• Website: www.hy‐ko.com
• Location: Northfield, Ohio
• Founded: 1949
• Total employees: 204; 30 percent are salaried, 70 percent are hourly, 0.02 percent are located outside the United States
• Employee demographics: 41 percent Traditionalists and Boomers, 34 percent Generation Xers, 25 percent Millennials
• What it does: Manufactures consumer goods such as numbers and letters for signs, as well as keys and key accessories
• Interviewee: Alice Bissett—Vice President, Human Resources

BACKGROUND

Hy‐Ko has been a family‐run business since its inception. “The culture is slowly changing from a mom‐and‐pop vibe to more of a corporate feel,” Bissett shares. “We're being more consistent in how we administer policies, which not everyone appreciates. It's been a challenge to keep long‐term employees motivated as they watch the company evolve,” which it has done partly to appeal to younger recruits—and to stay competitive as an employer for all ages.

As an established company, Hy‐Ko has a current employee base consisting mainly of the upper end of the generations, although recent recruiting efforts are beginning to draw in younger cohorts. While the company has a healthy environment that sees little conflict between the generations, Bissett did notice areas that could be improved when she started with the company in 2014.

Issues such as younger employees frequently calling in sick (due to the company's harsh time‐off policy) and difficulty in hiring Millennials (due to the company's benefits package) were identified. Bissett sought to tackle them one at time. “We're trying to make it a better, happier place to be,” she says. Another part of the challenge confronting the HR vice president was simply enacting and change, because “it's really hard to change thinking in a company that's mature.” But change it she did.

BENEFITS AND RECRUITMENT

When Bissett arrived at Hy‐Ko, paid time off (PTO) was not one of the company's more stellar offerings, particularly for new hires: employees did not receive any vacation time off until after they were employed with the company one full year. This was especially difficult for employees in the plant, because they were penalized with points for taking time off; when they had too many points, they were terminated. “They'd call in sick because they didn't have vacation days, and then they'd get a point for that,” says Bissett. “Before you knew it, they reached the limit where our policy dictated we had to let them go. We have to treat everybody the same, so we couldn't keep one employee who had ‘pointed out' and let another one go. We were losing really good employees who, through no fault of their own, didn't have the time off they needed.”

Because vacation had to be accrued, new employees started off with no vacation time at all their first year. PTO also did not roll over to the following year, which resulted in a lot more absences among younger employees, who made it a point to use all their days. At the other end of the spectrum were disgruntled older employees who, unable to find a convenient time to be away from the office, wound up forfeiting their vacation days. To motivate employees to come to work, the company offered month‐end events such as pizza parties and ice cream socials. Those helped, but the problem still persisted.

At the same time, Bissett noticed that potential new recruits to the company were negotiating PTO more than any other benefit as they went through the recruitment process, and prospects with an established career couldn't be persuaded to join a company that made them reset their PTO to zero. Bissett decided to overhaul the entire package. But because she was new to the company, she had to establish herself before introducing sweeping changes. She started by doing research.

“In Cleveland, we have a great service called Employers Resource Council, which conducts annual surveys regarding company offerings, including PTO and salary,” she says. She reviewed competitors' offerings and presented them to upper management. She also gave them insight into the number of employees who were “pointing out.” Her findings helped convince management that a change was in order.

Today, all three types of PTO—sick days, personal days, and vacation time—are rolled up into one, which employees, both new hires and current staff, can use as they see fit. The number of hours is prorated, with employees holding one to four years of tenure receiving a total of 128 hours. A rollover policy was also implemented. The end result was an increase in overall employee satisfaction and a major boost in morale—across all ages and company departments. Bissett says that management feels the improved PTO offering was well worth the added cost to the company. “The new system allows employees the freedom to attend their kid's play, take care of a sick parent—whatever they need. It allows them the time to do what they need to get done,” she says.

