The benefits package is often far more important than what an employee's wage or take home pay is. In fact, it is quite common for the benefits package to be higher than the actual salary or wage for any given employee. Because of this, setting up a benefits package poses some major hurdles for benefit administrators. See below for a basic list of major concerns.
1. Determining the goals and objectives of the benefit's package
Primarily, the benefit package has to involve considerations of the wage, and what the remainder of the offerings amount to as far as costs to the employer. Benefits, unlike wages, are not unitary. Thus, it is critically important to determine valuation, goals for competitiveness, and cost- benefit ratios for the trade off in employment services. Additionally, the labor market demands of an organization and job profile determines what benefits package to offer.
2. Social and competitive assessments
Government legislation, such as healthcare and social justice needs, dictate major concerns for employee benefit and compensation. What the minimum wage is, what level of healthcare is necessary, and what things to cover in a package, are all social concerns. Likewise, administrators must review competitor rates and packages to ensure that they can fight for the top talent. What company X provides, who is relatively close in distance and job categories to an administrator's company, is a serious consideration for the management of human capital.
3. Legal restraints
Under ERISA employers must provide employees with a summary plan description and changes. This description must be given to employees when hired and every five years. More so, collective bargaining must be accounted for in the legalities of benefit and compensation administration. Have unions mandated something? How much monitoring is necessary to remain in good legal standing? These are all major considerations.