Cafeteria Benefits Program

Introduction

The importance of Cafeteria Benefits program in USA is quite high. With so many impediments to relocation, today, from traditional issues such as spouse career concerns to more recent problems such as “upside down” homes, companies, employers and relocation management companies are clamoring for a more creative, flexible approach. Without creativity and flexibility, many moves quietly will not happen. This is where “cafeteria”-style relocation benefits come. A cafeteria approach can help meet employees' needs for flexibility, control overall program costs, and most importantly, enable companies to achieve their business objectives in a challenging environment. Cafeteria relocation benefits had a flash of popularity in the 1980s and 1990s but faded from the spotlight as more structured, tiered polices gained favor. All the issues related to Cafeteria Benefits Program will be discussed in detail.

The Rise of food Policies

The recent Worldwide ERC® survey, Relocation Assistance: Transferred Employees estimates that 73 percent of U.S. organizations use tiered policies, compared to only 10 percent in 1988. Yet even the most carefully considered tiered policies will not necessarily meet the needs of today's highly diverse workforce. If a company holds rigidly to benefits as defined in the tiers, it will control costs, but it runs the risk of alienating its existing talent pool and potential new hires. On the other hand, if a company is too flexible in its tiered policy administration, exceptions become the rule rather than the exception, benefits become inequitable, and, costs can spiral (Coffin, 107).

Cafeteria Approach Gains Popularity

Many of today's cafeteria plans are hybrid programs, the structure and logic of tiered policies with a flexible cafeteria element built into each tier. Like pure tiered policies, a hybrid tiered program allows companies to segment overall benefit levels and expenses by job description, salary range and other psychological factors. However, by allowing an element of choice and personalization within those tiers, the hybrid program builds in flexibility and minimizes costly exceptions. Such a hybrid model can increase employee satisfaction and acceptance rates and give the company a leg up in recruiting and retaining talent.

Key factor is Flexibility

For most companies using a cafeteria approach, whether as a stand-alone program or integrated into their tiered program, flexibility is the most compelling feature. As employee real estate and family needs become more complex, corporate relocation managers administering a traditional tiered program can find them inundated with exception requests. The hybrid approach allows a more direct and personalized alignment of benefits and needs (Cook, 154).

Hybrid Policy Options

In a hybrid program, each policy tier would include a list of policy options that can be matched to the transferee's requirements. According to Worldwide ERC's Guide for Managing the Mobile Workforce, these might include:

1.Home finding trips

2.Travel Route

3.Temporary living

4.Shipment of household goods, autos and pets

5.Home purchase assistance

6.Home sale assistance

7.Spouse career transition assistance

8.Mortgage assistance

9.Child/elder care assistance

10.Miscellaneous allowance (Curtin, 146).

The inclusion of payrolls to a deduction system

The integrity of the payroll system is of absolute importance for the smooth running of any organization. A payroll ...