies can play a direct role by taking care of their work force through employment practices designed to reduce stress and promote camaraderie in the workplace.

I would not want to infer a causal link between benefits and lower turnover from this data. Lower turnover and increased productivity might be due to the kind of people who were hired, the overall compensation program, leadership, or any of a myriad of other factors. However, the relationship of alternative benefits to productivity is worth careful consideration. It is logical (as Mr. Spock would say) that a work environment enhanced by such benefits as flexible work hours, subsidized health care classes, an onsite fitness centers, and laundry and dry-cleaning services, would reduce stress, create a positive atmosphere, and, therefore, increase employee engagement.

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