What happens when an employee is worried about a sick child, has problems with finances, is constantly fighting with a spouse or has health issues? The employee’s productivity goes down.

When productivity goes down, your costs go up. So, the real question ends up being “Where do you want to invest money to make more money?”
One choice would be to replace that troubled employee. Not much of a choice though because everyone comes with his or her own set of personal issues. You can’t tell (and certainly can’t ask) what the problems are for each employee or job candidate, so you won’t know if the replacement has fewer issues than your employee.

Another choice would be to put pressure on your employee to bring up productivity. This isn’t a totally bad idea but you need to recognize the difference between a temporary personal issue and a lack of effort. If your employee has been on the job for a long time, you have a good idea of his or her normal output. That’s a great place to begin the discussions. Of course, now the employee’s drop in productivity has affected your productivity because you need to deal with the issue.

You, personally, cannot do all that much to help an employee with problems outside of the work environment. And, frankly, you shouldn’t even be trying because it can be detrimental to learn too much about an employee’s personal issues. This knowledge can come back later on to bite you. In addition, you aren’t trained to provide professional help of this sort and may offer advice that turns out badly for the employee. Again, this is something that can come back and bite you.

The business world has known for a long time that personal issues do affect an employee’s productivity. The answer for most businesses is found in their benefit package.

Good health insurance takes away the worry about whether or not to take a sick child to the doctor. Employee assistance programs (EAPs) can provide easy access to legal, financial, family counseling, and other professional services to help alleviate an employee’s troubles. Providing a 401(k) plan helps employees save toward their retirement. We can’t tell employees what to do once they leave work, but we can provide benefits that allow them to help themselves more easily.

I just read a newspaper article which mentioned that today, more than ever before, employees are leaving jobs and companies they love to go to companies with better benefit packages. This wasn’t a surprise to me. Many years ago when I was hiring a national sales force for a small company I was made aware of the difference a benefit package could make. A sales candidate asked me if we were going to pay him the $3,000 difference it would cost him for family insurance coverage.

Your employees and candidates are doing the same math and are recognizing the net worth of a total compensation package. If your employee has a family, it can cost them hundreds of dollars every month to have basic health insurance, even with a group insurance policy. Some employees will waive insurance simply because they can’t afford their share of the cost.

We are in a crunch these days because companies find it equally difficult to spend thousands or even hundreds of thousands on health insurance and other benefits. Small companies have it harder because you don’t have the number of employees needed to get discounts from carriers.

Regardless of which benefits you offer, make sure you do a good selling job on the value the employee receives. I like to make up a sheet that shows the total premium cost of any benefit, followed by the amount the company pays and then the “small” amount the employee contributes. Put it into perspective for them. They may think $200 is a lot of money but when they see the total cost was $1,000 it makes them more appreciative.

Although a good benefit package can be expensive, today it can also make you an “employer of choice.” This means that candidates seek you out. The company with the best benefits can win. Not only will you get the best employees but they will stay more productive because your benefit package fulfills their needs.