Comp and Benefit Solution
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Your CEO has just read an article in THE WALL STREET JOURNAL that discussed how employee benefits costs are on average 40% of total payroll costs. To save money, he suggests the company fire the entire benefits staff (saving hundreds of thousands of dollars per year) and simply eliminate all non-legally required benefits. In exchange, he'd like to give all employees a base pay raise of 30-40% instead of offering benefits - they can simply purchase their own benefits if they want them.
-Provide at least one argument that could be presented to your CEO to persuade him/her that this is not a good idea.
-Provide at least one argument that supports your CEO's idea.
-Explain what anticipated impact you believe this plan would have on the organization's ability to attract, retain and motivate employees
AND
We are witnessing an unprecedented shift in employee benefits:
- a shift in responsibility
- a shift in risk
- a shift in cost
What do we mean by a shift in responsibility, risk and cost? Provide specific examples. Discuss practical examples of this shift and the impact it has on employees.
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Solution Summary
The expert provides an argument that supports the CEO's idea of raising employees base pay. The anticipated impact on the plan is determined.
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窗体顶端
http://ww2.cfo.com/human-capital-careers/2003/02/benefits-nearly-40-of-payroll-study-finds/
http://webcache.googleusercontent.com/search?q=cache:QuUiz5b5MSAJ:www.na-businesspress.com/JAF/MacDonaldDB_Web13_1_.pdf+&cd=9&hl=en&ct=clnk&gl=us
Your CEO has just read an article in THE WALL STREET JOURNAL that discussed how employee benefits costs are on average 40% of total payroll costs. To save money, he suggests the company fire the entire benefits staff (saving hundreds of thousands of dollars per year) and simply eliminate all non-legally required benefits. In exchange, he'd like to give all employees a base pay raise of 30-40% instead of offering benefits - they can simply purchase their own benefits if they want them.
-Provide at least one argument that could be presented to your CEO to persuade him/her that this is not a good idea
The reason that this will not be beneficial for the company is because it invariably harms employees, this is the argument that would be used to persuade the CEO that this approach is not a good idea. First and foremost, employees lack the expertise, knowledge, and resources to sufficiently ensure that benefits such as the most significant benefit, healthcare are negotiated in accordance to the most beneficial for employees. Employers such as this CEO believe that they can contain healthcare costs, which represent the most significant employee benefit that adds to payroll costs, by ushering employees into consumer-driven plans that require individual employees to bargain with healthcare providers and insurers to ensure they receive the most optimal healthcare price and coverage. This approach is flawed because it requires employees to ...
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- MS, Prairie View A&M University
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