Compensation and Benefits Strategies Recommendation
Providing a first-rate benefits package for employees can be an important part of the recruitment and retention puzzle, especially for small businesses. Benefits matter. Small businesses like the limo service Bradley Stonefield is establishing has many challenges. Nowadays, companies are running on leaner budgets. There is competition in attracting good employees between companies. The most popular cafeteria plans that may have multiple options for health coverage, vision coverage and other benefits are what many employees desired. Employees have the ability to use a fixed amount allotted to custom-design a package. Small businesses must keep looking in order to be able to offer plans that are competitive with those offered by larger firms. Small companies must look at which benefits are used than the others. For example, if hospitalization is used by very few they should not offer it or just offer it on voluntary basis. This could bring down the cost tremendously. About compensation that the United States Department of Labor, (2013), minimum wage rate in Texas is $7.25 per hour. This is absolute minimum wage. This rate may not be attractive to retain and recruit licensed drivers; however, it is used to clerical or cleaning staff, according to Bureau of Labor and Statistics (2013). National mean of hourly pay rate in limousine industry is $13.30, with annual income of $27,670. Texas data shows the following statistics: $10.88 hourly mean wage and $22,620 annual mean wage, which are approximately 19% lower than national average. The pay rate should be negotiated individually with each driver; however, general policy of how the salary or pay rate should be calculated is between organization and its employees. Once committed, it represents a legal agreement between the parties. For example pay rate could be based on number of passengers and time served. According to McBride (2005) “For $75 to $125 an hour with a two-hour minimum, customer can cruise in style just like the rich and famous. Salary: Wages vary depending upon the number of customers and length of time driven.” Our team would recommend starting drivers at $10 per hour, just little under Texas’s average pay rate for limousine drivers. The pay rate is tied only to hours worked, regardless of number of passengers. Pay rate progression could be established based on quarterly performance assessments. This evaluation system could encompass the following elements: customer satisfaction, safety, commitment and collaboration. Based on these elements and their measures, the employee could be ranked as top performer or improvement needed, and the pay rate adjusted based on these measures.
The Estimated Plan is calculated using the following assumptions: •15 vehicle fleet
•$6000 maintenance cost per vehicle
•$22,620 average annual income for 15 drivers, with average 5% increase in payroll annually. •Other payroll is calculated using 10 part-time employees with 5 hours a day, at minimum wage $7.25 per hour, with estimated 250 working days per year. No annual increase included in estimates. •Fuel costs at $10,000 per vehicle per year with no estimated increase. Estimated Plan
Benefits plan strategies.
Because of limitation of potential net revenue is only an estimate, therefore a tentative benefits package is draft with flexibility for adjustment as Mr. Stonefield organization grow and establish stability for the next three to five years. The benefit package is design to stay competitive as requested and cost-efficient for Mr. Stonefield's new startup limousine business. According to Cascio (2013), the design of benefits package should takes major concern.Federal Employment Laws requires employer benefit must offer Workers' compensation, Social...