Taking on the Benefits Burden

With the problem of human-capital cost hikes reaching critical proportions, CFO devotes an entire issue to health care, retirement plans, IT/outsourcing, and perks.

Yet retirement experts warn that employees aren’t saving enough in their 401(k) plans to retire comfortably. And during the last downturn, some employers suspended 401(k) matching funds, making the plans more vulnerable to economic conditions. Companies that have maintained pensions — usually under pressure from unions — have been rewarded by stricter accounting rules, with more regulations on the way. Meanwhile, the Pension Benefit Guaranty Corp., which backs those pension plans, is in worsening financial condition. It all adds up to a potentially greater problem for U.S. companies: a whole generation of Americans who can’t afford many goods and services.

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In many facets of business, automation is the goal. But for human resources, it’s merely the means to an end — and perhaps a new beginning. HR is often an administrative sinkhole, as staffers struggle against an overwhelming tide of paperwork and record-keeping. Health plans, 401(k)s, and other traditional benefits are a boon to not only employees but also a vast number of print shops. The question for HR departments is, if all that were to go away — through outsourcing arrangements or a self-service portal, for example — would HR’s presence be diminished, or enhanced?

HR executives argue that if they can effectively tap automation to address the mundane, they will have far more time to tackle such strategic workforce issues as pay for performance, succession planning, and talent management. To be successful in those efforts will require a strong partnership with finance. Then, companies can leverage what they have always claimed is their greatest asset — their employees.

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Any Storm in a Portal

Same Caller, New Message


Birthday cakes, bagel Fridays, occasional gift certificates. As companies cut back on big-ticket benefits, they have come to appreciate that little things can mean a lot. Today, more companies are offering perks as varied as backup day care, flextime, life insurance, pet health insurance, transportation subsidies, paternity leave, and even concierge services. The trend emerged first in the dot-com days when companies tried to lure finicky techies (and keep them at their desks) with promises of dry-cleaning and pizza delivery.

More recently, companies have recognized that they can get more bang for the buck — especially with young employees — by subsidizing voluntary benefits. Even cheaper are arrangements that provide workers with group or pretax purchasing, where the only cost is administering the benefit. In the long run, these smaller goodies don’t compensate for cutbacks in health-care coverage, but they do go a long way toward boosting employee morale without expanding the company waistline.

Extras! Extras!

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