Situation: A small company (fewer than 50 employees) is reviewing their employee benefit package and wants to get a sense of what others are currently covering in their benefit packages. Where does your company currently stand on employee benefits, and what does your company cover in its benefit package?
Advice from the CEOs:
- A recent small (unscientific) poll of entrepreneurial Silicon Valley SMB Companies on benefits offered found:
- Health: 100%, Dental: 83%, Vision: 67%, Disability: 17%
- 401K: 100%, 401K Match: 33% (most companies eliminated the match to reduce costs)
- Reduced benefits in the last 6 months: 67%
- Employee complaints or recruiting challenges following cuts: 0%
- One company commented that when a key customer cut their payments they had to cut benefits. They reduced the company payment from 100% to 50% of benefit cost. Their employees make choices among options available, with a company dollar payment cap. Management explained the situation when they made the cuts, and there were no objections.
- Several companies have shifted to consumer directed health care options.
- A comment of caution was offered by one CEO – employees are unlikely to object to their company needing to reduce benefits to get through a difficult market. However, as conditions improve, employees are likely to expect some level of return to prior benefit levels. If not, the company at risk of increased turnover. It is best to stay ahead of the curve to assure that your benefits packages are competitive.