1995 Quality of Life Optimas Award ProfileBRCalvert Group

Do you want to offer your employees better benefits, but don’t think you can afford it? Think again. Today, you really can’t afford not to take special care of your workers. If they don’t get the preventative health care they need, your company pays big when they get ill. If they don’t get time off for personal or family problems, their productivity suffers. And if they don’t gain satisfaction from their jobs, they leave—costing your company in turnover, recruitment and training.

This is a lesson the Calvert Group learned well. Not long ago, turnover at this Bethesda, Maryland-based mutual funds company was at 30%. Although this wasn’t exceedingly high for the industry, it didn’t sit well with Calvert executives. The turnover rate indicated that employees weren’t happy with the quality of their life at Calvert. And this was a company respected for its dedication to quality of life. Indeed, Calvert pioneered the concept of socially responsible investing as a way to ensure a better quality of life for all. The Calvert Social Investment Fund, for example, seeks to invest in companies that have good environmental practices, make safe products and treat their employees well. Conversely, it avoids investments in companies that pollute, make unsafe products or have poor labor relations.

“Our overall mission is to be a primary provider of asset management while at the same time improving the quality of life in society,” says Clifton “Stan” Sorrell, president and CEO of Calvert. “And for us, society means our employees, our shareholders and the community. Both our products and our people must be in sync.”

To bring these elements into alignment, the HR staff at Calvert began to look at its employees holistically and refocus the company’s benefits and HR policies accordingly. “There are a variety of different needs we all have as human beings,” says Evelyne Steward, vice president of human resources. “We all have survival needs, psychological needs, emotional needs and spiritual needs.”

Calvert thus structured its benefits and HR programs around these human needs. The company now addresses survival needs with compensation programs and health and wellness programs that cater to individual needs. It attempts to satisfy emotional needs by creating an environment of trust in which people are treated with respect and dignity. It provides growth and development initiatives to help employees fulfill psychological needs. And it provides opportunity to do meaningful work both within the office and in the community as a way for workers to achieve some spiritual satisfaction (see “Calvert Group Fulfills Workers’ Basic Needs,”).

Says Training Manager Bill Williams: “Although Calvert isn’t publicly traded, we strive to be the kind of organization that, if we were publicly traded, we would pass our socially responsible screens.”

The holistic approach has paid off for Calvert. Yes, its benefits package is immense, with some benefits carrying a hefty price tag. But the company also offers many benefits that cost it little or nothing, such as flextime and a dress-as-you-like policy. In return, Calvert gets increased loyalty, high production rates and low turnover—currently at approximately 5%—all of which translate into increased profitability. “If people have their needs taken care of, they can be more relaxed, and they can get more enjoyment out of their work,” Sorrell says. “And, more motivated people are going to be more productive people. More productive people are going to make the company a better organization and a more profitable organization.”

Still think you can’t afford to up the ante for your workers? Read on and see how Calvert does it. By the way, Calvert only employs approximately 150 employees, its human resources staff only numbers four and, as a privately owned small company, its revenues are a far cry from those of Fortune 500 firms.

Here’s what Calvert has to offer.
Calvert’s benefits plan isn’t static. It’s altered frequently to keep pace with the changing needs of its work force. Constant communications and occasional formal focus groups keep HR abreast of employee needs. Through these dialogues, Calvert has learned a key point: When it comes to benefits, one size doesn’t fit all. Although all workers have needs that fit into the four basic categories, these needs can vary dramatically. To an older worker nearing retirement, health care and retirement savings are the biggest concerns. For a young parent, child care and time off for emergencies top the list. And for a young, single worker, getting a college degree may be the most important need to fulfill.

That’s why Calvert offers flex-benefits under a package it calls Personal Choices. Benefits are grouped into one of three categories in the package: core benefits, optional benefits, and other benefits and services. The core benefits are such things as life insurance, sick leave, disability, holiday pay and a retirement savings plan. These are company-paid benefits that employees receive automatically upon date of hire.

Optional benefits include medical, dental and vision coverage, spending accounts for health and dependent care, additional life and disability coverages, and additional savings plans. Optional benefits have a cost for employees, but can be paid for with pre-tax payroll deductions and with ChoiceBucks—money Calvert gives employees each year for their benefits based on their age, years of employment and annual salary. The key for keeping costs down, says Steward, is letting employees choose what they need rather than spending money on things they don’t need.

Although the optional benefits, as the name implies, give employees flexibility as to how much medical or life insurance coverage they want and what type of policies suit their needs best (for example, there are five different health-care plans employees can choose from), it’s the benefits and services in the “other” category that give employees the greatest choices for tailor-making their plans.

