Question

We all know the cost of benefits typically increase year over year. For the past three years, those increases to benefits cost have grown more than what is comfortable for the employer to absorb. You are the Benefits Manager for a start-up company struggling to survive. You know that offering benefits may help you attract, retain and motivate a workforce…but you are not so sure about which discretionary benefits your workforce would prefer. Your company employs a diverse population of mostly young professionals (in their 20's and 30's) who are not very knowledgeable about benefits, but they think having benefits is a good idea. As the Benefits Manager, you are faced with making strategic and difficult choices about which discretionary benefits to drop because funds are limited and the annual increases are just too high (after years of double digit expense growth in discretionary benefits). You must make strategic choices on behalf of your organization. Rank order discretionary benefits, starting with the ones you would most likely drop and going up toward the discretionary benefits you would least likely drop. Explain your reasoning why and how you chose the benefits to drop.

Answer 1

Below are the the discretionary benefits in order of the requirement to dropping from the benefits policy -

1. Employee loans or salary advances at 0 % interest rate - Employees misuse this benefit to clear off their bank loans or any other debts if there is no limit or conditions on how these loans can be offered.

2. Sick leaves - The most frequently used benefits by most of the employees which require no verification by employers and hence can be taken at will.

3. Paid vacations - All Employees use paid vacation and spend a lot of money without any concern as employer pays for the same. The paid vacation benefit should be removed due to huge costs for the employers annually.

4. Lowering healthcare insurance coverage - Health insurance coverage is being misused by playing around with the terms and conditions eg. admitting as inpatient to get the coverage for a minor health issue etc.

5. Gifts for employees in the form of costly gadgets etc. should be avoided.