Durham marketing company Principled Technologies limits profits in favor of lavish employee benefits

Clockwise from front, Principled Technologies tech staffers Aaron Ward, Xander Madsen, Philip Ahlers and David Dieffenderfer finish up work just before the company's monthly lunch staff meeting Wednesday, October 7, 2015. Principled Technologies is a Durham technology marketing company focusing on technology products for large tech firms.
Clockwise from front, Principled Technologies tech staffers Aaron Ward, Xander Madsen, Philip Ahlers and David Dieffenderfer finish up work just before the company's monthly lunch staff meeting Wednesday, October 7, 2015. Principled Technologies is a Durham technology marketing company focusing on technology products for large tech firms.

When Greg Carrero took a seven-week paid sabbatical from his job during the summer, his decision to devote one of those weeks to volunteering his time for a good cause was “a no-brainer.”

That’s because his employer, Durham marketing company Principled Technologies, offers an irresistible sweetener: If an employee donates a week of their time during their sabbatical, Principled will make a $5,000 donation to the charity; or it will cover the employee’s expenses for the week and give whatever remains from the $5,000 allotment to the charity.

So, in between a 12-day vacation in Hawaii and a West Coast road trip, Carrero, who works in project management and product testing at Principled, spent a week building houses in Alaska for Habitat for Humanity. It was definitely hard work, but the “rewarding feeling” made it enormously worthwhile, said Carrero, 30.

Principled’s sabbatical policy is just one example of the rich, outside-the-box benefits package available to the company’s 84 employees. That includes both big-dollar benefits – such as a medical plan that eliminates out-of-pocket medical costs for employees and no vesting period to become eligible for the 401(k) plan – and quirky but nonetheless costly perks.

“We think businesses that focus first and foremost on their clients, the people they serve, and their employees ... instead of maximizing shareholder value, for example, ultimately will do better,” said Principled co-founder Mark Van Name.

In business since 2003, Van Name and co-founder Bill Catchings, who own the business, say the company’s extensive benefits and profit-sharing programs ends up taking money out of their pockets. But they’re okay with that.

“We put people over profit,” said Van Name. “So we invest in our future, we invest in taking care of people and we make a very modest profit.”

Van Name, 60, and Catchings, 57, have worked together for 30 years at several different companies, including a stint as freelance journalists who co-authored about 1,500 articles for the computer trade press. They’ve written a book about how they run their business titled “Limit Your Greed.” (They haven’t yet started looking for a publisher.)

“One of PT’s fundamental principles is everybody wins together,” Van Name said.

“Or loses together,” Catchings chimed in. “Hopefully we never have to go down that path, but we have had times when it hasn’t been as great.”

‘It’s a tradeoff’

Smaller, closely held companies tend to offer the most creative benefits, said Skip Woody, a partner and health and welfare consultant at Durham employee benefits firm Hill, Chesson & Woody. Indeed, Principled’s sabbatical policy appears to be paving new ground.

“I don’t ever see anything like that,” Woody said.

There’s more, including plenty of free food.

Each quarter the company covers up to $250 in meals – $1,000 a year – at Chelsea Cafe, a restaurant situated in its office building in the Imperial Center off Page Road. And, at the end of the year, Principled donates $400 to each employee’s favorite charity.

When he’s socializing, Carrero shies away from discussing the benefits he receives.

“I try not to talk about it too much because everyone ends up hating me by the end of the evening,” he said.

“To some extent, it’s a tradeoff,” he continued. “Working here, you definitely work really hard and you take on a lot of responsibility. This is really a company where everyone wins or everyone loses.”

Principled is a thriving company that has added 10 new hires this year. The company focuses on marketing technology products for the likes of Intel, Microsoft, Dell and Red Hat. It also designs online training programs that its clients use both internally and externally, which was the impetus for its recent acquisition of Chapel Hill’s WeejeeLearning, a nine-employee e-learning company.

Despite the rich benefits, Van Name said the salaries Principled pays “are extremely competitive, typically on the high side” and that “salary is almost never an issue” when the company makes a job offer.

Beci Markijohn, who works in sales support at Principled, became a believer shortly after she joined the firm a little over two years ago.

While she was still in her probationary period and therefore was paid by the hour rather than being on salary – a probationary program that has since been abolished – Markijohn’s father was in a bad car accident. She ended up working just 10 or 15 hours one week but, even though she wasn’t entitled to it, she received a full week’s pay anyway.

“That says a lot,” said Markijohn, 40. “They felt it was more important for me to worry about my family and taking care of them than to be worried about work that week and to be worried about the hours I was putting in.”

Free health benefits

Principled is unconventional in other ways. The company eschews titles and prides itself on not having an organizational chart or strict hierarchy. The goal is for teams to be flexible and self-managing as much as possible, although there certainly are team leaders.

“What they tell people is ... we assume that if you work here that you are a responsible adult who wants to do good work, and they treat people that way,” said Jared White, 32, a graphic designer at the company.

Unlike typical marketing agencies, the core of Principled’s business is conducting rigorous tests on computers, servers and other tech products and using the test results as a marketing tool.

“In a way it’s bringing an engineering sensibility to marketing,” said Van Name. Both he and Catchings have master’s degrees in computer science and once co-led a computer benchmarking subsidiary of media company Ziff Davis.

Gina Massel-Castater, a long-time Principled employee who functions as an executive assistant to senior leaders, including Van Name and Catchings, believes the company’s benefits represent “a mindset.”

“I have never worked for a place that was so compassionate,” she said.

Massel-Castater’s favorite benefit is “the entirely free health benefits.”

Profit-sharing checks

At a time when most businesses are asking employees to pay more for their insurance benefits, Principled’s program starts with paying 100 percent of the cost of the company’s high-deductible health insurance – for both employees and their families.

In addition, the company takes care of the deductibles – $2,700 for individuals, $5,450 for families. At the beginning of the year, employees get a for-medical-expenses-only Health Savings Account debit card that covers their deductibles; any money they don’t spend rolls over into next year’s account.

“I have no out-of-pocket expense at all for my health benefits,” said Massel-Castater, 63.

Other benefits include no caps on vacation time and a free laptop and a free cell phone every two years. The company also pays employees’ cell phone bills and their home Internet bills.

The owners’ egalitarian mentality extends to its atypical profit-sharing plan.

Profit-sharing checks are doled out twice a year. The mid-year check is a lump sum, which in the past has ranged from $2,000 to $5,000.

“That really favors the lower-compensated people,” Catchings said.

The end-of-year profit-sharing, on the other hand, is pegged to a percentage of employees’ salaries and have ranged as low as 5 percent and as high as 20 percent. That benefits the best-paid employees more.

Then there’s monthly $1,000 performance bonuses that reward employees for going above and beyond.

There’s neither a ceiling or a floor on the number of performance bonuses, which this year have ranged from as few as three to as many as 15 in a given month.

Although Principled is an nontraditional company, it has developed some traditions of its own over the years.

One of them harkens back to the company’s beginnings, when there was no profit-sharing plan but each employee got a $1,000 bonus check at the end of the year. So Van Name and Catchings continue to issue those end-of-year $1,000 checks – on top of those profit-sharing checks.

David Ranii: 919-829-4877, @dranii