The Manager’s Guide to Rewards: What You Need to Know to Get the Best for—and from—Your Employees

Chapter 9. The Hidden Value of Benefits

LONG TAKEN FOR GRANTED, the amount that an organization invests in its benefits programs is getting renewed attention. In fact, many CEOs and HR leaders rank rising benefits costs as one of their biggest concerns today. On average, General Motors spends about $1,360 per car on health-care benefits and pensions—more than it spends per car for steel!^[1] All industry sectors are feeling the hit: Starbucks Chairman and Chief Global Strategist Howard Schultz told analysts that in the next two years, Starbucks will spend more on employee health care than it does on coffee beans.^[2] Between 25 and 30 percent of an employee’s total remuneration may likely be in benefits, not cash.

With such a big investment at stake, ...