An interesting snippet about Google employee benefits.
So let’s think about this for a minute. If you have an employee that is making 120K, and you have to pay out on this benefit. That is 60K a year for 10 years, or 600K. A nice benefit.
What does it cost Google. In the greater scheme of the company finances…. pretty much nothing. If Google has to pay this benefit 20 times per year I would be surprised. So let’s for a moment assume that Google pays this benefit 50 times a year. By extension they could have 500 concurrent payments taking place. Continuing with the 60K per year example as an average, the annual cost to Google is 30 Million dollars. Google’s Q1CY15 gross revenue was 17.2 BILLION.
The cost to Google of this benefit is negligible. The value of the benefit to employee loyalty, that is where it makes a lot of sense. For a company with 55,000 employees in a very competitive technology sector, attrition can be a killer. If this benefit helps to stem the turnover of employees the company benefits more than the cost of administering the program.
It is a great strategy from Google, and it is very beneficial for their employees. While no one wants to have to collect or payout on the benefit, the fact that it is there…. (to use a cliche) priceless.