Employers today are facing some of their most difficult decisions when it comes to one of their most important asset: their employees, writes Elliot Dinkin in this month's EBN. Layoffs, salary and retirement plan freezes, pay cuts, health care benefit reductions - nothing is off the table in this recession as companies look to cut costs.
Clearly one who feels your pain, Dinkin outlines a five-point plan to developing a long-term total comp strategy to help you take a fist to the recession. For more on rethinking total comp, read this month's EBN cover story, "No stone unturned."
Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts
Wednesday, May 13, 2009
Friday, May 8, 2009
Tip of the Day: 3 tips on tech for the price of 1
Today only, I'm giving you the recession-special deal of three tips for the price of one (free)!
According to Watson Wyatt, reviewing your tech footprint and ID'ing ways to trim inefficiencies from your IT processes can cut costs and bood productivity -- two things everyone is going for these days.
“HR technology is ripe for review,” says Steve Hitzeman, senior leader in Watson Wyatt’s tech and administration solutions practice. “The goal is not only to find near-term efficiencies but also to ensure the organization is positioned for growth when economic conditions improve.”
Here are WW's three tips to recession-proofing your tech ops:
1. Optimize HR operational and service delivery effectiveness.
WW finds 61% of companies are looking to optimize their delivery model and vendors. Conducting a review of the current HR service delivery model — which includes a mix of HR technology, call centers and vendors — can result in dramatic cost savings.
Although many HR departments have adopted models to reduce administrative costs -- enabling HR to take on more strategic work -- the effort HR spends on administration has not changed significantly because most HR departments didn't follow through to effectively integrate different technologies.
2. Review and benchmark outsourced vendor contracts.
Many companies are not seeing the full effect of process efficiencies, cost savings or improved service they expected from their human resources outsourcing and related technology and service vendor contracts -- often have a patchwork of applications and service providers that aren’t fully integrated or optimized. WW estimates you can save between 10% and 20% once you reassess all of your vendor relationships.
3. Leverage Web 2.0 technologies to create a “consumer-grade” experience.
Leveraging Web 2.0 technologies — such as blogs, podcasts, wikis and shared teamsites — is key to managing today’s information overload and engaging employees. The generation currently entering the workforce has learned to communicate and collaborate using these tools and expects the same “consumer-grade” experience at work.
This can be achieved with corporate tools similar to Facebook, Twitter and YouTube available internally, significantly improving connectivity and employees’ experience of the company intranet.
“HR can take a page from the Internet playbook and benefit from the same tools that have driven the unexpected explosion in online productivity and innovation globally,” says Michael Rudnick, Watson Wyatt’s global intranet and portal leader.
According to Watson Wyatt, reviewing your tech footprint and ID'ing ways to trim inefficiencies from your IT processes can cut costs and bood productivity -- two things everyone is going for these days.
“HR technology is ripe for review,” says Steve Hitzeman, senior leader in Watson Wyatt’s tech and administration solutions practice. “The goal is not only to find near-term efficiencies but also to ensure the organization is positioned for growth when economic conditions improve.”
Here are WW's three tips to recession-proofing your tech ops:
1. Optimize HR operational and service delivery effectiveness.
WW finds 61% of companies are looking to optimize their delivery model and vendors. Conducting a review of the current HR service delivery model — which includes a mix of HR technology, call centers and vendors — can result in dramatic cost savings.
Although many HR departments have adopted models to reduce administrative costs -- enabling HR to take on more strategic work -- the effort HR spends on administration has not changed significantly because most HR departments didn't follow through to effectively integrate different technologies.
2. Review and benchmark outsourced vendor contracts.
Many companies are not seeing the full effect of process efficiencies, cost savings or improved service they expected from their human resources outsourcing and related technology and service vendor contracts -- often have a patchwork of applications and service providers that aren’t fully integrated or optimized. WW estimates you can save between 10% and 20% once you reassess all of your vendor relationships.
