A formal printout can go a long way toward educating employees about benefits.
Employee retention is a major concern for all gases and welding distributors. Most companies offer benefits packages—salary plus varying degrees of health insurance, retirement plans and stock options—as incentives for workers. But what is the best method to communicate to employees exactly what the company offers? Most people don’t realize what their benefits are until they’re needed, whether that be health insurance or retirement. Distributing a formal Statement of Benefits to employees has several advantages.
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It’s a Communication Tool. By clearly illustrating the extra costs above and beyond salary, the Benefits Statement can help manage the disconnect between employees and management. Distributors typically bill out their time to customers through service technicians, and employees often do not understand where the extra money goes. “Perhaps they get paid $20 per hour but we bill their time out at $80 an hour,” says one distributor. “Many employees see that and think that management is cleaning up by gouging the customer. They don’t think about the van, the fringe benefits or the infrastructure it takes to support their efforts. The Benefits Statement doesn’t solve that miscommunication, but it does address part of it.” |
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It’s a Retention Tool. For every dollar of salary, the company is spending x percent more on benefits. Employees need to put that in context when they’re evaluating their opportunities. The Benefits Statement is an easy way to explain what a three to four percent raise translates to in extra year-end cash, retirement, insurance and other benefits. |
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It’s a Recruiting Tool. Using a Benefits Statements as a way to attract talent would not be a bad idea for a small company with no prepared recruiting brochure. It could make a good way to communicate all the different benefits you have, though you’d have to use a generic sample that didn’t have too many dollars in it. |
Regardless of how you choose to use a Benefits Statement, keep in mind that presentation and delivery are critical. It has to look credible and must be easy to understand. Some companies send out a statement once a year, with a formal letter and computer printout. It notes the employee’s base salary and other benefits, including cost of training the employee received. In sum, a Benefits Statement helps employees to realize that your company is a pretty good place to work.
GAWDA Distributors And Employee Benefits
GAWDA’s 2006 Employee Compensation Report provides information on both executive and employee compensation. Below are the results of the survey covering Benefits for Employees.
| Typical U.S. Distributor |
Typical GAWDA Distributor |
Sales Under $10 Million |
Sales $10-$20 Million |
Sales Over $20 Million |
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| HEALTH CARE | ||||||
| Offer Cafeteria Plan | 64% | 57% | 50% | 50% | 73% | |
| Offer Health Benefits | 98% | 100% | 100% | 100% | 100% | |
| Medical/Hospitalization Plans | ||||||
| Traditional (indemnity) | 21% | 22% | 19% | 38% | 13% | |
| Traditional HMO | 32 | 33 | 31 | 38 | 33 | |
| Point of Service HMO | 16 | 19 | 19 | 8 | 27 | |
| Preferred Provider | 71 | 80 | 77 | 69 | 93 | |
| Exclusive Provider | 5 | 6 | 8 | 8 | 0 | |
| Employer Paid Percentage | ||||||
| Traditional (indemnity) | 70% | 54% | 0% | 59% | N/A% | |
| Traditional HMO | 75 | 75 | 75 | 80 | 75 | |
| Point of Service HMO | 70 | 79 | 80 | N/A | 79 | |
| Preferred Provider | 75 | 80 | 88 | 85 | 77 | |
| Exclusive Provider | 0 | N/A | N/A | N/A | N/A | |
| Other Health Benefits | ||||||
| Dependent Coverage | 87% | 93% | 88% | 92% | 100% | |
| Dental Plan | 77 | 78 | 69 | 85 | 87 | |
| Vision/Optical Plan | 42 | 41 | 31 | 38 | 60 | |
| Retiree Medical Insurance | 8 | 9 | 12 | 8 | 7 | |
| Prescription Drug Plan | 84 | 85 | 85 | 69 | 100 | |
| Group Term Life Insurance | 79 | 87 | 77 | 92 | 100 | |
| Long-Term Disability Insurance | 61 | 56 | 38 | 46 | 93 | |
| Short-Term Disability Insurance | 58 | 57 | 50 | 62 | 67 | |
| Employer Paid Percentage | ||||||
| Dependent Coverage | 58% | 63% | 70% | 59% | 65% | |
| Dental Plan | 50 | 65 | 40 | 80 | 78 | |
| Vision/Optical Plan | 62 | 60 | 13 | 70 | 79 | |
| Retiree Medical Insurance | 0 | 0 | N/A | N/A | N/A | |
| Prescription Drug Plan | 75 | 75 | 75 | 73 | 75 | |
| Group Term Life Insurance | 100 | 100 | 100 | 100 | 100 | |
| Long-Term Disability Insurance | 100 | 100 | 90 | 100 | 100 | |
| Short-Term Disability Insurance | 100 | 100 | 88 | 55 | 100 | |
| RETIREMENT | ||||||
| Offer Retirement Plan | 93% | 100% | 100% | 100% | 100% | |
| Retirement Plans Available | ||||||
| 401(k) | 86% | 89% | 85% | 92% | 93% | |
| Profit Sharing Plan | 47 | 50 | 58 | 62 | 27 | |
| Payroll Deduction/SEP/SIMPLE IRA | 14 | 6 | 8 | 8 | 0 | |
| Defined Benefit Plan | 5 | 6 | 8 | 0 | 7 | |
| Money Purchase Plan | 1 | 2 | 0 | 8 | 0 | |
| OTHER BENEFITS | ||||||
| Flexible Spending Accounts | ||||||
| Health Care | 42% | 43% | 31% | 31% | 73% | |
| Dependent Care | 39 | 43 | 31 | 31 | 73 | |
| Adoption Assistance | 5 | 9 | 4 | 8 | 20 | |
| Child Care (allowance/facilities) | 7 | 9 | 12 | 8 | 7 | |
| Flexible Work Scheduling | 39 | 41 | 31 | 46 | 53 | |
| Educational Assistance | 38 | 50 | 35 | 62 | 67 | |
| Pre-Retirement Counseling | 8 | 6 | 0 | 0 | 20 | |
| Union Representation | 11 | 23 | 12 | 31 | 33 | |
| Employee Time Off | ||||||
| 1 Week Paid Vacation | 1% | 1% | 1% | 1% | 1% | |
| 2 Weeks | 2 | 2 | 2 | 2 | 1 | |
| 3 Weeks | 8 | 8 | 10 | 8 | 6 | |
| 4 Weeks | 15 | 15 | 20 | 14 | 15 | |
| Paid Parental Leave | 14 | 19 | 15 | 15 | 27 | |
