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The Benefits of Benefits

benefit of benefits

How offering benefits can help you attract—and retain—A+ studio employees

Neisha Hernandez, owner of Neisha’s Dance & Music Academy in Chula Vista, California, recently had a staff member move an hour and a half away. “Her partner said, ‘There are dance studios everywhere. Just move studios!’” says Neisha. But the employee refused, citing Neisha’s generous pay—and benefits such as a three percent retirement savings account match—to be well worth the three-hour round trip commute.

Neisha’s anecdote is all the more impactful considering that the job market currently favors seekers, and changing lifestyles and priorities throughout the pandemic has made leaving jobs and switching careers more common. This, says Neisha, is why it’s more important than ever “to do everything we can to make our place of employment the place where they want to come, and the place where they want to stay.”

Benefits have by far been the biggest difference-maker she’s found in terms of keeping staff long-term, which makes sense: Shanna Kirkpatrick, owner of Chara Christian Dance Academy in Friendswood, Texas, points out that most employees leave dance studio jobs because of big life changes. Benefits—whether that’s health insurance to deal with a medical issue or paid time off or parental leave to care for aging or newborn family members—can help “match the job to their desired lifestyle” as those changes occur, says Shanna.

For Neisha, investing in staff is just good business—she finds that employee turnover is far more expensive than paying for the benefits she offers. But it’s also about “making sure everyone is valued not just for their talent, but valued as a person who is worthy of making a house payment, and having medical insurance,” she says. “That feeling of legitimacy is really rewarding—not just for yourself, but for the team that works for you, and for the industry at large.”

Benefit Breakdown

Here’s how three savvy studios implemented six types of benefits for their employees.

Paid time off
No matter how dedicated they are to your studio, your staff needs a break every once in a while, whether to rest up when they’re sick, enjoy time with family, or attend to personal matters. But Neisha says she finds that dance teachers in particular are reluctant to take off work, especially when they are losing money by doing so.

That’s why she offers all full-time staff members (who work 30 hours per week as defined by California law) four weeks of paid vacation time annually (the studio is closed for those four weeks, but staff can swap out days for others when the studio is open). Shanna, too, offers full-timers five to 15 days of PTO depending on their length of service. And at Tonawanda Dance Arts in Tonawanda, New York, both full-time and part-time leadership team members—who do a combination of teaching and administrative work—receive PTO based on years of service.

Make sure you are familiar with your state’s PTO laws, as some require employers to provide paid sick time and/or family leave time. Neisha was concerned at first about having to pay both the sick teacher and a substitute when a California paid sick leave law went into effect several years ago, but she says it hasn’t hurt her bottom line, and has had a positive cultural impact by encouraging staff to stay home when they are ill.

Your state may have no such laws. But as Kelsey Griffin, Tonawanda Dance Arts associate director and a former HR professional, puts it, “just because you aren’t required to do something doesn’t mean you shouldn’t.” Shanna, for instance, provides six weeks of paid maternity leave, which she says is rare for small businesses in Texas.

Retirement
Providing a retirement savings option for employees is an investment in both your business’ future and your staff’s. Neisha says that though she provided a retirement plan for many years, the opt-in was low. Since it’s not legally advisable for employers to give employees financial advice, she instead signed up all her staff for a personal finance convention, and they emerged excited to take advantage of Neisha’s three percent 401k match. Though the match is a big expense, “I felt like it was going to hurt so much more if we lost any of our leadership team,” she says. “The proof is in the pudding: We’re doing better than ever.”

You have options around whether or not to provide a match (though doing so is a meaningful incentive), how large that match is, and who qualifies for your plan: Shanna’s Individual Retirement Accounts (IRAs), for which she offers a three percent match, require employees to have been at her studio for three years to qualify; Kelsey’s require employees to earn a specific minimum amount of income from the studio.

Be sure to check your state’s tax and employment law when implementing a retirement plan. Some states, like California, may even require that you provide certain employees with a 401k.

