This article dives into decisions that employers make when deciding benefits packages for US-based employees.  It tries to expose some of the complexity and open questions of this problem.

As employees we think “More benefits are better” but as employers the question is instead “how should I allocate money between salary, health, and retirement benefits” and “how do I make a decision that makes sense for everyone in the company?”.  This is a more complex problem, and so maybe more interesting.

## Example

Let’s say that we plan to spend $100,000 on an employee, how should we allocate that money between salary, health, and retirement benefits. Let’s consider a few options: 1. Strong benefits •$80,000 salary
• Great health insurance fully covered at a cost of $10,000 per year, dependents are mostly covered • 100% 401k matching up to$10,000
2. Weak benefits
• $95,000 salary • OK health insurance fully covered at a cost of$5,000 per year, dependents sorta covered
• No retirement benefits (let them make this decision with an IRA)
3. Straight cash