Issue: It's more important than ever to know if you're budgeting too much, too little or the right amount for.
Risk: By ignoring industry benchmarks, you could be wasting money on unwanted perks.
Action: Compare your benefit spending to the averages below. Use the numbers as justifications to reallocate benefit dollars.
Is your company paying out too much (or too little) in employee benefits? Now's a good time to find out.
Recent Labor Department numbers show that benefit costs for American employees rose rapidly over the past year. During the 12 months ending this summer, benefit costs jumped 7.2 percent, reflecting the biggest one-year gain since early 1990.
What's leading the charge? What else. Employer health insurance premiums climbed 11.2 percent in 2004, registering the fourth consecutive double-digit annual increase, according to a new Kaiser Family Foundation survey.
With benefits eating up a bigger chunk of your expenses, it's wise to track them as a percentage of your total compensation costs. Compare those numbers to other companies of your same size.
Current costs. U.S. organizations with 1 to 49 employees now pay an average of $19.37 per hour in total compensation (wages and benefits) to their employees. Of that amount, $4.86 per hour (or 25.1 percent) goes toward benefits, says the Bureau of Labor Statistics.
In comparison, organizations with more than 100 employees pay an average of $27.81 per hour per worker in total compensation. And $8.59 per hour (or 30.9 percent) goes toward benefits.
The smallest organizations forked over $1.06 per hour per employee (or 5.5 percent of total compensation) for health insurance, compared to $1.70 and 7.1 percent for midsize companies (100 to 500 employees). The largest organizations (500 or more employees) paid $2.37 per hour per employee for health insurance (7.3 percent of total compensation).
On average, unionized employers put a greater amount of total compensation toward employee benefits.
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