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Companies find benefits in benefits

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TESS VIGELAND: We watched this week as the list of layoffs in our own industry grew: 150 of our colleagues at the Los Angeles Times got pink slips, or a version thereof. The Atlanta Journal-Constitution cut nearly 200 jobs. There's not a whole lot of good news coming out of corporate America these days. But a new survey out this week does show one bright spot. Danielle Karson reports.


DANIELLE KARSON: These may be tough economic times, but the Society for Human Resource Management found most companies aren't hitting the panic button and scaling back benefits programs. In fact, many are helping their employees manage one of today's biggest economic burdens -- filling up the gas tank.

Steve Willliams: Many organizations are becoming more sensitive to how this is impacting employees. There are some organizations that have started to implement telecommuting, or flexible schedule options such as four-day work weeks, for example, specifically as a result of the rising gas prices.

Steve Williams is the association's research director. Sure, some benefits like stock options or paid paternity leave have taken a hit this year. But Williams says a growing number of businesses realize that making wholesale cutbacks to benefits, especially during an economic downturn, can carry a high price -- losing talented workers. So companies are rolling out what are called "soft" benefits like company-provided cell phones, or fitness center memberships. Kevin Andrews is CEO of the consulting firm SmartBen.

Kevin Andrews: What they consider to be a benefit may not necessarily cost you as much as you think. They're not lowering your deductible for your health plan, but they may be impacting more people and help them have a lifestyle change.

The survey found companies are adding all kinds of new perks. About 29 percent offered free financial advice to employees in 2000. That number jumped to nearly 40 percent this year. Andrews says more companies are also taking a new tack -- pitching existing benefits.

Andrews: In a time like today, they can't give the big raises or add nice fluffy new benefits, they need to make sure employees understand and appreciate what they already have.

And association researcher Steve Williams says more companies are taking a proactive approach to managing spiraling health care costs.

Williams: Some of them are ramping up wellness programs, because they know that, in the long run, if you have a good wellness program in place, it will help to alleviate costs and the impact it has on the overall cost of health care.

In 2003, about 60 percent of businesses offered wellness programs. This year, it's more than 70 percent -- including Marriott Corporation. The Fortune 500 company used to follow the old HR handbook. Jill Berger oversees the company's health benefits programs.

Jill Berger: We used to charge a co-pay for preventive care. In fact, years ago, we didn't even cover preventive care. Now we see the importance of not only covering it, but making it free, because that will keep them out of the hospital.

The bottom line: companies save money in the long run by integrating wellness programs into their benefits plans. Just ask Doug Layman, executive VP of Gilsbar, which manages health care plans for 250 employers. He says it took several years to get their own numbers headed in the right direction.

Doug Layman: Our health plan costs are 6 percent lower than they were five years ago. Our prescription drug costs, which everybody complains about, is 45 percent lower than they were five years ago. And 85 percent say their benefits package is better today than it was five years ago. Yet we're paying less, and we have happier, more productive people.

As the definition of family changes, businesses are being guided by a new playbook to keep their employees happy and productive. The benefits survey found that more than a third now offer health care coverage to same-sex partners. And more than 60 percent pay for long distance calls when a worker is on the road and wants to phone home.

In Washington, I'm Danielle Karson for Marketplace Money.

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