National Employee Benefits Day is tomorrow. But it’s not a cause of celebration for many. Coverage of health insurance and retirement security are becoming more worrisome issues for both employers and employees in small businesses than ever before.
Last week’s release of the 2008 Employee Benefits study by the U.S. Chamber of Commerce found that small businesses saw the cost of providing certain benefits rise dramatically from 2006 to 2007, the latest available data period. Health insurance costs rose 15%, averaging $4,559 per employee in 2007 from $3,961 in 2006. Costs for retirement and savings benefits jumped 14%, from $2,356 per employee to $2,694.
The report also showed that employers began scaling back on employee benefits as the economy slowed down in 2007, even before last fall’s economic tailspin partly unleashed by the constriction of the credit markets. The average dollar amount of employee benefits fell 14% to $18,496 in 2007 from $21,527 the year before. It will be interesting to see if next year’s data will show the continuation of benefit cutbacks during 2008. (The data came from 2007 payroll expenditures of a cross-section of more than 250 companies of various sizes, industries and geographic regions, according to the Chamber.)
Tomorrow, the International Foundation of Employee Benefit Plans, based in Brookfield, Wisc., is holding two free video presentations that will feature retirement and economic experts discussing how the current economy will affect the future of retirement security.
“Given the economic downturn, I think employers need to think about one key factor – assume this economic recession is going to go on for two to three years,” says Dallas Salisbury, president of Washington-based Employee Benefit Research Institute, in a statement. “This will allow employers and workers to be the best prepared for whatever lies ahead.”
Readers, have you scaled back on providing employee benefits to your workers?Is that permanent or temporary?
Photo: Associated Press
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