Question

Many compensation professionals are faced with making choices about which discretionary benefits to drop because funds are limited and the costs of these benefits continually increase. Assume you make such choices. Rank order (at least five) discretionary benefits from the ones you would most likely eliminate to the ones you would least likely eliminate. Explain your rationale. Do such factors as the demographic composition of the workforce of the company matter? Explain.

Answer 1

Benefits I feel are important and that will be kept are medical, dental, and vision benefits packages which are used to meet a variety of health needs. I also think that planning for retirement is important so a 401K or other pension plan is necessary.

Bonuses can be important to work towards a goal and make the employees work harder to achieve the goal to receive this incentive pay. I would also keep this unless absolutely necessary. I believe that this will pay for itself in the end with the profits the employees can bring in,

Personal day or vacation time should be earned. Everyone needs time off from work to have a good work / life balance. The employee should earn a certain amount per pay period to use for sick days or personal times off days. I would not give the employees 2 weeks vacation time plus sick pay on top of it.

Paid holidays are also necessary to keep the employee morale up. By having happy employees who can spend time with their families around the holidays they will work better for you. Holidays that include pay will be Memorial Day, Labor Day, 4th of July, Christmas, New Years Day and Thanksgiving. All other holidays will be unpaid.

Unfortunately, tuition assistance is one benefit that would be cut. There are a lot of programs and grants that the employee can take advantage of through their school that the employer should not have to pay for.

Adoption assistance is another program what would be cancelled along with daycare coverage and wellness programs. I feel that the company would be able to work out a deal for a discount with local gyms or daycares where they can make a “trade” of sorts. By having one place that employees can go to get a discount would be beneficial for the company offering the service because they will still earn money and the employer will know that their employees can still come to work and be healthy. Adoption assistance doesn’t have a lot of other options for and should be eliminated.

Demographics of the workforce do matter when providing benefits. If you have a lot of part time workers, you may not provide the same benefits that you would for full time employees. Also, one benefit may be more important that another one.