1.1: Employee Benefits - An Overview
Why Do We Have Employee Benefits?
- Began as a form of social insurance during industrialization and the Great Depression
- Retirement plans were the earliest benefit - begun in the late 1800s
- Welfare practices described anything for the comfort of the employee and not required by law
- Today, employees view benefits as entitlements.. Why do you think this is?
Three Roles of Benefits Programs
- Protection programs - guards against loss of income caused by illness, disability, or unemployment
- Paid time-off - guarantees payment for holidays, vacation, or illness
- Accommodation and enhancement benefits - promotes opportunities for employees and their families
Legal and Regulatory Influences
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Social Security Act of 1935
- Mandates a variety of programs such as federal retirement and unemployment insurance
- Learn more: Historical Background and Development of Social Security
-
Employee Retirement Income Security Act of 1974 (ERISA)
Sets minimum standard for most voluntarily established retirement and health plans in private industry
- Provides protection for individuals in these plans
- Learn more: ERISA website
Strategic Planning and Benefits
- Todays's market is competitive!!
- Companies need to offer benefits that employees want or need
-
According to the
US Chamber of Commerce: The top 3 reasons employees are changing jobs
- Work-life balance
- Flexible scheduling
- Positive culture
Informations Sources to Consider in Strategic Planning
-
External Market Environment
- Economic conditions and forecasts
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Employer costs for compensations and benefits
- benefits average 30% of total compensation costs
- Government regulations of employee benefits
- Changing demographics of the labor force
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Internal Company Environment
- Workforce demographics
- Collective bargaining agreements