Another area Bissett focused on was working with older workers who were eligible for Medicare but still on Hy‐Ko's health benefits. Bissett explained to those workers that Medicare was as good as, if not better than, the health‐care options the company offered. Many had been reluctant to make the switch due to what they saw as an intricate system of paperwork, so Bissett helped them with the transition, as well as planned educational seminars and brought in outside specialists to assist with sign‐ups and paper processing. “I became somewhat of an expert on Medicare,” she says. The program gave employees the chance to see retirement as an option. Of the 10 employees who transitioned to Medicare, 4 retired within the year. “They finally felt comfortable doing so,” says Bissett. “Trying out Medicare's offerings before they retired helped alleviate their fears.” And those retirees were able to transition slowly out of their responsibilities instead of depart abruptly. It was win‐win situation for everyone.

Another benefits area that she's going to change is the 401(k) program. Bissett finds that younger recruits are less interested in a 401(k) package, instead caring more about moving up in the company and achieving better work‐life balance. To top it all off, there isn't much incentive to participate because the company doesn't match contributions. Older workers are more excited about this option, but Bissett says, “I believe that if we had a company match, we'd get more people signing up.” In her position prior to HY‐KO, Bissett says, “we held seminars to explain the 401k plan and exactly what ‘pretax dollars' mean. We showed them that if they contributed 30 dollars a week to their 401(k), it only affected their take‐home pay by perhaps 10 dollars, because the contribution is based on pretaxed income.” The effect was felt immediately: plan enrollment nearly doubled. At Hy‐Ko, Bissett says, “we've kind of tweaked our benefits a little bit,” and she is planning for even greater changes. “I still think we can be a lot better.”

CAREER DEVELOPMENT

Along with the aforementioned benefits changes, Hy‐Ko is in the process of implementing its first performance management program. “We used to give cost‐of‐living or merit increases across the board, usually 3 percent,” Bissett explains. “Now everyone has goals and objectives for the year, and you only get an increase if those are met. So you're not going to make the same as your coworker if you don't perform as well as your coworker, and a big part of that, particularly in the plant, is attendance,” she says, referring to the aforementioned issue with employees calling in sick.

An added bonus to the program is its appeal to Millennials, who have expressed a desire for more frequent feedback. “It will make a big difference with this group,” Bissett says. The more seasoned workers, however, are quite the opposite, often looking to keep their heads down rather than receive recognition. Despite this contrast in desire for acknowledgment, the program will benefit all age groups: Millennials will get their due credit, while all generations will have their career plans clearly mapped out for them, more easily allowing for pay increases and promotions.

Because Hy‐Ko already uses several solutions from business outsourcer ADP, tacking on the performance management software came with a relatively small price tag—just a couple thousand dollars. Although the program is too new to analyze its success, the return in morale and productivity will more than compensate for this meager cost, Bissett estimates. For management, the ROI is immense.

SUMMARY

Companies that were established during the time Millennials entered the workforce are more apt to offer packages that are considered progressive, if only because that's the environment the companies were born in. When prospective hires are on the job hunt, it's only natural that they compare offerings between potential places of employment. That means that those companies that still offer old‐school packages could be hurting themselves, which is why Hy‐Ko has made such a tremendous effort to be more competitive as an employer.

With all of the changes Hy‐Ko has introduced, Bissett plans to distribute a survey to get employee feedback. She anticipates a positive response, because she already receives informal glowing reviews. “I get people stopping by my office all the time to say they love the changes,” she says. “They want even more.” She can also see the difference in the company's turnover rate, which, although it has always been on the low side, has dropped even further.

Despite the challenges in evolving the company, Bissett knows the effort has been worthwhile. “We have a more mature generation here, so that's tough,” she admits. New ideas are not always looked upon favorably—whether it be from the enthusiastic younger generations or established company veterans—but Bissett has watched management change its way of thinking to be more open‐minded. “We have a long way to go,” she says, but she's proud of what has already been accomplished.