Employee benefits are a critical part of motivating workers but must be controlled to minimize the costs on the employer. Some of the standard benefits include medical benefits, paid maternity leaves and holidays, and retreats among others depending on an employee’s position in an organization. Some of the steps taken when deciding the reduction on benefits include evaluation of costs and the importance and legalities concerning each type of benefit.
There are several steps necessary to aid in the identification of where the reduction in benefits would benefit the company most. First, the evaluation of each benefit’s importance to the employees as well as which benefits the employee controls is critical and allows for better prioritization of workers concerns. Secondly, the costs of each benefit per year must be identified to reduce excessive spending successfully. Besides, the legal prerequisites as to what benefits employees are entitled to must be put into consideration when cutting employee benefits.
One of the benefits that should be altered is the implementation of medical benefits. Rather than using employer insurance to cater for specific health services, an emerging trend where employers are offered a Health Savings Account (HSA) that has cost saving initiatives for the organization can be utilized (Miller, 2011). Employees would have the freedom to choose the type of medical care they desire while the introducing tax-deductible contributions (Miller, 2011). Pension and retirement benefits should not be altered as they are major motivational concerns (Habib, 2015). Another change highly likely to minimize costs would be in life insurance where the employees can be encouraged to take private insurance that protects them from a wider variety of issues through a similar program as that of HSAs. Paid vacations, holidays and sick leave should only apply to permanent employees who have a significant contribution to the company successes. However, one change to these benefits would be to minimize the paid vacation in favor of increasing medical benefits.
- Miller, S. (2011). Employee benefits costs force difficult trade-offs. Society for Human Resource Management. Retrieved from https://www.theglobeandmail.com.org/resourcesandtools/hr-topics/benefits/pages/tradeoffs.aspx
- Habib, M. (2015). Chopping employee pay or benefits cuts both ways. The Globe and Mail. Retrieved from http://www.theglobeandmail.com/report-on-business/chopping-employee-pay-or-benefits-can-cut-both-ways/article27099775/