“ADT is a company that provides security systems and benefits are a form of security for our employees,” said Dan Pikelny, VP of HR at ADT on the immense benefit of good benefits. At From Day One’s Chicago benefits half-day conference, Pikelny spoke about the critical role benefits play in attracting, engaging, and retaining employees in today’s workforce.

Pikelny emphasized that benefits manifest before the final offer is signed—they start with recruitment. “The first thing that happens is they have to become an employee. So you have to attract them. So when a company is interviewing an employee, an employee is deciding whether to join, they are giving up a lot of their time, a lot of their family, a lot of their talents, and they want something back,” he said. “They want to be compensated for that, but they also want a sense of security.” 

Leaders at ADT, a 150-year-old company, have focused on security for the entire duration of its existence so far. For employees, security isn’t just about break ins, but also “what happens if there’s an illness or retirement,” said Pikelny. 

However, ADT continues to evolve as an organization, and this evolution has required a new approach to human capital. “We’ve become a technology company, so the strategy of the company has literally changed, and as a result, the human capital strategy has changed,” Pikelny said. “The type of people that we need to attract and retain may be different from the types of people we had to attract and retain before.”

Employee Listening and Engagement

“Wellness programs are a good tool for engagement that a company can leverage,” Pikelny told moderator Karl Ahlrichs, HR leadership columnist and consultant. “It gives employees something to be part of that’s greater than them, as opposed to just the things that they produce—installed alarm systems, spreadsheets, code, PowerPoints or anything else.”

ADT has developed a structured listening strategy to understand employee needs. “We use employee surveys at multiple points—after 60, 90, and 180 days of employment, during annual engagement surveys, and exit interviews. We even listen to what our candidates are saying during recruitment,” he shared. That is one input into a benefits strategy and “That’s how we identified the need for paid parental leave.”

Experimenting and Learning

It’s important to try new things, says Pikelny, knowing that failure might be an outcome. One experiment involved linking 401(k) contributions to employee performance. “We made our 401(k) plan performance-based,” Pikelny said. “We very quickly heard loud and clear from our employees that they don’t want their retirements linked to performance. The following year, we changed it back.”

The CFO’s Perspective on Benefits Spending

“Benefits are an important part of the income statement,” Pikelny said. “But It’s difficult to measure things that don’t happen because you’ve got benefits, right? And so we need to communicate the value of the right benefits package to the CFO,” he advised. 

While indirect, to demonstrate the value of benefits, leaders at ADT are developing a turnover and flight risk model. “We’ve built a turnover model that identifies factors contributing to employee departures. Some of those factors are outside of benefits, like manager relationships, but some are tied to the Total Rewards strategy,” he said. “If we can connect work within our Total Rewards package to reduce attrition, that’s a metric leadership can appreciate.”

Chris O’Keeffe is a freelance writer with experience across industries. As the founder and creative director of OK Creative: The Language Agency, he has led strategy and storytelling for organizations like MIT, Amazon, and Cirque du Soleil, bringing their stories to life through established and emerging media.