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Is Benefits Compensation? What to Offer?

We read in the newspapers and see on the television how medical benefits are becoming less common for the average working man or woman. Nearly 16% of Americans no longer have health coverage the trend appears to be growing (Appleby, 2006). Companies are finding that medical insurance is becoming too expensive and are dropping the benefits.

Under 60% of people receive benefits from their jobs (Appleby, 2006). However, as companies begin to compete in a poor economy it is possible that benefits will again be dropped from many of the small employers that view such benefits as an additional cost and burden. These small businesses might not be thinking about benefits in the right way.

There is a growing trend in many American families to have one partner work for the money and the other partner work for the benefits. As many Americans are losing these benefits they become much more desirable to maintain. Companies often view benefits as an extra burden but they should really be seen as compensation and salaries can be adjusted accordingly.

Let us say that the average wage in a field is $50K. Through a study you found that most companies don’t offer medical benefits and the benefit program you are planning on offering will cost around 10K per year per employee. You can offer 40K for the job and the benefits to come to a $50K competitive compensation.

You might assume that some employees wouldn’t be interested in making less money. You are correct that some employees won’t. However, you are also likely to find that by offering the benefits package you are getting candidates that are more stable, are fiscally responsible and have families. If you only offer money you may find that the type of employees who don’t save money, are highly in debt and more gratification seeking are applying to the jobs.

Benefits are part of a compensation package. They are not separate and should be factored into the overall equation of what the position is worth to the organization and what is being paid out to employees. With such knowledge compensation managers can adjust the pay, benefits and perks within the total compensation amount to find the right mix for recruiting or retaining the best employees.

Article Source: http://www.ebaykings.co.uk

Murad Ali is a three time book author, a business professor and a human resource manager. He runs the following sites: (Business Articles) www.themodernbusinessworld.com (Dating Articles) www.datingdesires.blogspot.com (Website Marketing) www.article-agent.org (Free article directory) www.article-agent.net

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