Discretionary benefits are a major cost that companies are facing. In fact, according to the text, these benefits account for almost 23 percent of payroll costs. If I were management, that number would be a terrifying reality.
Discretionary benefits consist of three categories. In no order of significance, those categories include: protection programs, paid time off, and services. Within those three categories, there are a multitude of different benefits. I have been given the task, as a compensation professional, to rank each of these benefits from the ones I would most likely drop to the ones I would least likely drop.
The category in which I would go to first in terms of elimination, would be services. Both day care and tuition reimbursement programs are two benefits that I would be quick to eliminate. I believe that family is extremely important and I should expect to have a high percentage of employees who have children, however, I do not think it should be the responsibility of the employer to provide and pay for a daycare service. Tuition reimbursement is another benefit that the employer should not be responsible for. Education should be a top priority for most companies, but there are many scholarships and other ways that employees can pay for their college career.
Paid time off is the next category I would look into, although this category plays a huge role in the employees morale. It’s beneficial to maintain positive employee behavior as it relates to better performance. As I mentioned earlier too, having employees who want to spend time with families around the holidays is essential.
These benefits are significant to people’s lives outside of work, however, they are not as important as the benefits under the protection program category. The three subcategories under protection programs are: disability insurance, life insurance, and retirement programs. These are all things as a compensation professional that I refuse to eliminate.
