How to get employees to 'stick around'
Dan Schwab remembers when he and his brother, Michael, not only knew every person at their company by name but could also rattle off the names of their spouses and kids.
That’s a little harder now that the business has 1,200 employee co-owners. But the Schwabs, co-presidents of Harrisburg-based D&H Distributing, still try to maintain a culture where each individual at the company feels important — and sticks around.
Those efforts, Dan Schwab said, have paid off. The average tenure at D&H is more than 10 years.
“(The personal attention) makes us sticky, but more importantly it’s just the right thing to do,” Dan Schwab said. “It’s what you would do for your own family.”
D&H started as, and has remained, a family business since Dan and Michael Schwab’s grandfather founded it 99 years ago. Dan and Michael Schwab’s father, Izzy, still serves as CEO, coming into the office every day with a little white fluffy dog named Sugar.
The company began as a tire retreading business before branching into distribution. Since then, the company has evolved into a connector between manufacturers and retailers, helping brands ranging from RCA to Atari make their way to store shelves.
The company’s manufacturing partners include big names like Microsoft and Intel, which work with D&H to get their gizmos and gadgets to places like Best Buy stores and Amazon warehouses.
The company is the largest privately held company in the midstate based on annual revenue, with $3.5 billion reported for 2016.
The motor powering this growth is the company’s roughly 1,200 employees, who own 36 percent of the company under D&H’s employee stock ownership program. These employee co-owners receive more than half of the company’s profits.
“We have tremendous loyalty, tremendous work ethic,” Schwab said. “Everybody treats it like it’s their own business because it is.”
A long list of employee perks provide further incentive for employees to stick around: loan programs, company picnics, movie nights, fruit and vegetable delivery at the office, dry-cleaning pick-up and delivery, and discounts on everything from cellphone plans to gym membership, just to name a few. These services are all in addition to more standard offerings like 401(k) matching.
During D&H’s annual summer trade show in July, several D&H employees working the booths also pointed to less tangible benefits.
Bob Careless, a nine-year employee, said he enjoys working for a company that seems to be thriving under a solid business model and good ownership. He also praised D&H’s flexibility, saying his bosses were sympathetic when he needed time away from work after his wife’s death last year.
Ben Bundy, a five-year employee, said D&H was similarly understanding when he underwent knee surgery, letting him work some days from home so he didn’t have to take as many days off.
Careless and Bundy said they enjoy the work they do and the people they work with — something Schwab believes is just as important as the company’s long list of benefits.
Making the time
Dan Schwab credits D&H’s employee retention not just to the ESOP and other perks but also other steps the company has taken.
Employee feedback is responsible for some of the best decisions the company has made, Schwab said. He and his brother meet personally with new hires on their 90-day and one-year anniversaries and ask them to share what is — and, more importantly, is not — working at the company. This feedback loop continues throughout every employee’s tenure.
“Big companies tend to be ivory tower,” he said. “If you only talk to your management team, you only hear one perspective. So we started meeting with different levels of individuals throughout the company.”
These meetings have delivered results that make employees happy and the company stronger, he said, bringing about everything from an employee fitness trail on D&H property to efficiency-increasing process improvements.
Schwab acknowledged that not every company feels able to offer extensive employee benefits. But he believes not investing in employees costs a company more in the long run.
“Even if you’re a 15-person firm, what does it cost you to take your team to an escape room for the night or go to a go-kart track or mini golfing?” he said.