Employee Benefits Survey:
Compensation Revisited
by:
Carola Cowan , Economist
"Total compensation is made up of 79.0 percent wages and salaries and 21.0 percent benefits."
T
he Employee Benefits Survey
found that the amount and type of benefits employees receive depend on industry, company
size, geographic location and whether the employees work full-time or part-time. Last
year, the Research & Planning (R&P) Section of the Wyoming Department of Employment
conducted an employee benefits survey on a pilot basis.
1 This year, R&P redesigned the survey, to collect information on a
quarterly basis and to eventually identify trends in benefit costs. This article
reports data for the first quarter 2000 only. The first quarter’s overall sample size
creates limitations for estimates that will be overcome when all four quarters of data
are available. At that time, we should have more comprehensive findings, based on
approximately 1,000 employers reporting. Thanks to the 237 employers who participated
in the first quarterly survey and helped us make it a success!
This survey complements the wage survey R&P conducts on an annual basis and assists
employers and employees in determining whether they are providing and receiving
competitive compensation (wages and benefits).2
Benefits such as health insurance, paid leave and a retirement plan can be a large part
of an employee’s compensation package and employers' costs, and have gained importance
in recent years. Therefore, wage information alone does not give the full picture of
the total compensation value. It also makes it difficult to make meaningful comparisons
between different jobs, since receiving a smaller wage may very well be offset by a more
generous benefits package.
Results
Table 1 shows the percent of Wyoming companies providing selected
benefits to their employees. The top five benefits offered by companies for full-time
employees were paid vacation, health insurance, paid holiday leave, dependent health
insurance and paid jury duty leave. For part-time employees, a Christmas bonus was the
most common benefit followed by paid jury duty leave, employee discount, retirement plan
and paid vacation. The benefits offered the least for both employee categories were
child care, paid maternity leave and paid paternity leave. For example, 82.2 percent
of companies reported they offered paid vacation to their full-time employees, but only
5.7 percent stated they offered paid maternity leave to these same employees. In last
year’s survey, health insurance was also in the top five benefits provided and maternity
leave, paternity leave and child care ranked on the bottom. Of the companies responding,
only 6.2 percent did not provide any kind of benefits to full-time employees and 18.1
percent did not provide any kind of benefits to part-time employees.
Analyzing benefits paid by companies to employees by industry reveals that employers in
Public Administration and Finance, Insurance, & Real Estate (FIRE) were the most
likely to pay benefits. Employers in Construction and Retail Trade were the least
likely to provide benefits (see Table 2). For example, 100
percent of companies in Public Administration offered paid holidays to full-time
employees, but only 9.5 percent of companies in Construction offered this benefit to
their full-time employees. Last year’s analysis showed that employees in Public
Administration and Mining were the most likely to receive benefits and employers in
Agriculture and Retail Trade were the least likely to provide benefits.
A look at benefits and firm size shows a significant correlation between the two. For
full-time employees, the correlation was significant in all areas except for maternity
and paternity leave, child care, employee discounts and tool allowance. For part-time
employees, the correlation was significant for paid holidays, paid funeral and bereavement
leave, paid jury duty leave, health insurance, dependent health insurance, dental plan,
life insurance, retirement plan and wellness program. Companies with 100 or more employees
all offered health insurance to their full-time employees. In contrast, only 27.3 percent
of part-time employees working for a company that size received this benefit (see
Table 3). We found the same correlation in last year’s benefit
survey.
The regional analysis (see Map for regions) shows no strong
correlation between the region and the benefits paid. Though overall, we can conclude
that full-time employees who worked for companies located statewide or in the Southwest
were more likely to receive benefits.3 For example,
86.8 percent of statewide companies offer health insurance to full-time employees
compared to the Southwest (77.5%), Central (73.3%), Northeast (72.4%), Southeast
(70.0%) and Northwest (63.2%) regions (see Table 4). This
may be partially explained by the fact that almost half of the companies that are
located statewide have 100 or more employees. There were also more companies with
more than 100 employees located in the Southwest region than in other regions. As
seen earlier, larger companies are more likely to provide benefits. Comparisons to
last year cannot be made, since we did not analyze the data by region.
Another way to distinguish between the frequency of benefits offered is by full-time
or part-time status. Not surprisingly, full-time employees were much more likely to
receive benefits than are part-time employees. For example, 73.5 percent of companies
gave full-time employees paid holidays, but only 16.8 percent of companies gave paid
holidays to part-time employees (see Table 1).
How much paid time off companies gave their employees also depends on full-time or
part-time status, with full-time employees receiving an average 12 days of paid sick
leave a year, while part-time employees received only half that number (see
Table 5).
What percentage of benefit costs did employers pay? Here the dependence on the
full-time and part-time status of the employee is less important. Most commonly,
for health insurance and dental plans, 100 percent of benefits were paid by the
employer. If we look at the average percentage paid by the employer for health
insurance and dental plans, part-time employees got slightly less than full-time
employees (see Table 6).
How much did employers spend on benefits as a percentage of total compensation? Our
survey shows that 21.0 percent of total compensation went to paying benefits. This
is close to the estimated amount of 21.4 percent in South Dakota, but lower than the
27.5 percent the Bureau of Labor Statistics reported
for the United States as a whole.4 In our survey,
employers broke out compensation by wages and salaries, costs for retirement plans,
legally required benefits such as Social Security and Worker’s Compensation and all
other benefits. Figure 1 illustrates the breakout by percentage
of total compensation for these different benefit groups.
Data Collection
A stratified random sample of 400 companies was selected to receive this survey. The
sample was drawn from the Quarterly Unemployment Insurance (QUI) employer database for
the second quarter 1999. This database contains the data reported by employers on a
quarterly basis for Unemployment Insurance purposes. Companies that reported zero
employees for all three months were excluded from the database and not included in
our sample. To the remaining database of 15,601, we added the following data fields:
average employment, class size, industry by major division and region. We then
selected a random sample stratified by class size, industry and region.
Overall, 59.3 percent of the companies surveyed responded. In order to test the
consistency of the distribution by class size, industry and region of our responses
with the distribution of our sample, we ran a chi-square test. The significance of
the chi-square value was .899 by class size, .780 by industry and .502 by region.
Therefore, the likelihood is high that our distribution matches the overall distribution
by class size, industry and region.
Conclusion
Although the small sample size creates limitations, we determined that companies were
more likely to provide benefits to full-time employees than to part-time employees.
The larger the company, the more likely it is to offer benefits to its employees. There
was also a relationship between benefits and industry. A higher percentage of employers
in Public Administration and FIRE offered benefits than other industries. Construction
and Retail Trade offered the fewest benefits to their employees. The regional analysis
showed that employers with locations statewide or companies located in the Southeast were
more likely to pay benefits. In Wyoming, total compensation was made up of 79.0 percent
wages and salaries and 21.0 percent benefits.
Overall, the redesigned version of the Employer Benefits Survey was successful. Watch
for survey updates in future Trends.
1 Employee Benefits Survey: A Pilot
Study for Wyoming, Research & Planning, Wyoming Department of Employment, July 1999.
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These pages designed by Gayle
C. Edlin.
2 Wyoming Wage Survey, Research &
Planning, Wyoming Department of Employment, January 2000.
3 Statewide refers to companies that have locations in more than one
county.
4 Laura Goehring, “How Valuable are South Dakota Employees’
Benefits,” South Dakota Labor Bulletin,
September 1999;
Bureau of Labor Statistics, “Employer Costs for Employee Compensation-March 1999,”
News Release,
June 24,
1999.
Last modified on
by
Valerie A. Davis.