Even in Hard Times, SAS Keeps Its Culture Intact

For many companies, it’s farewell, free soda. Good-bye, beer and pizza. So long,special training. The economic slump is moving many companies to reduce — orentirely eliminate — nontraditional perks established in recent years to attractand retain workers, according to research firm Challenger, Gray and Christmas.But at the SAS Institute, the world’s largest privately held software company,the M&M’s are still flowing freely.

    Renowned for its employee benefits and winner of several “best place towork” honors over its 25-year history — including a Workforce OptimasAward for general excellence in 2000 — SAS is making headlines as one of thefew high-tech companies that aren’t laying people off.

    Unlike Hewlett-Packard, Cisco, and other big high-tech firms, SAS hasn’t handedout a single pink slip. “Like many companies, we have slowed down hiringrecently, but our approach has been a little bit different,” says SAS spokesmanJohn Dornan. “(CEO) Jim Goodnight has always tried to limit head-countgrowth to about 12 percent a year. That’s why the company — while it may nothave had the skyrocketing growth of some tech companies — has always averageddouble-digit revenue growth annually.”

    Nor has the company cut any of its celebrated employee perks. Its Cary, NorthCarolina, headquarters boasts four subsidized child-care centers, an on-sitehealth-care facility with a staff of 38, and a 55,000-square-foot fitness centerwith an indoor pool. Employees at other locations enjoy subsidized child-carebenefits at centers of their choosing, and the company picks up the tab fortheir fitness club memberships.

    Then there are the free refreshments. SAS is widely known for its “breakstations,” which are stocked with breakfast pastries, fruits, six varietiesof snack crackers, and soda, juice, coffee, and tea. Every floor also has freeM&M’s served in bowls that are replenished on Wednesdays. The company goesthrough an estimated 22 tons of M&M’s annually. The Cary headquarters alsooffers employee conveniences like on-site car detailing, massage, dry-cleaningpickup and delivery, and a hair salon.

    Even the simplest perk is part of a highly developed business strategy designedto attract and retain employees, and to reduce the cost of turnover. How canSAS afford all this largesse?

    “Knowledge-based companies need knowledge workers,” says CEO Goodnight.”Looking at … services that keep employees motivated, loyal, and doingtheir best work as merely an expense and not an investment is, I think, a littleshortsighted.”

    Stanford University researcher Jeffrey Pfeffer has studied SAS extensively.He estimates that the company saves over $70 million per year as a result ofits low turnover.

    “You can pay that money to employees in the form of benefits, or you canpay headhunters and corporate trainers to fund the revolving door of peoplecoming in and out,” Goodnight says. “To me, it’s a no-brainer.”

    At SAS, each benefit is studied and reviewed before it is implemented, to makesure it fits with the company’s culture and is cost-effective, Dornan says.

    The plan seems to be working. Sales at the 8,000-employee organization areup 10 percent this year. Goodnight expects they’ll reach $1.2 billion in 2001.That pays for a lot of M&M’s.

    “I think our history has shown that taking care of employees has made thedifference in how employees take care of our customers,” Goodnight says.”With that as our vision, the rest takes care of itself.”

Workforce, October 2001, p. 21 — Subscribe Now!