How to Offer Your Temps Benefits - For Free

I once had an employer that offered benefits on an entirely cafeteria-style basis. I got X number of dollars of benefits subsidy, and I could spend it any way I liked. I could buy healthcare. I could buy life insurance. Or I could simply add it to my check.

This system seemed to me ideal, not only because it gave maximum flexibility to the employee, but also because it was more honest. By stating objectively that the employee had X dollars to spend on benefits, it made it clear that benefits are simply dollars of compensation provided under a different label. Employers don't really provide healthcare or any other benefit; they simply subsidize employee purchase of those things.

The objective clarity of the cafeteria-style benefits system also has the potential to liberate employers from the perennial benefits conundrum --in which employers are stuck trying to meet the expectation that they are not just providers of employment but semi-parents or lords of plantations in which they are bound by noblesse oblige. When the employer simply provides a cash subsidy, not unlike wages, the employer's assumed role as guardian (a psychological relationship I think inherited from the days of serfdom) is uncoupled.

The benefits conundrum is particularly acute for staffing firms, who may engage an employee for as little as a few days or weeks but who are expected to offer benefits which, by their nature, are priced at levels that can't be reasonably be supported by a few short-term assignments. At the same time, many temporary workers prefer straight cash payments rather than a mix of benefits and (less) cash.

If temporary staffing firms were to adopt the cafeteria-style benefits system, the entire benefits question would be resolved, and at no additional cost. An example will demonstrate how. Instead of paying a worker, for example, $20/hour, a staffing firm could pay $17/hour, with $3/hour of cafeteria-style benefits. The worker would then have the option of selecting benefits as desired, or adding the cash back to their check. The staffing firm has incurred no additional outlay, but the worker is being offered benefits in a very real sense.

This is more than sleight of hand. Rather, it is sleight of hand to imply that employers provide benefits in the first place. They provide cash subsidies, nothing more. By offering benefits through the cafeteria-style system, the cash amounts are simply objectified, the employee is liberated to choose benefits or cash compensation as desired, and the employer can get out of the benefits conundrum, which for staffing firms has not only been a confusing burden but in the long-term is likely one of the biggest political icebergs in the staffing world's waters.

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