3. Leverage Web 2.0 technologies to create a “consumer-grade” experience.
Leveraging Web 2.0 technologies — such as blogs, podcasts, wikis and shared teamsites — is key to managing today’s information overload and engaging employees. The generation currently entering the workforce has learned to communicate and collaborate using these tools and expects the same “consumer-grade” experience at work.
This can be achieved with corporate tools similar to Facebook, Twitter and YouTube available internally, significantly improving connectivity and employees’ experience of the company intranet.
“HR can take a page from the Internet playbook and benefit from the same tools that have driven the unexpected explosion in online productivity and innovation globally,” says Michael Rudnick, Watson Wyatt’s global intranet and portal leader.
Thursday, April 30, 2009
Tip of the Day: Legal considerations for furloughs
I received this week from Mercer citing alternatives to layoffs, furloughs and suspending 401(k) matches, while still cutting costs. About halfway through, I saw this nugget:
"...furloughs may prompt scrutiny from the Department of Labor since U.S. labor laws prevent employers from requiring salaried employees to reduce the number of weekly hours worked like they can do with hourly employees."
You may already know that, but it was news to me. And even if you knew, it never hurts to be reminded, right?
At any rate, Mercer also offered some alternative approaches to traditional cost-cutting measures without harming your employment brand or diminishing your resources of talent:
"These solutions involve cutting pay in exchange for enhanced paid-time-off banks and offering leaves of absence in monthly increments at reduced pay levels. Instituted as either a voluntary or involuntary measure, these alternative approaches cut workforces in the short-term while maintaining employment of critical talent over the long-term. The benefits are numerous – availability of essential employees once business improves, option to restore salaries and paid time-off to original levels, strong employee morale and additional cost-savings by not having to rehire workers."
"...furloughs may prompt scrutiny from the Department of Labor since U.S. labor laws prevent employers from requiring salaried employees to reduce the number of weekly hours worked like they can do with hourly employees."
You may already know that, but it was news to me. And even if you knew, it never hurts to be reminded, right?
At any rate, Mercer also offered some alternative approaches to traditional cost-cutting measures without harming your employment brand or diminishing your resources of talent:
"These solutions involve cutting pay in exchange for enhanced paid-time-off banks and offering leaves of absence in monthly increments at reduced pay levels. Instituted as either a voluntary or involuntary measure, these alternative approaches cut workforces in the short-term while maintaining employment of critical talent over the long-term. The benefits are numerous – availability of essential employees once business improves, option to restore salaries and paid time-off to original levels, strong employee morale and additional cost-savings by not having to rehire workers."
Wednesday, April 29, 2009
Overheard @: Sabbaticals may help prevent layoffs
This sounded like potato po-tah-to to me, but in an exclusive to BenefitNews.com, the folks from yourSABBATICAL make their case for not only why an unpaid sabbatical isn't a euphemism for layoff, but also why implementing a sabbatical program could help employers prevent conducting actual layoffs.
Read the report here, and let me know. Are sabbaticals and furloughs softer terms for layoffs?
Read the report here, and let me know. Are sabbaticals and furloughs softer terms for layoffs?
Friday, April 24, 2009
Overheard @: "60 Minutes" segment profiles collapse of retirement dreams
Fairly or unfairly, the 401(k) is getting an awfully bad rap lately. Among the most recent jabs was from last Sunday's piece on "60 Minutes," which profiled tales of ordinary Americans who -- although traveling different career and financial paths -- met the same fate: unable to secure the retirement they'd dreamed of, due to retirement savings losses.
The segment also interviewed 401(k) heavyweights David Wray, president of the Profit Sharing/401k Council of America, and Brooks Hamilton, who helped design retirement plans for some of the country's largest corporations.
