Compensation professionals are called upon to develop and adjust compensation policies to ensure competitiveness by hiring and retaining the best employees. Now more than$$ ever, compensation$$ professionals' are faced with stagnant or shrinking$$ resources, which makes their work even more challenging. It is essential that compensation professionals understand the allocation of costs to various components of total compensation as well as the impact of reallocation of resources on the compensation mix.

Cost

Percent

Total Compensation

$$$$40$

$100$

$\%$

$$Wages$/$Salaries

$80$

$\%$

$($of Total$$ Compensation$)$

Employee Benefits

$20$

$\%$

$($of Total$$ Compensation$)$

Discretionary

$76$

$\%$

$($of Employee$$ Benefits$)$

$$Legally$-$Required

$24$

$\%$

$($of Employee$$ Benefits$)$

Part $2$

Assuming that the hourly total compensation cost is $$$$40$

$$: