| Benefits Essay Good thesis writing Essay done for you
Other than pay, individuals have various reasons for working for a particular organization or employer and benefits are normally among the most important. Currently, many employees are shifted their attention towards employers with good tangible benefits such as workers compensation, medical and health benefits, insurance cover and pension plans among other crucial benefits. Consequently, virtually every employer is striving offer their employees benefits as one of the major strategies to attract and retain them. However, the quest of many employers to ensure affordable cost for benefits for their employers has been so elusive because of the ever increasing costs for products such as health care insurance and pension for the retirees (Braden, 2009). The changing times and the ever turbulent economic conditions throughout the world are making it even harder to sufficiently cater for the benefits. This essay will discuss the most important trends that affect employers’ costs for benefits, and the measures being taken to deal with the situation.
Rosenbloom (2008) points out that according to the Employment Cost Index, there has been a rising rate in employer costs for employee benefits since the late 1980s. The private sector however recorded a substantial fall in rates of increase within employer for employee benefits since 1980. The main reason for this, and also serving as the first trend for significant trend that affects the sector, is decreased rates of salary and wage gains. Over the years, the rates of salary and wage gains have been shrinking not only within the private industry but also the public sector. This has in turn negatively affected benefits that are closely linked to wage movements such as Social Security, paid leave and overtime pay as they account for about two-thirds of the overall benefit costs. In spite of the strong relationship between the wage changes and benefit costs, the rising rate for benefit costs has for the better part stayed on top of that for wages. This disparity is due to higher costs for legally mandatory benefits like State unemployment insurance; retirement plans and health insurance.
Wish (2010) asserts that the difficulty economic times have fronted a challenge to many employers who have a daunting task of balancing between the need to offer competitive benefits such as health care cover and control costs. The need to withstand the turbulent economy has made many employers to design new models of benefits that will cut down on their spending.
The size of the company is another important factor that affects the employers cost for benefit. Big employers with large profit margins have very comprehensive employee benefit schemes as opposed to smaller companies. This is very evident especially when it comes to health care insurance benefits that costs a lot of employers funds. A good example of companies offering their employees very expensive benefits schemes and hefty retirement/pension scheme is General Motors and Microsoft. In general, it can be strongly affirmed that the benefits of awarded to employees are largely determined by the size of the company with big one paying their employees more handsomely (Wish, 2010).
Government policy is another crucial trend that determines how much an employer gives her employee in terms of benefits. The government plays a big role in both determining and planning for employee benefits especially the government sanctioned ones which are mandatory for any employer to be provided by any employer (Rosenbloom, 2008). For instance in America, the government requires that every employer offer their workers benefits like Social Security, workers compensation and medication with specified percentages depending on the nature and the size of the employer. This is however done through careful examination of various structures such as retirement income structure within their territory and establishing the most suitable plan in the light of the changes in demographics.
Even though many employers have been faced with the challenge of high costs for employee benefits as a result of the current global trends, they are doing all it takes to balance between providing benefits to employees and ensuring that the profitability of their organizations is not compromised. In other words, organizations have devised ways of ensuring that cut on the high costs of provision of basic benefits. First of all many employers have turned to offering benefits whose price tags are lower enough not to run them into losses. Such benefits include pet days, health club membership, sports tickets, massages and concierge services. This trend is not new however as it started way back in the 1980s and it is being applied effectively currently. This has significantly cut down the high costs of paying the benefits. For instance in the U.S. alone, the percentage of workers covered with pension has dropped noticeably since the strategy started being applied (Braden, 2009).
To ensure that the increasing costs of the benefits are kept almost at the same rate with salaries and wages there is a combination of many factors that play a very big role to help keep the benefits costs low. One of such factors is stakeholders ensuring that they keep price increases for medical services as low as possible (Rosenbloom, 2008). Medical cover is of the most expensive benefits hence if its costs are kept low, it will also lower the costs of the benefits for health care. Other measures that have been found to be very effective in ensuring that the costs are kept within limits include: pension fund investments accelerated returns, moderate cost rises in benefits that are legally required, and employer cost control attempts in retirement and medical benefit plans.
To sum up the whole discussion about employers costs for benefits, it is important to note that the recent instability in economic conditions throughout the world has been a major stumbling block in the provision of various forms of employee benefits. Other important trends affecting provision of benefits include government policy and the size of the company. There are efforts however that have been put in place to ensure that these costs dont compromise the financial positions of organizations. Such measures include: providing benefits with lower price tags, keeping the rising rates of benefits at almost the same rate as salaries and wages, and controlling costs within retirement and medical benefit plans.