Benefits - New Trends In Employee Benefits

One clear trend in benefits is their tendency to expand over time in periods of economic growth. This graph shows participation rates by full-time employees in 12 so-called non-core benefit plans. Non-core plans are those offered in addition to a standard "package." Historical patterns indicate that, as these non-core benefits become more and more popular, they "graduate" into the standard benefit package.

On average, employees of medium-to-large enterprises (100+ employees) are 3 times more likely to be offered a set of these non-core benefits than are employees of small enterprises (1 to 99 employees).

As more companies offer these plans, institutions tend to arise that make the administration of such programs less burdensome to the employer. Then they come into the range of the smaller firms as well.

In addition to the plans shown above, other plans are offered, but comprehensive data on these are not being collected yet, and statistical tracking is therefore difficult.

Indicators about newly emerging benefits are available. For example, health care insurance is frequently offered to the employee and his/her family members. That's pretty standard. But the definition of "family" for this purpose is changing. Same-sex partners as well as the opposite sex but unmarried partners of employees are now sometimes included in plans that cover family members. According to the Human Rights Campaign, the extension of domestic partner benefits by Fortune 500 companies more than doubled in recent years — from 61 companies in 1998 to 145 companies in 2001.

The extension of health care benefits to same-sex partners is, according to an annual survey conducted by Mercer/Foster Higgins, even more widely exercised in small firms (10-499 workers) than in large firms (500+ workers). In 1999 they report that 16% of small firms offered same-sex partner benefits while only 11% of large firms offered the same.

This finding shows that small firms are sometimes quicker to implement new benefits than are large firms. Because small firms, as defined in the Mercer/Foster Higgins study, include enterprises that employ 10 to 499 workers, findings exclude the very small firms that have between 1 and 9 workers. These firms have significantly lower benefit offerings.

Over the five-year period, 1997 to 2001, all of the following benefit types experienced increased usage, according to the Society of Human Resource Managers.

… Paid time-off plans

… Domestic partner benefits

… Flexible scheduling

… Flexible spending accounts

… Retirement and financial planning assistance

1997 to 2001 was a period of healthy economic growth. In such times benefit plans proliferate. Economic downturns cause such benefits to wither. In a depressed economy, the job itself is the benefit.

Over time, the demographic makeup of a workforce changes. As it does, so too do employment benefit packages. Although the pace of change is hard to forecast, benefit plans will change to reflect the needs of the workforce. Family-related benefits present a dramatic area of change. We look at "family leave" in the next panel.

Sources: U.S. Department of Labor. Bureau of Labor Statistics. Employee Benefits in Small Private Establishments, 1996. Tables 1 and 3; Employee Benefits in Medium & Large Private Establishments, 1997, Tables 1 and 3. Human Rights Campaign. Report on Number of Employers Offering Domestic Partner Benefits. Online. Available: http://www.hrc.org/newsreleases/2001/index.asp. Carrey, Anne and Frank Pompa. USA TODAY, 10 August, 2000, page B1. Society for Human Resource Management. Summary of SHRM 2001 Benefits Survey. Online. Available: http://www.shrm.org/hrnews/articles/default.asp?page=041801b.htm