Lumped under this category are such things as career planning, an EAP, transportation/parking benefits, tuition reimbursement, free weekly massages and a multitude of family-friendly services. Most of these are company paid. A look at the transportation/parking benefits will show how it isn’t a one-for-all proposition. For example, the company pays for employees’ parking. But because it encourages workers to use public transportation, it also covers the costs of bus and subway fares, even if these total more than the parking fees. And in addition, Calvert will reimburse employees who walk to work up to $120 per employment year for walking shoes, and will buy employees who bike to work a new bicycle with a maximum cost of $350, each year. “Even if someone asks for a new bicycle every year, it’s cheaper for us than $80 a month for parking,” says Steward.

Educational assistance and a physical-fitness reimbursement policy further illustrate the flexibility given to employees. Calvert will pay as much as $3,000 a year for classes employees take, be they for learning how to basket weave or for earning an advanced degree. “We want people to be committed to learning,” Steward says.

The same goes for physical fitness. Calvert reimburses workers up to $35 a month for health-club memberships, tennis courses or whatever. “One guy was a member of a rugby team, and would come in black and blue every Monday during rugby season,” says Judy Shober, an HR administrator. “I used to think, ‘this is a benefit? We’re helping this person get bruised.'” But, in accordance with the philosophy of matching benefits to lifestyle, the company doesn’t limit workers’ choices of sport, other than to stipulate that the activities must be organized.

Calvert’s mix of family-friendly policies is another example of its commitment to meeting its employees’ varying needs. It pays for up to 80% of the cost of adoption, up to $2,000 per adoption, or reimburses for out-of-pocket expenses beyond deductibles associated with alternative birthing arrangements, such as hiring a midwife. It offers a domestic partner health-care subsidy for homosexual employees who can’t receive the coverage in the regular health plans. And it offers flextime, job sharing and telecommuting for employees who have special needs.

It’s these types of benefits that have fostered Carmen Ieid’s loyalty to Calvert. Pregnant with twins four years ago, the sales and marketing administrator was instructed by her doctor not to commute for the month prior to her due date. So Calvert installed all the equipment she needed in her home so she could continue working for as long as she felt able to. After the birth, she needed more time off than she had anticipated to care for one of the newborn’s health problems. In total, she received eight paid weeks off (this included paternity leave since her husband doesn’t work at the company).

After returning to work, Ieid took advantage of the flextime benefit for quite a while, working four days a week and using Fridays to take the twins to doctor’s appointments and so forth. “That all meant so much to me,” says Ieid.

For Shober in HR, who has a disabled daughter, a flexible schedule is what enabled her to start her career with Calvert. And that was 13 years ago, long before flextime was part of the benefits vocabulary. “I’m living proof [of the effect on the company] the benefits here have,” Shober says. “Calvert worked around my schedule, and I’m still here all this time later.” Shober, with Steward, has been a key player in designing the benefits program.

Calvert cultivates careers and healthy communities.
Having loyal employees such as Ieid and Shober certainly has its advantages. But it also creates problems in a small company—especially one that strives to fulfill workers’ psychological needs by offering employees challenging careers. “Some people get to a point at which they feel there’s no-where else for them to go,” Steward says.

Indeed, survey information Calvert gathered a few years back indicated that other than leaving because of personal reasons, such as relocating or going back to school, the single biggest reason why people left was because they felt they’d reached their maximum potential at Calvert, and sought more opportunity.

Calvert has a strong promote-from-within policy and posts all open positions internally before recruiting from the outside. And to prepare people for filling these positions, Calvert offers support. It encourages workers to create their own personal development plans, and some managers actually require their employees to set career goals that they review with the employee periodically. Workers who seek it can receive career counseling from human resources. “We do a lot of one-on-one, helping employees focus on where they want to go and what they need to do to get there,” Shober says.

And workers have many resources available to them. Williams maintains a training center that’s stocked with books and videotapes on subjects ranging from successful investment strategies to how to write an effective, attention-getting resume. Workers can check these items out on their honor. The center also provides computers for computer-based training courses on such programs as Microsoft Word or Lotus 1-2-3.

Other resources available include assessment tools and informational interviews. Occasionally, the company also brings in career counselors who conduct training seminars on how to determine an employee’s best career route.

Despite all of this, Shober says it’s inevitable in a small company for people to outgrow it. “As people grow, their needs change,” she says. “We hope there’s something at Calvert they can grow into. But if they grow out of Calvert, that’s OK too, because we feel we’ve given them a good, strong background to take with them.”

A little bit of turnover is good anyway—it enables companies to bring in new blood. For Calvert, these new hires have to be more than warm bodies. Not only must they meet job requirements, they need to be people who “really want to make a difference and who can be committed to our quality of life mission and our social responsibility,” Shober says.

When screening applicants, Shober listens carefully to candidates’ responses and questions to determine whether they’re good fits. And although having done community service isn’t a prerequisite for working at Calvert, people who have been involved with their community tend to fit best with the Calvert culture.

