Due to the 2016 election, around 19 states have experienced a minimum wage raise law that has impacted their businesses. There are many benefits and consequences to this decision, however, business owners everywhere are having to make changes whether they like it or not. Fortunately, increased paid sick leave and minimum wage does not mean the end of the world for your business. There are many ways to achieve increased profit each quarter while offering more employee benefits in your company. We have included information on 5 companies demonstrating that having a gradual increase in benefits over the past 10 years, as well as the very recent law changes for minimum wage and paid sick leave, have NOT negatively affected their growth for the first-quarter earnings of 2017. These 5 financially stable companies prove that you can treat your employees well and grow your business simultaneously:
1. Microsoft Corporations
Founded by Bill Gates, Microsoft is one of the largest tech companies in the United States that’s known for its great products and innovative working environment. Microsoft employee benefits include medical and hospitalization health coverage, vision care, dental care, physician house calls, 24-hour health lines to contact, and maternity and parental leave. Something that really sets their workspace apart from other companies is that they have increased benefits with an onsite gym and fitness center, as wells as on-campus cafes, kitchens, and social clubs. This not only allows the employees to feel like they are protected financially but also like they have different options to explore that are provided at no extra cost due to where they work.
This is the perfect first example that illustrates how a successful company can make their employees happy without losing profit. Only during this year’s first quarter, Microsoft’s net profit rose 28 percent to $4.8 billion and their revenues increased by 8 percent to $22.1 billion. By expanding their products to Office, Cloud, and LinkedIn services, they have maintained a positive profit growth year after year.
Employee benefits at Amazon not only include healthcare and a 401k plan, but they have also recently included reimbursement for adoption fees and increased paid leave plans to 4 weeks of paid prepartum medical leave, 10 weeks paid maternity leave, and 6 weeks paid parental leave. These employee benefit improvements really show how Amazon is willing to provide their employees with a fair amount of time to parents who have given birth, adopted, or are taking care of their spouse.
In the past, Amazon has had a difficult time keeping increased profits, however this year they are starting off strong due to their new products like the Echo and Alexa, and the exclusive offers they provide with their Amazon video and prime services. In fact, Amazon has turned a profit for 8 straight quarters in a row, and Amazon’s first-quarter revenue sales of 2017 were up by 23 percent to $35.7 billion. Additionally, Earnings Per Share (EPS) jumped 32.2 percent from $1.07 to $1.48, and Amazon Web Services sales have increased 42 percent to $3.66 billion.
3. American Express
American Express has increased a lot of employee benefits in 2017 that cover potential or future parents. Not only has paid parental leave increased to 5 months, but American Express employee benefits also provide $35,000 to assist with adoption or surrogacy, as well as a lifetime maximum of $35,000 applied towards infertility treatment. It’s clear to see that this business cares about staying family oriented with its services like free 24-hour access to lactation consultants and free breast-milk shipping for company travels. Other employees are still benefitted from health care plans, flexible work arrangements, and a variety of other helpful resources.
When it comes to increased profit, American Express first-quarter profit has exceeded expectations. Despite cutting partnership with Costco, this credit card company has been making successful strategic moves to make up for lost revenue. Fortunately, this has lead to revenue rising 7 percent to $7.9 billion and EPS has increased 4.7 percent from $1.28 to $1.34 during the first-quarter.
Another well-known company that has recently increased both its employee benefits and profits, is Nike. Like American Express, Nike has shown interest in providing for the potential parents of its company as well as those who are taking care of sick relatives. Nike’s updated policy dictates that birth mothers are eligible for up to 14 weeks of paid leave and co-parents or those caring for relatives can take up to 2 months off. Every Nike location provides variable health coverage, fitness center memberships, paid sick leave, retirement savings, and other benefits.
Nike has proved once again that a business should never sacrifice its employee’s well-being to make up for lost profit. A flourishing company like Nike can accomplish both and has shown so during the first-quarter results of 2017. Nike’s revenue has climbed 8 percent to $9.1 billion, and their EPS rose by 9% with a $0.73 increase from the previous year. It’s expected for these increased profits to continue a steady incline as the year moves forward.
While IKEA is not nearly as profitable of a company as Microsoft, this Swedish-based furniture retailer is expanding its stores and revenue at an alarming rate. This partially has to do with the employee benefits that they provide and keep improving upon each year. IKEA benefits offer up to 4 months of paid parental leave to all US workers, whether they work by salary or hourly, and regardless of whether they are becoming parents by birth, adoption, or fostering. This January, they provided a minimum wage increase along with a steady healthcare plan, 401k plan, retirement plan, and even tuition assistance.
Having just expanded into China, IKEA has experienced some increased sales and online growth for the past year. Their net profit rose 5.5 percent to 3.5 billion euros (around $3.9 billion) and sales growth for in-store sales increased by 5 percent and online stores increased by 35 percent. As they continue to expand locationally and provide more benefits for employees, IKEA’s estimated growth by 2020 will make it a huge contender in the stock market.
Adjusting to Business Changes
If there’s anything to take away from these company’s employee benefits and increased profits, it’s that they have a business model that works for them. In Arizona, Prop 206 changes may have inspired you to build your own successful business model. However, learning how to balance your finances and employee benefits and payroll can be complicated and time-consuming. That’s why being assisted by a company like PayTech can help you learn how to treat your employees well without sacrificing profit. PayTech offers services in accounting, taxes, HR support, and payroll that make managing your business a simpler task. Let’s work together to get the professional assistance you need to expand your business under the new law changes this year!