small change toward a rich life

Cutting benefits to lure employees?

Hope you had a fun Fourth! Jak and I spent the holiday weekend visiting his sister and her husband in Eugene, Oregon. We watched fireworks from a boat and played laser tag.

My in-laws (I sometimes call them ‘out-laws’, since Jak and I aren’t married) own an auto shop in Eugene. Business is booming, but they’re having a terrible time hiring and keeping skilled employees. In order to become more competitive, Bill and Jacqueline are about to cancel their employee benefits.

“Isn’t that backwards?” I asked, astonished. Not, apparently, when the employees don’t place any value on the benefits. “All they see is the dollar-per-hour amount,” explained Bill. Given a choice between $15 per hour at another shop and $14 per hour plus health insurance worth $3 per hour more … their technicians will take the extra dollar up front.

It’s a painful decision for Bill and JQ, because part of their dream for this business was of creating a better sort of working environment than is typical for blue-collar jobs. Besides health insurance, they do things for their staff like holiday dinners and bonuses. But no more — they’re cutting everything extraneous so that they can offer a higher hourly wage.

The losers in this scenario will of course be the technicians. BE YE NOT SO STUPID. If your employer, especially a small-business employer, provides you with decent health insurance or a medical savings account or a 401(k) plan, thank your lucky stars. And at least look up what it would cost you to purchase separate insurance coverage before you run off chasing a no-benefits job.


2 responses

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  1. Beth says

    Generally I’d agree with that, though the specific insurance makes a difference too.

    My employer is small and provides 100% paid insurance. This seemed like a great deal up front, especially because yes, that’s my whole family covered.

    The problem is that the plan is a state-based Blue Cross Blue Shield PPO. Since I don’t live in the same state as my employer/where the plan is based, that automatically puts a lot of the specialists out of the preferred doctor net. They’re not strictly speaking, out of network, so we do have choices for PCPs and they take the insurance just like regular BCBS or if it were PA-based BCBS.

    The issue is those specialists and our needs for our autistic son. There’s also no vision coverage and only ‘special’ dental. Routine visits aren’t covered, but because my salary is also so much lower, we can’t afford supplemental insurance.

    So there have been times when I’ve wanted the value of that insurance back as salary instead, especially since Sabs went back to work in tech and has an insurance plan with better coverage.

  2. karawynn says

    My mini-rant was against people who don’t value health insurance benefits at all … which you clearly do! For most people, health insurance works out to be more valuable than a comparable cash amount, but of course there are certain special situations where that won’t be true.

    Unfortunately, as I understand it, there’s no way to let the employees pick and choose — they are required by law to offer identical benefits to all of their employees.

    Couple of years ago I met a guy — a friend of a friend — who quit a job that he loved to take a Microsoft position that he doesn’t even like. Because his son was born autistic and Microsoft is the only company in the area (and reportedly one of the only, period) that provides full health benefits for autistic children.

    I am in awe of the level of personal sacrifice required to raise a special-needs kid. You have all my sympathy and best wishes.

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