Paycheck Takes Priority Over Employee Benefits

By RICHARD BREEDEN
Staff Reporter of The Wall Street Journal.

From The Wall Street Journal Online

Benefits can make a big difference in any compensation package, but small-business owners certainly believe it's the paycheck that counts the most.

In a June survey conducted by the National Federation of Independent Business, nearly three-quarters of the businesses polled said that if they were to increase employee compensation by the equivalent of $1 an hour, it would be in the form of wages or salary. The closest runner-up was paid time off at just 5.2%, with health-insurance benefits at 4.7%. Only 2.4% said pension benefits would be the likely area to be increased.

The choice by the great majority of owners of a wage or salary boost mirrors what they believe is most important to their employees. When asked in what form their employees would most likely want to see an additional $1 in compensation, 82% said workers would pick wages or salary and only 4% said health benefits would be the choice. Less than 1% of company owners believe their employees would want their compensation increase in pension benefits. Some other benefit, such as paid parking, was what 5.8% of the owners thought workers would prefer.

One-third of the businesses surveyed pay workers by the hour, with 23% having only salaried employees, 7% commissioned including tips, and 27% a mix. Only 7.7% have no full-time staff. In benefits, the most common is paid vacation, offered by 75% of the companies polled, with dental insurance the least common at 24%.

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