Question

You are working in Human Resources for a large corporation. The Chief Risk Officer (CRO) mentions to you that the cost of providing employee benefits continues to trend higher, and is seeking solutions. What are some possible changes that can be made to the employee benefits package that would help keep costs under control?

Answer 1

Some of the possible changes that can be made on the:

Insurance front: Health and any insurance benefit can be linked to the seniority level of the employees. The rationale behind this is that junior-level employees are generally young and have lesser insurance considerations, while senior-level employees generally lie in the higher age bracket, and hence insurance benefits are required. In short, the insurance floater amount should gradually increase with seniority or age and not be uniform for all. Insurance plans must be partially funded ie. the company will pay a share of the insurance premium and the rest is borne by the employee

Variable component: A higher performance-linked bonus variable component can be made a part of the employee's salary. In this way, employees would be kept motivated at work, at the same time fixed costs can be reduced

Vacation time and plans: Vacations are important for employees as vacation gives them the required breaks and hence the productivity is expected to go up. However, tie-ups must be made with travel agencies, so that if employees utilize these packages, it is a win-win situation for both the company and the employee as the company will get a commission for each of its employees subscribing to the vacation package.

Commuting expenses: If the company has some arrangement for employee transportation, the costs of such can be reduced as the expense of operating a fleet of buses or cars is high. Instead, employees must be encouraged to use public transport and the expense of such transport can be reimbursed by the company.