Discretionary Benefits

Not all benefits are created equal both for employees and businesses. Many of the costs of these benefits out weight the benefits. If I had to rank the benefits in an order from the most likely to eliminate to the ones I would least likely eliminate. I would have to put transportation services as the most likely followed by financial education programs. Both of these are at the top of my list since they are beneficial but not something the average employee will consider during an interview. Next I would place wellness programs and employee assistance programs (EAPs). These programs are beneficial to employees but very costly to implement and maintain. Things at the bottom of the list and shouldn’t be eliminated are insurance programs, PTO beyond what is legally required and retirement plans. All three of these items while expensive are things employees look for when searching for a job. They can make or break getting a highly qualified candidate to join your business. Several factors can go into what kind of benefits a company offers. They include what age range of candidates they are seeking; younger candidates will care more about certain benefits such as more PTO and retirement plans while older candidates might care more about quality insurance plans and wellness programs. Another factor that can impact what benefits to offer is if the company is in a highly profitable business sector. If the company has thin profit margins it will be forced to offer less discretionary benefits than a company like Nike with higher profit potential. Discretionary benefits can affect employees by giving them a better work life balance or peace of mind. Many employees will settle for a slightly lower salary if it means better discretionary benefits for them and their families.


MGMT 549 lectures

Chapters 9 and 10 of Strategic Compensation.

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