The Benefits Picture Today
benefits : Indirect financial and nonfinancial payments employees receive for continuing their employment with
The Benefits Picture Today . “What are your benefits?” is the first thing many applicants ask. Benefits—indirect financial and non financial payments employees receive for continuing their employment with the company—are an important part of just about everyone’s compensation.
They include things like health and life insurance, pensions, paid time off, and child-care assistance.3 Employee benefits account for about 37% of wages and salaries (or about 30% of total payrolls).
relative importance of employer Costs
for employee Compensation (private industry)
For most employees, health benefits are the 800-pound gorilla of the benefits package. In one survey, 78% of employees cited health-care benefits as most crucial to retaining them; 75% cited compensation. But the same survey found that only 34% are satisfied with their health-care benefits.
Even human resource managers sometimes underestimate benefits’ attractiveness. One survey concluded that many human resource managers erroneously assume that things like job security and autonomy and independence are more important to employees than are benefits.
Employers therefore should design benefits packages carefully. The list of policy issues includes what benefits to offer, who receives coverage, whether to include retirees in the plan, whether to deny benefits to employees during initial “probationary” periods, how to finance benefits, cost-containment procedures, and how to communicate
benefits options to employees.
Legal issues loom large. Federal laws mandate some benefits (such as Social Security) while other benefits are at the employer’s discretion
However, federal law still affects discretionary benefits such as vacation leave. And employers must adhere to the laws of the states in which they do business. For example, California requires most state contractors to provide domestic partner benefits for employees.