Rising Benefits Costs

RisingBenefits Costs

Employees highly consider benefits offered to them when choosing thebest among several employers. Employee benefits are so substantialthat one may forego a large multinational corporation for a smallfirm simply because the latter has higher benefits than the former.To attract and retain highly qualified and skilled personnel,organizations seek to increase employee benefits (Martocchio, 2013).Their increment is, however, becoming a challenge to many of theemployers due to the rising costs.

The rise in benefits costs is propelled by various factors includingincreased health costs as a result of new and expensive drugs in themarket and increasing aging population that is continually utilizingtheir health benefits (Mathis et al., 2016). The increasingcosts are a major challenge to the majority of employers who seek tomake themselves appealing to employees through large employeebenefits.

Since employee benefits remain to be the most suitable way to attractand retain highly qualified employees, the organization should notreduce them but should instead manage them in an effective manner.One of the main ways through which rising cost of benefits can bemanaged is through getting a benefits package that is specificallytailored for the industry. Benefits packages are notone-size-fits-all. Some are more suitable in some industries than inothers. The organization can also make considerable attempts tocontrol employee costs by encouraging consumerism hence helping themto save ((Martocchio, 2013)). This is a good retention strategy.Utilizing technology to monitor administrative costs ensures that theorganization does not exceed the budgeted costs. Moreover, theorganization can adopt a ‘prevention’ rather than ‘cure’strategy by promoting health and wellness programs.

In a nutshell, the rising benefits costs have influenced theemployer’s employee attraction and retention strategy adversely.It, however, follows that all is not lost since employers can adoptvarious ways to manage these rising costs.

References

Martocchio, J. (2013). Employee benefits. McGraw-Hill HigherEducation.

Mathis, R. L., Jackson, J. H., Valentine, S. R., &amp Meglich, P.(2016). Human resource management. Nelson Education.