Bottom Line: Impact of Benefits Hard to Quantify

When bringing on new hires at landscaping firm Stay Green Inc., President Richard Angelo has heard stories about how other companies couldn’t provide equipment as simple as a shovel without filling out multiple forms. That’s not how things are done at his Santa Clarita company. Stay Green has an unwritten policy of doing everything to make it easy for the field crews to get their work done. “We don’t make it harder where you have to fight to get everything needed to do the job,” said Angelo, who runs Stay Green with his wife and son. Providing the best equipment and vehicles to use, and uniforms to give a professional appearance keeps up the morale at Stay Green. A workforce with good morale takes pride in their work and feels more productive. Angelo knows this by what he sees on a daily basis but quantifying it in hard numbers is another story altogether. Angelo has never tried to track the results of policies and benefits that make Stay Green a good place to work but said it sounded like a good idea. Dan Stillwell, a principal at Burbank graphics house LAgraphico doesn’t think it is possible to put a finger on what the company does for its employees that translates into an improvement on the bottom line. Like Angelo, Stillwell sees it in the attitude of the workers who are not shy to point out how to improve efficiency and care about making the team better. “It is intuitive that you know that’s the case,” Stillwell said. Regional Managing Partner Scott M. Sachs of accounting firm Good Swartz Brown & Berns agreed that a positive work environment and a sense of productivity and efficiency is present when employees enjoy where they work. It all comes from the internal investment that eventually can be tracked to higher revenues and decreased expenses, Sachs said. Although no concrete figures were given, the one area that companies know gets affected by good workplace policies and rules is the costs of recruitment and training of new employees and the retention of current employees. Intuitive human resources managers know that happy employees are the best recruiters and advocates for a company, said Khalilah El-Amir, director of human resources at Fulcrum Microsystems, an interconnect manufacturer in Calabasas. In fact, a majority of the new hires at Fulcrum have come through employee referrals, El-Amir said. Good Swartz also finds new hires through its employees. Recent college graduates will be introduced to firm members at recruiting events by former classmates. Current employees will recommend friends and acquaintances they know are unhappy in their current jobs. “We’ve hired several people that way,” Sachs said. Retention of employees also becomes easier when they enjoy their workplace. It just doesn’t have to be through offering standard benefits like health insurance and paid vacations and holidays. Flex time, free lunches, exercise programs and sponsored sports teams all contribute to a positive culture. El-Amir joined Fulcrum within its first months of its founding in 2000. “In an age where people are at companies for two years and jump ship consistently, the fact that I and a number of us have been here for eight years says something about our team,” El-Amir said. Both Angelo of Stay Green and Stillwell of LAgraphico described their companies as being like families because of low turnover. It is nice to have people who like to come to work and know they have friends there, Stillwell said. “There is always someone who can call and offer your people more money,” Stillwell said. “We don’t get into those situations where people are leaving us.” Housing Market Struggling The median home price in the San Fernando Valley dropped by 35 percent in August when compared with the previous year, according to a report from California State University at Northridge. The median price was $420,000, a drop of $33,000 when compared with July. In August 2007, the median price was $650,000. The school’s San Fernando Valley Economic Research Center also found that August home sales of 1,188 had dipped by 5 percent from July but that sales were still higher than at any other time of the year. The center forecast that a combination of the uncertainty in the credit and mortgage market and the slow job market in the state contributes to a drag on near-term home sales. Notices of default were up in July and August but were still lower than the 1,560 recorded in April. A year ago August, there were 833 notices of default (NOD). NOD’s take about 100 days to turn into foreclosure if the delinquency is not resolved or the home loan renegotiated. The high level of default notices will continue the record pace of foreclosures in the Valley because homeowners fall behind on payments or cannot renegotiate their loan because of the tight credit market. In August, 923 foreclosures were recorded in the Valley, a more than 200 percent increase from the 289 foreclosures in August 2007, in line with the rest of L.A. County. – Mark Madler