Auxillium West continuously monitors, among other things, trends in employee
compensation and benefits. The following is an update on some of the changes we
have seen in the past year.
Competition continued to keep health cost increases low in 1997.
Competition among health care providers have allowed the preferred provider
networks to negotiate some very low rates. Almost all employer-sponsored health
care plans belong to a preferred provider network in order to benefit from the
lower rates. Dental Preferred Provider Networks grew significantly in the past
year.
Baby boomers are placing more interest in retirement, and companies have
responded by enhancing their 401(k) plans. The average employer maximum match
is up to approximately 3.8%. The vesting period has shortened to an average of
3.3 years (a short vesting period is important for attracting an applicant who
may be fully vested with their current employer). Daily valuations, frequent
reporting and a broad set of investment options are also the norm.
Companies have also enhanced paid time off benefits. This is in response to
employee quality of life concerns. From the company point of view, the cost of
paid time off is mitigated by the long uncompensated (exempt employees only)
hours employees often work just before and just after paid time off (e.g.
vacation).
Average vacation time increased, especially for new hires, to an average of
just under 11 days. Average sick leave increased to 9 days. More companies are
offering short term disability plans (over 70%).
The number of 401(k) plans offering daily valuations once again increased.
Daily valuations allow participants to monitor and change their fund balances on
a daily basis. Now over 80% of plans offer daily valuations.
Maximum company matching contributions and employee participation are up, to
approximately 3.8% and 80%, respectively.
The average number of years of service required for full vesting dropped to
3.3 years.
EAP's continue to grow in popularity. Now more than 80% of
companies offer a plan. EAP's provide basic counseling services to employees and
family members. Approximately 9% of employees utilize this service each year.
Average vacation time increased, especially for new hires, to an average of
just under 11 days. Average sick leave increased to 9 days. More companies are
offering short term disability plans (over 70%).