Wray, maintaining that the 401(k) is the best retirement vehicle the nation has, commented that the economic collapse and resulting stock market plunge that contributed to the massive 401(k) losses is "not a 401(k) problem. That is our entire investment system. In America, it's a society based on freedom and choice and personal responsibility. We need to help [investors] understand these responsibilities and execute them to the best they can. 401(k) is part of that. There are no guarantees."
Hamilton, who called the quality of mutual funds in 401(k)s "mediocre," also observed that 401(k)s were meant to be part of a three-legged stool that included Social Security and defined benefit plans. However, he noted, "The three-legged stool, if you will, has gone to two legs and it's wobbly."
Click here to view the entire segment and comment here as well as at the CBS News site with your thoughts.
The segment also interviewed 401(k) heavyweights David Wray, president of the Profit Sharing/401k Council of America, and Brooks Hamilton, who helped design retirement plans for some of the country's largest corporations.
Wray, maintaining that the 401(k) is the best retirement vehicle the nation has, commented that the economic collapse and resulting stock market plunge that contributed to the massive 401(k) losses is "not a 401(k) problem. That is our entire investment system. In America, it's a society based on freedom and choice and personal responsibility. We need to help [investors] understand these responsibilities and execute them to the best they can. 401(k) is part of that. There are no guarantees."
Hamilton, who called the quality of mutual funds in 401(k)s "mediocre," also observed that 401(k)s were meant to be part of a three-legged stool that included Social Security and defined benefit plans. However, he noted, "The three-legged stool, if you will, has gone to two legs and it's wobbly."
Click here to view the entire segment and comment here as well as at the CBS News site with your thoughts.
Friday, April 17, 2009
Tip of the Day: 'Look before you leap'
As the recession drags on, more employers are reducing or eliminating their matching 401(k) contributions. A new report from Mercer, "Suspending the 401(k) match – Look before you leap," cautions employers to have a full understanding of the implications and potential pitfalls of taking this step.
“Distressed organizations may feel they lack sufficient time or resources to carefully consider the impact of contribution reductions or to evaluate alternative approaches. But the effort invested up front could save considerable time and expense later in dealing with unintended consequences,” says Bill McClain, Mercer retirement consultant.
“While the loss of one year’s employer contribution won’t have a huge impact on an employee’s retirement benefit, it could represent yet another incremental loss to an already-weakened benefit,” McClain observes. “Suspending contributions also results in a lost opportunity to purchase equities at historically low prices. These implications need to be weighed against the organization’s need to preserve capital.”
Companies should not lose sight of their longer-term business objectives, Mercer warns. “Many organizations will be better off identifying cost saving that will have only a minimal impact on those groups of employees that will be the most critical to helping them move forward once the economy improves.”
In addition, the regulatory implications of a match reduction or suspension can vary greatly from plan to plan. Employers maintaining an IRS safe harbor design are subject to specific rules or even restrictions on suspending or reducing contributions during the plan year. Other plan designs may offer more flexibility in terms of changing employer contributions, but even these plans must satisfy various regulatory requirements.
In particular, employers need to understand whether a plan amendment is required and whether that amendment raises any anti-cutback issues.
Plan sponsors should determine whether language in past employee communications could be interpreted as a promise to provide ongoing contributions. Organizations with collectively bargained or other employment agreements in place may be prevented from making company-wide changes to DC contributions.
“Distressed organizations may feel they lack sufficient time or resources to carefully consider the impact of contribution reductions or to evaluate alternative approaches. But the effort invested up front could save considerable time and expense later in dealing with unintended consequences,” says Bill McClain, Mercer retirement consultant.
“While the loss of one year’s employer contribution won’t have a huge impact on an employee’s retirement benefit, it could represent yet another incremental loss to an already-weakened benefit,” McClain observes. “Suspending contributions also results in a lost opportunity to purchase equities at historically low prices. These implications need to be weighed against the organization’s need to preserve capital.”
