Benefits: Employers’ greatest pricing pressure

A survey conducted by Grant Thornton reveals that employee benefits rank at the top of employer cost control concerns.  According to the survey, “A vast majority (84%) cited employee benefits (e.g., health care, pensions) as their greatest pricing pressure — up from 68% six months earlier.”

In response, about one-third of employers plan to cut employee health benefits.  The good news is that more employers are planning to increase health benefits compared to March 2010.

Most economists believe that employers view health insurance as a cost just like salary. Thus, the downside of increasing health insurance benefits is that salary increases would not be as high as they would with a smaller increase in employee benefits.