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Saving on health-care costs is an important financial goal for many CPA firms now grappling with annual increases that could reach 12% to 15% this year. The best way to cope: Make sure your firm's long-range planning meshes with its strategy and goals, says employee benefits consultant Gary Kushner, president and founder of Kushner & Co. (Kalamazoo, Mich.; www. kushnerco.com). His presentation at the Society for Human Resource Management's annual conference in San Francisco provided these useful questions for CPA firms to ask:
Why are the firm's benefits structured the way they are? Do your programs make sense in terms of cost and attractiveness to employees? Think about your AD&D (accidental death and disability) plan, for example. "This is the benefit that if you die correctly, your beneficiary collects twice as much as if you die incorrectly," Kushner quips. "In most organizations today, benefits and HR are tied in to the goal of recruiting and retention. Do you think employees leave or stay because you have a good AD&D plan? I'm not suggesting eliminating AD&D plans, but they're easy pickings when talking about strategic alignment."
Look at vacation benefits as well. While most firms give more time off to staff who have been there longer, if your firm has a lot of turnover in the three-to-- five- year range, you may conclude that the policy needs revamping. "If you want to recruit 20-year-olds and reduce your benefits costs, drop all your health, welfare, and retirement plans and give away an extra week of vacation immediately in the first year," Kushner says. "You'll have a recruiting advantage like you've never seen before!"
Another program to reconsider: In the U.S. from the 1920s to the early 1970s, it was common compensation practice to give raises to employees who got married. While this seems archaic, some employers are still giving that pay raise through what they call their family health-care subsidy. "You have a 1930s vestige compensation program built into your benefits subsidy. How can you justify paying one employee $5,000 a year more than his or her coworkers because the person got married, especially when you're thinking about aligning strategy with organizational goals and objectives?"
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