Question Answered step-by-step Case 13-2: Google Searches SAS for the Business Solution of How to...

Statistical Analysis System Institute Inc. (SAS) is a privately held company that develops software to provide business solutions for their clients. As of 2013 they employed more than 14.000 people and reported revenues of $3 billion. Founded in 1976, they maintained high profits during the 5 recessions. They have also maintained a growth rate of more than 10% per year from 1980 to 2000. [1] Besides the impressive growth of the company, SAS has made it in the Fortune - Best Companies to Work For list for almost two decades. Google has made it on top of this list for the past 3 years but they do not hesitate to confess that they implemented SAS' model in their HR practices; yet why would Google a very successful firm in their own right copy SAS? [3] 

Perhaps Google mimics SAS because the company's achievements are built upon a culture that keeps their employees satisfied and motivated. Feeling ecstatic about the company's cultural environment, SAS employees are highly motivated, intensely loyal and very dedicated to delivering only the highest performance results. Why? According to the CEO/Co-Founder, James Goodnight, SAS functions like a triangle where happy employees are essential for great customer service and great customer services is the key to a successful business. Employees know that SAS will provide anything that will increase productivity or inspire their imagination. For example, more than 3,000 pieces of art are displayed throughout its premises, including employing 2 full-time artists to keep the environment updated. [2] By testing their perks SAS realized that these types of benefits are key factors to their highly profitable business.

 

One an advantage of running a private business is that CEO James Goodnight does not have the obligation to answer to shareholders, board of directors or to anyone on Wall Street and therefore can take some calculated risks when it comes to building that cutting edge culture; a culture that focuses on creating an environment that fosters originality and innovation and keeps employees' minds sharp. Software development is a mentally challenging business and therefore the proper environment is needed to foster creativity and thinking outside the box. The goal of SAS is to create a stress-free environment for their employees so they enjoy being at work by providing a work environment with as much comfort and convenience as possible. [2] What are the foundations of a stress-free environment?

 

SAS's provides their employees competitive pay, discretionary bonuses, medical care, retirement plans (401k), profit sharing and disability benefits. SAS also provides a vast amount of what are called "convenience benefits" which are very appealing to job applicants. These new benefits began with free M&Ms every Wednesday and later included a no company dress code policy and no specific working hours when employees have to clock- in or clock- out. [1]

 

In addition, the main headquarters in North Carolina provides their employees an on-site, state of the art fitness center, swimming pool, tennis courts and even a golf course. The following no cost amenities are also available: Dry-cleaning, car-detailing, day care programs for employees' children, and a cafeteria that serves 2,500 meals per lunch with no reserved room for executives. In SAS there is a work/life center that provides care for the elderly, helps manage financial debts, or handle personal problems like divorce. SAS provides in-house health benefits and amenities free for all their employees. They only require an employee to pay 20% of the bill when they are seeing an outside specialist.

 

SAS's culture and benefits programs have led to a remarkable low employee turnover rate of 3%. [1] But good luck landing a job there! They receive more than 15,000 applications per year! [2]

 

Questions and Answers

 

What are the statutory benefits SAS must offer every employee? What defined benefits do they offer beyond those requirements?

 

SAS offers an array of employee benefits, especially at their main headquarters. What might be their rationale for providing such services to their employees?

 

What would you suggest if utilization analysis indicated that only a few employees used those additional benefits such as the work/life center?

 

What seems to be the weakest part of SAS's benefits package? What would you do instead of offering that particular benefit?

 

What additional amenities might SAS offer their employees? Why?

 

How does their 3% turnover rate impact training & recruiting expenses?