Dear Workforce How Has the Recession Affected the Types of Benefits That Organizations Are Providing to Employees?
How has the recession affected the types of benefits organizations use to keep their top performers? What kinds of benefits are organizations finding to be most effective at boosting retention and employee engagement, especially during the recession?
Dear Beneficial Results:
Not surprisingly, the global recession impacted the scope and availability of employee reward and benefit programs around the world. Results from Towers Watson & Co.s's Global Workforce Study, a 2010 survey of more than 20,000 employees in 22 countries, showed that some of the most common changes included the reduction or elimination of bonuses and pay increases, along with cuts in health care benefits.
How have employers and employees responded since weathering the worst of the recession? Employers now face a context in which employees seek greater security. Employees rate a secure and stable position as the most important element in their preferred work situation. Consistent with this desire for security, employees are also more risk-averse since the recession, especially regarding health care benefits. A 2010 U.S. survey of attitudes toward retirement conducted by Towers Watson, for example, shows that employees are willing to see more taken out of their paychecks in exchange for greater predictability in health care costs. Employees say they even opt for lower bonus and pay increases in favor of more retirement benefits and predictable health care costs.
Organizations, which face rising costs and more constrained resources, are responding with more creative options. This trend is evident in health care programs. A Towers Watson study of 588 employers completed in January 2011 revealed that organizations are expanding the use of incentives for employees to participate in workplace health programs. Employers are also increasingly using social media technologies to spread the message about such programs.
In addition, reward programs are increasingly segmented. For example, many employers are choosing to customize reward and recognition programs for employees in critical roles that directly drive business success, such as customer service staff or research-and-development teams. Such segmentation allows employers to better control total spending on rewards while targeting populahealtions that they cannot afford to lose.
Still other employers are expanding the notion of reward and benefits to include learning opportunities and effective work environments. For example, many health care organizations are supporting employee efforts to meet requirements for job-specific certifications, directing resources toward programs that further employee development in key roles.
Post-recession, some realities surrounding rewards and benefits remain. Defined benefit plans are more often cited as a reason to join an organization than are defined contribution plans. Pension programs are among the top factors that would entice employees to join another organization. The competitiveness of pay and benefit programs is a top driver of employees' intentions to stay with their current employers. Far from disappearing in a post-recession economy, benefit and reward programs remain an important component of human capital strategies, and employers are responding with increased creativity in efforts to hold the line on costs without risking employee retention and engagement.
SOURCE: Patrick Kulesa, Towers Watson & Co., New York
LEARN MORE: Rewarding employees goes beyond pay and benefits, especially in a tight economy.
Workforce Management Online, July 2011 -- Register Now!
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