Human Resources

Poor Economy Affects Staff Benefits

Budget pressures force organizations to be more creative in their benefits options.

September 27, 2012
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Companies have slashed their employee benefits budgets over the past three years due to the poor economy, causing employers to shift costs and decision-making to staff, according to “Employee Benefits Landscape in a Recovering Economy,” a study by the Society for Human Resource Management (SHRM).

More than three-fourths (77%) of employers say they’ve trimmed benefits since 2007 due to the poor economy, primarily health-care and retirement benefits, SHRM reports.

Other workplace benefits on the decline:

Pressure boosts creativity

Budget pressures have forced companies to be more creative in their efforts to recruit and retain employees, SHRM reports. More than half of survey respondents reported having difficulty finding skilled workers for certain job openings.

In response, employers continue to remodel their benefits plans, giving employees greater responsibility to manage their benefits.

A recent report by SHRM and the Families and Work Institute reveals that workplace flexibility has a positive impact on employees’ work-life experiences, leading to increased job satisfaction, lower turnover, and lower insurance costs.

“As opposed to a one-size-fits-all mandate for all employers, we support a new approach that reflects diverse employee needs and preferences, as well as differences among work environments, representation, industries, and organizational sizes,” SHRM reports. “This workplace flexibility policy should support employees in balancing their work, family, and personal obligations, and at the same time provide certainty, predictability, and stability to employers.”

As companies continue to shift benefits cost decision-making responsibility to employees, effective benefits communications become crucial.

“It is unreasonable for organizations to assume that employees are able to retain and understand elements of their entire benefits package from a distinct event, such as open enrollment or new-hire orientation,” according to SHRM. “Employers may need to develop a benefits communication approach that continues throughout the year. Continuous benefits communication can make it more likely that employees will value, understand, and use their benefits program.”

Other noteworthy findings from “Employee Benefits Landscape in a Recovering Economy” include:

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Great article! Unfortunately, most employees don’t feel valued or appreciated by their supervisors or employers. In fact, research has shown that the predominant reason team members quit their jobs is because they don’t feel valued. This is in spite of the fact that employee recognition programs have proliferated in the workplace – over 90% of all organizations in the U.S. has some form of employee recognition activities in place. But most employee recognition programs are viewed with skepticism and cynicism – because they aren’t viewed as being genuine in their communication of appreciation. Getting the “employee of the month” award, receiving a certificate of recognition, or a “Way to go, team!” email just don’t get the job done. How do you communicate authentic appreciation? We have found people have different ways that they want to be shown appreciation, and if you don’t communicate in the language of appreciation important to them, you essentially “miss the mark”. Additionally, employees need to receive recognition more than once a year at their performance review. Otherwise, they view the praise as “going through the motions”. A third component of authentic appreciation is that the communication has to be about them personally – not the department, not their group, but something they did. Finally, they have to believe that you mean what you say. How you treat them has to match the words you use. If you are not sure how your team members want to be shown appreciation, the Motivating By Appreciation Inventory ( will identify the language of appreciation and specific actions preferred by each employee. You then can create a group profile for your team, so everyone knows how to encourage one another. Remember, employees want to know that they are valued for what they contribute to the success of the organization. And communicating authentic appreciation in the ways they desire it can make the difference between keeping your quality team members or having a negative work environment that everyone wants to leave. Paul White, Ph.D., is the co-author of The 5 Languages of Appreciation in the Workplace with Dr. Gary Chapman.

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