Noncompete agreements and employee benefits
By Dr. Selim Erhan, TLT Editor | TLT From the Editor December 2024
Providing the right benefits mix enhances performance and raises profitability.
By the time you start reading this article most of you will be planning for the holidays. It is a time of peace, family gatherings and planning for the coming year. It may also be time for a last vacation before the end of the year—that is if we have any vacation days left.
Vacation is a general word that encompasses traveling or staying home to finish long-waiting projects or simply relaxing and catching up on activities with family and friends. The important part is taking time off and concentrating on something else but work, which is a great way to boost mental power, morale and helps relieve work-related stresses. Unfortunately on this side of the Atlantic Ocean, these benefits are mostly ignored. It is difficult to measure productivity but easy to measure loss in work hours when an employee is on vacation. Adding 10 days to an existing week of vacation would mean eight hours x hourly pay x 10, and there is a number in less than a few minutes to justify clamping down on vacation time. Does anyone measure the depression that a young person feels when they see they will only get five days of vacation for the next
several years?
So, when I was reading the article on the Federal Trade Commission’s final rule that will invalidate most current noncompete agreements and ban new ones in the September 2024 issue of ILMA’s Compoundings magazine, I thought about vacation. Increasing vacation time would be a very good incentive to encourage employees to stay, especially in today’s environment where traveling is so much easier, where young people have friends that live far from each other and enticing vacation spots are advertised wherever we look.
The area of retaining employees is an area where most companies pay a lot of attention. This is partly related to holding on to proprietary information in the company and partly a successful growth strategy. Motivating employees increases their productivity and encourages healthy growth. A work environment is also a learning environment. Employees quickly increase their knowledge in the field they are working in. The company thus grows as the employees’ knowledge grows. This growth is usually parabolic in companies that encourage teamwork. Human resources departments have various motivating programs and incentives to retain talent. Having to replace an employee is a very expensive process. Hiring a good employee has about a 50% success rate. Even worse, the employee that leaves could be a future Albert Einstein, Thomas Edison or Frédéric Chopin! It is so much more effective to keep and grow employee knowledge and productivity.
Then I read the article that was a few pages later titled “Solving the Employee Benefits Puzzle.” It was very comprehensive. It did have flexible and paid time off among 21 other types of benefits. I was happy to see that the importance of vacation had started gaining traction. I still think the term “paid time off” does not represent the spirit and the benefits of vacation. It still hints the company is losing money, which is really not true. This becomes clear when one reads the whole article where in multiple places it is mentioned how providing the right benefits mix enhances performance and raises profitability. So why not give it the positive spin it deserves? Call it vacation!
Dr. Selim Erhan is director of business development for Process Oils Inc. in Trout Valley, Ill. You can reach him at serhan@processoilsinc.com.