The controversial tax reform legislation recently passed is paying off in the form of a boon for corporate pay and benefits, and Willis Towers Watson is attempting to gauge just how much.
The company surveyed a swath of large and midsize employers and found that nearly half (49 percent) are considering a change to employee benefits, compensation, total rewards and executive pay programs either this year or next.
“The tax reform law is creating economic opportunity to invest in their people programs,” John Bremen, managing director, human capital and benefits, Willis Towers Watson, said in a statement. “While a significant number have already announced changes to some of their programs, the majority of employers are proceeding to determine which changes will have the highest impact and generate the greatest value.”
Two-thirds of those (66 percent) surveyed are planning or considering making changes to their benefit programs or have already taken action.
The most common include expansions to personal financial planning (34 percent), increasing 401k contributions (26 percent) and increasing or accelerating pension plan contributions (19 percent).
Other potential changes include increasing the employer health care subsidy, reducing or holding flat the employee payroll deduction, or adding a new paid family leave program in accordance with the Family Medical and Leave Act’s tax credit available for paid leave for certain employees.
Sixty-four percent of employers are also planning or considering taking action on their broad-based compensation programs or have already taken action.
The most common include conducting a review of their compensation “philosophy” (43 percent), addressing pay-gap issues (36 percent) and introducing a profit-sharing or one-time bonus payout to all employees (21 percent).
About four in 10 companies (41 percent) are planning or considering changes to their executive pay programs.
The most common include spending more time and analysis on this year’s incentive target (33 percent) and increasing the use of discretion in 2018 incentive plans (19 percent.