After all, community involvement is a big part of Calvert’s culture. The company gives all employees a total of 12 days off a year for community service. This could be anything from helping out at a child’s school, to serving lunches at a homeless shelter. Williams, for example, tutors once a week at an English as a Second Language class at a local high school. Workers don’t need to get their projects approved, nor do they need to provide proof of what they do.

In addition, the company sponsors numerous community involvement activities throughout the year employees can volunteer for, many of which don’t even count against their 12 days. This year, for example, the company signed on with Food and Friends, a program that has workers delivering food to homebound HIV and AIDS patients every Friday.

Company-sponsored activities run the gamut. Calvert workers have put on dances for senior citizens, done home repairs for downtrodden people and planted trees in community areas. They’ve participated in the homeless walk, the AIDS walk and the Cystic Fibrosis sports challenge. They’ve given blood and given food.

Calvert even enlists employees’ families in its community projects. Several years ago it created a Kid’s Day in lieu of Take Your Daughters to Work day (it actually has two Kid’s Days a year now). While the mornings of Kid’s Days are spent at the office learning about what Mom and Dad do, Calvert takes the kids out in the afternoon, along with children from the local Head Start program, to do community work. One time the children made crafts and then gave them to senior citizens. Another time they picked fruits and vegetables from an orchard and donated them to a food kitchen. “The kids love it,” Steward says. “It’s fun, but it’s also good for the kids to be able to see what’s happening and get a feel for the community.”

Kids are actually a big part of Calvert’s community outreach. The company brings students in from a local school once a year for a Career Awareness day. The students spend the morning taking a tour and talking with Calvert people about the mutual funds business. “Stan [Sorrell] has spent many lunchtimes being quizzed by the students,” Shober says. (“How much money do you make?” is usually the kids’ first question.) After lunch, the students partner with a mentor who works in whatever part of the company they’re most interested in, be it the computer area, the advertising business or HR.

Calvert also sponsors numerous internship programs as part of its outreach activities. It works with a program called Training Inc., which puts displaced people trying to get back into the workplace through a 26-week program before placing them in internships. It also partners with a children’s hospital’s Employment Adolescent Readiness Center. One participant from this program has been with Calvert for three years as a temporary employee. A gunshot victim who must use a wheelchair, the young man came to Calvert just out of high school with little vision for his future. He took an interest in computers, got some training in the computer operations area of Calvert, and now has decided to go into the computer science field.

Calvert’s investment in its people yields high returns.
With these types of programs, Calvert has become an employer of choice. Shober says she has noticed a difference in the resumes she has received the last few years. “The resumes I used to get basically were, ‘I want a job,'” she says. “Now, they say, ‘I want to work for Calvert.'” And, judging by the low turnover rate, employees who already work for Calvert don’t want to leave.

Obviously, the company didn’t get here overnight. Creating a culture of caring takes time in assessments, program design and implementation. It also takes money. But with careful planning and with attention to employees’ needs, a company can get the maximum bang for its buck. For example, although Calvert doesn’t have any quantitative comparisons between costs of benefits and savings incurred, the company claims attention to workers’ survival and emotional needs has kept sick days down, health-care expenses low and stress levels to a minimum. And career and personal development strategies designed to address psychological and spiritual needs have strengthened morale and lowered turnover rates, reducing recruitment and training costs.

A recent survey from New York City-based Towers Perrin indicates initiatives designed to help employees balance their work and personal lives indeed provide a solid return on what are, in most cases, relatively modest investments. According to the survey, companies with a high commitment to work-life initiatives believe they’re better positioned to compete effectively in today’s market environment.

In addition, the survey reveals more and more companies are paying attention to programs designed to help keep employees mentally and physically “fit,” such as tuition reimbursement for nonbusiness-related courses and subsidized fitness centers. “Employers recognize that easing work-personal life conflicts offers significant gains for both them and employees,” says Pat Milligan, a Towers Perrin principal and HR strategy consultant. “The level of appreciation of these programs among employees is very high, as are the potential benefits for the employer.”

Says Sorrell: “Yes, we have a bottom line. But there’s another line that deals with attitude, commitment and loyalty.” It’s that line that too often gets ignored. But as Calvert has proven, there’s a definite link between it and the bottom dollar.

It also has shown that there’s a link between a company’s culture and the products it sells. As Williams says, Calvert strives to be a company that would pass its own stringent screens for its socially responsible investments. As such, it gains credibility. Comments Bob Dunn, president and CEO of Business for Social Responsibility—a three-year old Washington D.C.-based organization of companies established by Ben Cohan of Ben & Jerry’s Homemade Inc. and others—”It’s certainly gratifying that a company formed to assess the policies of other businesses is being recognized for its own practices.”

Still think you can afford to neglect workers’ cries for more? The cost of improving quality of life may in fact be much less than the cost of not.