The 2010 BenchmarkPro survey reveals how companies are dealing with economic troubles caused by the recession. Nearly half of companies reduced or eliminated employee benefits.
BenchmarkPro reports that, “Other methods were also utilized as the results found 32.8 percent of organizations initiated hiring freezes. Nearly 28 percent of survey respondents used permanent layoffs, affecting 9.7 percent of their workforce. Budgets were frozen at 20.4 percent of organizations, compared to implementing salary freezes or delaying increases which was used by 10 percent of companies.”
All of these methods of money-saving have grave impact on employees. People are both frozen out from entering so many companies while experienced workers simultaneously lose their jobs. These budgeting ideologies and practices were implemented in different ways by different sectors of employment.
BenchmarkPro writes that, “Techniques to cut costs also differ by industry as 62.7 percent of banking and finance organizations reduced bonuses and incentives. This was followed by companies in insurance at 38.4 percent and hospitality at 34.5 percent. More than 20 percent of manufacturing employers used bonus and incentive reductions to stabilize costs, while it was used the least by not-for-profit employers, 15 percent.”
Employees, therefore, certainly seem to be feeling the effect of budget cuts by their employers. Benefits, once seen as a relatively stable aspect of total compensation, now seem to be under particular pressure. If your company has not cut benefits or does not plan to cut benefits, it may be a strong message to add to your employment branding or when negotiating with employee hiring packages. If you are one of the employers that had to make cuts to benefits, your future recruiting efforts will be helped with a strong, transparent message about your plans and values relating to employee benefits and compensation