In tough economic times, perks, bonuses and benefits are often the first thing to go. Unfortunately, a lack of benefits can have a highly detrimental effect on workplace morale and employee retention. To compensate, HR professionals are coming up with new ways to provide benefits without breaking the bank.According to the latest Society for Human Resource Management (SHRM) 2011 Employee Benefits Research Report, almost three-fourths of HR professionals surveyed reported that the economy has been detrimental to benefits programs—up five percent since 2010. Another report, the 2010 Towers Watson & Co. Global Workforce Study, identified the most common changes to benefits: reductions in or elimination of bonuses and pay increases, and cuts in health care benefits.
SHRM’s Director of Research Mark Schmit emphasizes that the significant cuts are likely due to a confluence of circumstances, such as a nine percent unemployment rate and the first drop in hiring expectations in the past 18 months.
“We have seen so many cuts to HR benefit budgets over the last three years,” Schmit said. “Organizations have had to be creative to find ways to compensate for the loss of benefits with hard cuts in order to stay competitive in the recruitment and retention of top talent. The addition of workplace flexibility programs has been one of the primary tactics organizations are using to offset the benefit losses.”
Though incentives are important for employees and often costly for employers, there are still cost effective ways to recognize a job well done. Many employers are choosing to segment rewards programs by job function. Developing specific reward and recognition programs for staff groups such as customer service teams or food service staff can enable organizations to reward those employees who go above and beyond in their specific areas. Segmenting rewards allows employers to control spending while focusing on one specific employee group at a time—enabling employers to recognize hard work without driving up costs across the board.
Educational opportunities are another area in which companies are expanding their benefits programs. By offering key staff the ability to further develop their skills, employers are able to strengthen and broaden their workers’ skill sets while rewarding their employees—helping companies to get the most out of their investment.
Another way to increase benefits without blowing the budget is by expanding flexible work schedule programs. There has been a marked increase in flexibility benefits. This year, more than half of HR professionals surveyed by SHRM said their companies offer flex time (up five percent from 2010), and 20 percent offer full time telecommuting (up from 17 percent in 2010).
Companies are also taking more creative approaches to health care benefits. Many have created incentives for employees to participate in workplace health programs in an attempt to cut health care costs without reducing benefits—oftentimes turning to social media to spread the word. For example, if an employee has three verified discussions with an assigned healthcare provider to monitor their general wellbeing, a company may provide a gift card reward. The healthier an employee is overall, the less likely they are to need costly care, which keeps premiums down.
Though the recession has taken a toll on many companies, benefits are still more important than ever. A strong benefits and rewards program helps maintain a high rate of employee retention while increasing workplace morale. Though it may take a little more creativity to control costs and bolster benefits at the same time, the rewards are well worth the investment.
Jackie Abrams is the Communications Manager at the National Club Association.