Continuing education
Educational opportunities for your staff are as much a benefit to them as they are to your studio, says Neisha. All of her teaching staff attends trainings and conferences with organizations like More Than Just Great Dancing!® and Youth Protection Advocates in Dance®, as well as department-specific learning (for instance, ballet teachers participate in annual Vaganova training, and teachers working with the youngest students attend Leap ‘N Learn training).

Beyond those mandatory events, Neisha will also pay for staff to attend any other conferences, workshops, or classes that will enhance their contributions to the studio. “People ask me all the time how I can pay for all that, and my big thing that I say back is, ‘How can you not?’” she says. “Every cent that I pour into my team comes right back to the company tenfold.”

Shanna, who has a similar approach, says to consult with an employment lawyer about whether you’re able to ask staff to remain employed with your company for a designated amount of time after you’ve paid for a continuing education opportunity, as in some states it is illegal.

Complimentary classes
Both Shanna and Neisha offer staff complimentary tuition credits for their children and family members. Discuss this with your accounting professional, says Shanna, as staff will likely need to pay taxes on these credits as a “taxable fringe benefit” (she suggests making sure employees are aware of this possibility, and are not unknowingly taking advantage of more credits than they’d like to pay taxes on). Of her employees’ unlimited tuition credits, Neisha says, “I feel like the more immersed they are in what we do, the better.”

Bonus compensation
Bonuses can be a simple starting place for studios looking to begin offering benefits, says Kelsey, since they can be flexible based on how much revenue is coming in and don’t require an outside vendor like health insurance and retirement plans do.

Tonawanda Dance Arts pays bonuses throughout the year based on the studio’s performance (measured by whether annual goals are met). Kelsey says they also offer bonuses for both teachers and front desk staff who help convert students from a trial class. Connecting a bonus to studio enrollment or revenue goals demonstrates to employees the importance of their contributions. Everyone on the team serves and sells, and when the studio succeeds financially, they do too.

Health insurance
As very small businesses, it can often be difficult for studios to justify offering a health insurance plan. Both Shanna and Kelsey say that they don’t currently have enough staff members who would opt into a plan, as most are either on a spouse’s plan or are under 26 and still on a parent’s plan. Neisha says this was once the case at her studio—she offered a plan, but everyone opted out because they could get a better deal elsewhere. Now, however, she is investing in a more competitive plan, and intends to pay for all or most of the employee premiums.

If offering a full health insurance plan doesn’t make sense for your studio, consider asking your employment attorney and/or tax professional if a biweekly or monthly “health stipend” would be an acceptable solution. Often reported as a separate line of taxable income on an employee’s paycheck, a stipend helps with health-related costs and offers flexibility to the employee on how to spend the funds.

Shanna offers a health stipend that can be used for expenses like gym memberships, massages, and therapy (she has employees submit receipts and then reimburses them). The monthly amount depends on years of service with the studio, and maxes out at $150.

How to Get Started

For smaller studios, or studios in their early years, offering comprehensive benefits can feel out-of-reach, or simply out-of-budget. But Kelsey stresses that you don’t have to do everything all at once—the benefits you offer can grow alongside your business.

Neisha recommends starting off with one benefit, polling your staff—whether formally or informally—about what would be most valuable to them. And even if you can’t yet offer traditional benefits, you can still provide staff with the “soft benefit” of a welcoming and supportive culture, says Kelsey: she suggests building in staff appreciation and recognition, such as team outings and birthday gifts.

Whatever you do, plan your tuition and pricing with your employee’s total compensation in mind, not just their paychecks. “Eventually, you’re not going to be able to afford not to do this,” says Shanna. “So you’ve got to start somewhere. You’ve got to look at what it really costs to run your business, and run it right.”

The Total Package

If you’re investing in benefits for your staff, make sure they know that those add-ons are part of their total compensation package, says Kelsey. She says that sometimes there’s a misconception that “benefits” only means health insurance, so it helps to fully explain each benefit and its monetary value when hiring a new employee. Review veteran employees’ full compensation during annual performance reviews, too, she says, and remind them that it’s not just the paycheck they take home

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