Novaspect, Inc.

“The company grew up with a large recordkeeper, but the executives started to recognize they wanted to have more of a financial planning and coaching expert on-site to kick up the level of holistic planning for employees.”

In August 2018, Novaspect, Inc., in Schaumburg, Illinois, unveiled its student loan repayment program: For each employee with an eligible loan, it would contribute $100 a month, up to a lifetime maximum of $10,000, to help eliminate that student debt.

That’s only one of the financial benefits the engineering firm provides for its workforce. Just a few others are its 401(k) with 6% match, an employee stock ownership plan (ESOP) and unlimited paid family leave.

Asked what she views as the strengths of the benefits, Kelly Mutuc, vice president, talent management cites the match, also “our automatic enrollment and our annual resolicitation[—what some call re-enrollment]—for folks to join the plan. We really are focused on our employees’ long-term financial stability.”

As to whether automatically enrolling participants at a 6% deferral rate with a 6% match was a hard decision to make, Mutuc says not at all: “We thought it was important to start our workers at a high rate.”

Rita Fiumara, senior retirement plan consultant and senior vice president at UBS in Chicago, and the plan’s adviser since 2016, says auto-enrolling participants at 6% was her suggestion, so they could take full advantage of the generous match.

The help of an adviser

It was, in fact, to get help managing its expanding benefits—which also included tuition reimbursement and health savings accounts (HSAs)—that Novaspect hired UBS, its first adviser, Fiumara says. Moreover, many workers had 401(k) balances as high as $500,000, as the average tenure of its employees had reached 15 years, she notes.

“The company grew up with a large recordkeeper, but the executives started to recognize they wanted to have more of a financial planning and coaching expert on-site to kick up the level of holistic planning for employees,” she says.

Novaspect became employee-owned in 2016 and is in the fourth round of distributing shares to its employees. “Last year, we contributed 50% more than we did in 2018,” Mutuc says. “In any given year, employees receive 2% to 4% of their salary [in company stock]. Our goal is to give them an opportunity to amass money they wouldn’t have anywhere else.”

Mike Franz, chief financial officer (CFO) at Novaspect, says one reason the company decided to offer an ESOP was, “Culturally, our company has always seen our benefit package as a key to remaining competitive. Benefits are a key component of our overall compensation package, [as] many of our hires come from Fortune 100 companies and large consulting firms.”

The sponsor wanted to be sure it explained these changes to all of its employees clearly. So, it created what it calls its “culture committee.”

“For the size of our company, 340 people, we are fairly spread out, across 10 locations and seven states,” Mutuc says. “This causes some challenges related to communication and education. Additionally, we have a wide range of employees coming from various backgrounds, including technicians, welders, assemblers, inside sales, outside sales, system engineers, application engineers, account support, finance, information technology [IT], information systems, and many more.”

The culture committee—a team representing the entire territory and various business units—“create[s] educational materials and communications that target these folks [based on their demographics] across our geography,” she says. “The committee has focused on driving impactful events and education about the 401(k) and ESOP that [members of] a diverse company can all relate to.” UBS, too, provides education and supports the team by holding one-on-one and group education events.

Competitive benefits

As student debt is a woe that could be felt across most of those job types, the debt repayment program is a popular addition. All employees participating in it have remained with the company since it was first rolled out, Mutuc observes.

According to Franz, the program fulfills several objectives for Novaspect. The firm wanted to hire new graduates as a way to compete against larger companies; those young employees could then learn from the seasoned veterans and contribute to creating a more diverse workforce. As many of those graduates have significant student loan debt, the program could be a means to gain and build worker loyalty, reduce turnover and boost productivity. Achieving those ends is very important to Novaspect, Franz says.

To further heighten its competitiveness, a year ago January, Novaspect revised its personal leave policy. “We now offer unlimited personal time off related to personal or family emergencies, illness or personal situations,” Mutuc says. “We understand that life happens, and at times we all have personal struggles to work through.” Employees eligible for leave time will be paid at 100% of their base pay. This includes a fully paid parental leave for the birth or adoption of a child.”

In one instance, an employee’s new daughter had been born with a heart defect and needed surgery, Mutuc says. The employee greatly appreciated being able to take time off to oversee the restoration of his child’s health, she says.

This February, Novaspect launched a new rewards program through its medical plan. “This program will give employees additional visibility into the cost of medical providers so they can be better consumers,” Mutuc says. “If they then choose to receive services from a below-average-cost provider, they’ll be eligible for gift cards from $25 to $300, depending on the level of savings. We are self-insured, and we have a consumer-driven plan. This program will save employees and the company money, as well as build their understanding of health care costs that will help them for the long term.”

Novaspect’s “robust benefits program” and the firm’s commitment to its employees “speak to how it is as a company” and makes working with it and its employees a true pleasure, says Fiumara. —Lee Barney