Preparing A Benefits Statement

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.

communenvelp 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
   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
             

Gases and Welding Distributors Association