|By O'Dea, Colleen|
Businesses continue to move away from costly and unpredictable defined benefit retirement plans and shift more costs for health insurance coverage onto employees. Employers have added little under the benefits umbrella - most often wellness programs and flexible schedules - in part because they still can't afford to, but also because most have not needed to do so.
"While some are bolstering benefits to maintain competitiveness, most don't need to," says
Several experts say that five years after the official end of the recession, employers have not needed to boost benefits to attract workers because there are still so many unemployed who are just happy to be getting a salary and can't afford to turn down a job because the benefits are not generous enough.
Workers have lost benefits since the start of the economic downturn in 2007, says
"Benefits were cut back," he says. "Employers did anything they could to save a little money, in part so they didn't have to fire people."
"It's going to be the unusual employer doing extremely well who's going to restore things," says
With the current economic recovery still somewhat fragile and the cost of benefits such as health insurance rising, many companies continue to be cautious with spending.
"Everywhere, employers are looking to pare back costs," says
Still, depending on the job and the industry, the full package of benefits today has pretty much the same components as in the past. Some level of health and retirement plans and vacation and sick days are nearly universal. Also often in the mix are some combination of stock options, life and disability insurance, flex time, tuition and day care subsidies, severance packages and wellness plans.
The greatest trend in benefits is the continuing shift of costs both for retirement and for healthcare to employees. In the case of retirement plans, employers are continuing to move away from defined benefit retirement plans by freezing payments for existing workers and closing enrollment in such plans for new employees. Instead, they are moving workers into 401(k)s and similar accounts.
"The whole world has shifted to defined contribution plans," says
Karas says larger employers are embracing KSOP plans because the companies do not have to put up cash to match an employee's contributions and the stock it uses as a match instead gives an employee a stake in the company.
A similar cost shift is occurring with health plans. The trend over the last several years has been toward requiring employees to make greater contributions toward insurance or meet higher copays, or a combination. But it's still unclear how the federal Affordable Care Act is going to affect employee health insurance.