What is Compensation and Benefits?
Compensation and benefits management is the area of business concerned with paying employees for their time spent working for their employers. This may sound simple at first, but it is actually quite complicated and involves many important tasks. Perhaps the best way to explain what is involved with compensation and employee benefits management is to describe some of the more important tasks that managers of this area of business are responsible for.
Related Resource: 30 Most Affordable Online Bachelor’s in Human Resource Management
Determining Wages and Salaries
The first step in compensation and employee benefits management is to determine proper wages and salaries for employees. This is typically accomplished by researching similar companies and finding out how they compensate their own employees. Managers can choose to do this by using various online websites devoted to tracking wages and salaries, or they may choose to hire outside help that is experienced in this type of research. After finding out what competitors pay their employees, managers will then need to meet with top management to determine whether they wish to pay their own employees above, below, or similar to their competition.
Related Resource: 20 Companies With the Best Benefits
Choosing Appropriate Employee Benefits
Another important task of compensation and employee benefits managers is to choose appropriate employee benefits for their staff. They can research the types of benefits that their competitors offer to determine this, but they must also examine their staff’s needs and desires as well. For example, while some employees may be more concerned with on-site daycare, others may be more concerned with education assistance. To make sure that the benefits they offer to their own employees will be well-received, many compensation and employee benefits managers create and administer what are known as employee benefits surveys. These surveys can be created by the employers themselves, or they can be found on various websites online.
Offering Health Insurance
In the past, offering health insurance was not required of employers. But with the implementation of the Affordable Care Act, employers that have 50 or more full-time employees must provide health insurance to their employees. Employers with 50 or more full-time employees that do not provide health insurance must pay a fine as stipulated by the ACA. Employers that have less than 50 employees are not required to provide health insurance, but it is a smart idea to offer some type of healthcare assistance to employees since it is one of the most desired benefits among working persons.
Offering Alternatives to Health Insurance
Employers that have less than 50 employees may find that offering medical insurance to their staff is outside of their budget. In these cases, they may choose to offer what are known as health savings accounts, or HSA’s, instead. For employers that choose this option, employees put a set percentage of their salaries or wages into an account that it to be used for the purpose of healthcare costs when necessary. Employers often choose to contribute a set percentage to these accounts as well. The exact requirements of HSA’s are typically decided by compensation managers and top management.
One of the most important areas of business involves compensating employees for the work they perform for their employers. Compensation and benefits management is that area of business that determines the best way to do this, and the most common tasks of managers in this area of business are described above.