Many businesses are now being forced to choose between maintaining employee benefit levels and increasing disposable income, as rising costs put many organizations in a tight spot, according to the Financial Executive Research Foundation.
These findings come from a recent survey that polled financial executives to discern how medical benefits would be impacted by the current economic outlook. Of those polled, 54 percent reported that while they wanted to keep employees' medical costs to a minimum, they are often forced to raise rates in response to the rising cost of health insurance coverage.
"Employee benefits represent a major portion of total compensation costs – 47 percent of companies said that providing employee medical benefits for the most recent fiscal year cost more than 10 percent of their total compensation costs," said Tom Thompson, a research associate with FERF.
While the tradeoffs may alarm some, many individuals are still drawn to companies that offer competitive benefits packages. In light of this, many businesses have attempted to keep essential benefits off the chopping block.
It is no surprise then that only nine percent of respondents reported making cuts to non-medical employee benefits, and a mere two percent have done away with dependent coverage, FERF reports.
