Thinking about cutting worker benefits to save money? Not so fast, expert warns.
“Maybe the juice isn’t worth the squeeze,” a senior consultant and actuary at Mercer said.
Published June 18, 2026 | Ginger Christ
Companies like Deloitte and Zoom made headlines recently for their decisions to pare back employee benefits — parental leave, in particular.
As healthcare costs continue to rise, others may be tempted to do the same thing. But they should make any benefits decision cautiously, said Rich Fuerstenberg, senior consultant and actuary at consulting firm Mercer.
About 3 in 4 U.S. finance leaders with budgetary oversight identified healthcare costs as one of their company’s top five operating expense concerns, an April Mercer report found, and 38% said they’ve cut spending on other benefits over the past two years as a result.
“Everything’s on the table,” Fuerstenberg said.
Companies are going to look for savings wherever they can find it, and sometimes CFOs come in with “a sledgehammer,” he said. HR can help add nuance to the conversation, to explain ROI in terms of retention and to contextualize benefit costs.
“If we work with a client and we cut their life insurance rate by 10%, their life insurance rates go down by 10%. If we cut their parental leave from 20 weeks to 15 weeks, their costs don’t go down by 25%. Not everybody took 20 weeks,” Fuerstenberg said.
The savings from reducing paid parental leave also can vary by industry and by state, he said.
In a hospital or a retail setting, for example, if someone is out on leave, that person likely will need to be replaced 100% of the time. But, in a white-collar workforce, the work can probably be redistributed, he said. At the same time, many states mandate paid family leave, so employers aren’t paying the full cost of the leave.
“Certainly the optics of this cut is not going to be received well. Are we getting as much value from that reduction as you think we’re going to get just by looking at it at 50,000 feet?” Fuerstenberg said. “Is it worth the bad blowback we’re going to get from our employees if we’re only going to save such a nominal amount?”
Before making cuts, he said, companies should consider three questions: How do they demonstrate the value of the program already in place; how do they compare to benchmark; and how much would they really be saving?
“Is it worth it when you factor in state mandated benefits, productivity costs, exempt versus non-exempt employees? When you start adding those subtle fees, maybe the juice isn’t worth the squeeze,” Fuerstenberg said.
There are other ways companies can potentially trim costs, he said, including offering unlimited paid time off.
“If you cut parent leave from 20 weeks to 10, the company wins, the employees lose. Period. Full stop,” Fuerstenberg said.
In switching to unlimited PTO, generally the only people who lose are those leaving the company who have accrued time off, he said. “With everything on the table, I have to find savings. That’s one of those areas where I think there are savings to be had.”
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Source: HR Dive
https://www.hrdive.com/news/cutting-worker-benefits-to-save-money-not-so-fast-expert-warns/823165/
