COMP NEWS – Workers across industries are relishing an era of rising wages. But many of those newly earned hard cash benefits are coming at the expense of noncash benefits, according to data from Glassdoor.
Workers may have rejoiced over big pay raises in the past two years, but the downside is they’re losing noncash company benefits, according to job and recruiting site Glassdoor.
In 2023, the top three benefit cuts were in mobile phone discounts, charitable gift matching and tuition assistance, Glassdoor said. Companies are looking for ways to cut costs to pay for huge wage hikes doled out to attract and retain workers and elevated inflation over the past few years. And with the economy slowing and competition easing for workers, companies are doubling down on trimming fat in 2024, Glassdoor said.
As companies pare back benefits, Americans will have to pick up the tab.
“A lot of these smaller benefits add up to an important part of household budgets,” said Aaron Terrazas, Glassdoor chief economist. “It’s another weight on consumer spending going into next year.”
Companies who pay hire wages may offset their compensation costs by simply scheduling fewer hours or slashing benefits.
Companies typically first cut hours worked (for nonsalaried workers), equity and incentive-based compensation, company contributions to the cost burden of benefits like health insurance or 401(k) retirement plans, salaries for new employees and pay raises for current employees, experts said.
Companies also turn to benefits such as:
- Dental insurance.
- Tuition assistance, possibly amid “more public (government) forgiveness,” Terrazas said.
- Commuter assistance, which can be more than just the monthly bus pass. “A company can spend an incredible amount of money on a fleet of vehicles, which represents a major personal benefit to their employees,” said Phillip Hulme, founder of Atlanta-based Stars & Stripes Financial Advisors. “Taking that away can make for a mini-financial crisis if the employee is not prepared.”
- Gym memberships.
- Mobile phone discounts.
- Meals, snacks and coffee.
To read more about how employers are planning to compensate their workers in 2024, click here.
For more Comp News, see our recent posts.
Comp News is brought to you by CompXL, the flexible compensation software provider that enables mid- to large-size organizations to implement competitive pay structures such as vested stock options and variable incentive pay.
