Question

What are some key domestic demographic changes affecting employee benefits? How can HRM combat these changes? What are some strategies companies use to develop benefit plans that are cost effective?

Answer 1

The key domestic demographic changes affecting the employee benefits and how they are combated by the HRM:

1. Aging population- The demographic shift to an increase in the aging population has posed greater challenges to the employee benefits. The changes in the Social Security’s retirement age from 65-67 is a classic example. The employers raise the retirement age thus having a greater concentration of older people in the organization. The HRM need to redesign their recruitment policies, training and other employee benefits. The employee benefits such as Long term disability insurance, retirement benefits, healthcare spending (which will be higher for older employees) need to be redesigned by HRM.
2. Gender- Women employees’ participation started to rise from 1950s. This change in the demographic factor makes it challenging for HRM. HRM need to develop programs to accommodate their needs such as part-time- flexibility work schedule, childcare benefits, etc. The increase in the women employment forces HRM to draft new policies and procedures to cater to the growing need of women employment.
3. Ethnicity- Globalization leads to diverse work culture which results in employees from different ethnic backgrounds. The employee benefits that is impacted because of the rise of the diverse work culture are relocation assistance, workplace perks such as food and drink, employee education programs, etc. Migration has impacted the recruitment and training of HRM. Hence, HRM needs to proactively explain their relocation assistance (such as temporary accommodation, relocation of goods, family, etc) to the migrant employees, workplace food and drink should be accustomed to all employees from the different cultural and ethnic background.

Strategies companies use to develop benefit plans that are cost effective are:

1. Identify the objectives of the employment benefit program and the organizational budget.
2. Conduct a needs assessment to identify if the employee benefits are suitable for the workforce.
3. The basic employment benefit program should have mandated employee benefits drafted by the federal agency. Example Social Security, worker’s compensation insurance, etc.
4. Apart from the basic employment benefit program, draft a benefits plan program.
5. Communicate the plan to the employees.
6. Evaluate the plan at regular intervals to know its effectiveness. If the employment benefits does not meet the purpose, then redraft the employment benefit plan.