BW Online | September 20, 2000 | Benefit Benchmarks

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SEPTEMBER 20, 2000

STAFF & BENEFITS

Benefit Benchmarks
Ever wonder what makes up a "typical" small-business package? Take a look

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What Benefits Cost:
A Detailed Breakdown

What Benefits Cost:
By Industry and Occupation

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What benefits should you offer to attract top talent? It largely depends on an individual employee's situation, say consultants. A 25-year-old Webmaster will want different things (cash instead of fringe benefits, tuition reimbursement over a pension plan) than a middle-aged manager with three kids (who's more likely to want extra time off, child care, and dependent savings accounts). A 60-year old will be focused on retirement and health benefits.

Still, you'll find some common denominators, according to a U.S. Labor Dept. study, Employer Costs for Employee Compensation. Released in June, the report, which is based on data up to March, 2000, examined benefits offered to employees of small businesses as well as the costs. Chances are that your rivals will be offering packages similar to those outlined in the study and that such benefits are what employees will be seeking.

Not surprisingly, benefits are a big part of the total compensation package. A good rule of thumb: Approximately 25 cents of every dollar you spend on employee compensation will go to benefits. The compensation offered and the costs vary by industry, occupational group, region, and whether employees work full-time or part-time.

But on average, enterprises with fewer than 100 employees offer pay of $12.95 an hour and total compensation packages of $17.16. The lion's share of the $4.21 an hour that's spent on benefits at the smallest companies goes to Uncle Sam -- $1.53, or 11.8%, for such legally required benefits as Social Security, federal and state unemployment insurance, and workers' compensation. By comparison, 92 cents an hour (7.1% of total compensation) goes for vacation and other paid leave; 47 cents (3.6%) for supplemental pay such as bonuses; 89 cents (6.9%) for health, disability, and other types of insurance (excluding unemployment); and 40 cents (3.1%) for retirement and other savings.