Companies should not lose sight of their longer-term business objectives, Mercer warns. “Many organizations will be better off identifying cost saving that will have only a minimal impact on those groups of employees that will be the most critical to helping them move forward once the economy improves.”
In addition, the regulatory implications of a match reduction or suspension can vary greatly from plan to plan. Employers maintaining an IRS safe harbor design are subject to specific rules or even restrictions on suspending or reducing contributions during the plan year. Other plan designs may offer more flexibility in terms of changing employer contributions, but even these plans must satisfy various regulatory requirements.
In particular, employers need to understand whether a plan amendment is required and whether that amendment raises any anti-cutback issues.
Plan sponsors should determine whether language in past employee communications could be interpreted as a promise to provide ongoing contributions. Organizations with collectively bargained or other employment agreements in place may be prevented from making company-wide changes to DC contributions.
Tuesday, April 14, 2009
News You Can Use: Retirement confidence at record low
EBRI's annual barometer of Americans' retirement confidence shows the recession has worn away workers' assuredness that their golden years will be happy, healthy and financially secure.
Released today, the 19th annual Retirement Confidence Survey posts a record-low 13% of respondents who say they are very confident of having enough money to live comfortably in retirement, down from 18% in 2008 and 27% in 2007. Also, in addition to more employees expecting to work full-time longer (89%), more respondents also are including part-time work into their retirement plans (72%).
“Our survey first picked up the drop in retirement confidence last year,” says EBRI's Jack VanDerhei. “Given the uncertainties that exist about economy, it is no surprise the downward trend has continued. By any measure, the two-year results amount to a very significant drop in workers’ and retirees’ confidence in their retirement prospects.”
To help shore up retirement savings, employees say they are:
* Reducing expenses 81%.
* Changing investments 43%.
* Working more hours or a second job 38%.
* Saving more 25%.
* Seeking financial advice 25%.
Have you noticed that the recession has depressed employees' retirement confidence and/or contributions? What are you doing to help them better prepare? Comment and let me know.
Released today, the 19th annual Retirement Confidence Survey posts a record-low 13% of respondents who say they are very confident of having enough money to live comfortably in retirement, down from 18% in 2008 and 27% in 2007. Also, in addition to more employees expecting to work full-time longer (89%), more respondents also are including part-time work into their retirement plans (72%).
“Our survey first picked up the drop in retirement confidence last year,” says EBRI's Jack VanDerhei. “Given the uncertainties that exist about economy, it is no surprise the downward trend has continued. By any measure, the two-year results amount to a very significant drop in workers’ and retirees’ confidence in their retirement prospects.”
To help shore up retirement savings, employees say they are:
* Reducing expenses 81%.
* Changing investments 43%.
* Working more hours or a second job 38%.
* Saving more 25%.
* Seeking financial advice 25%.
Have you noticed that the recession has depressed employees' retirement confidence and/or contributions? What are you doing to help them better prepare? Comment and let me know.
Friday, April 10, 2009
Overheard @: Workers hunkering down for long recession
A new survey of 1,002 Americans by Econ4U shows how Americans are responding to the financial crisis. And although respondents appear to be saving more, the overall outlook is pretty cloudy.
* 76% expect the recession to last for at least another year.
* 64% have less than six months of savings in case they lose their job. 39% have two months or less.
* 64% know someone who has lost their job in the past six months.
* 40% have begun saving more because of concerns about the economy.
* 19% have experienced trouble accessing credit in the past six months.
* 83% of survey respondents said they expected a tax refund this year. 31% were planning on spending the refund, 29% expected to put it into savings and 18% said they would use it to pay off existing credit card debt.
"When two-thirds of Americans do not have enough savings to pay their bills for six months if they lost their job, it is clear that the skills of budgeting and saving skills have become something of a lost art in this country,” says James Bowers, managing director for the Center for Economic and Entrepreneurial Literacy. "Increased adult education in economics and personal finance would address the concerns of many Americans and give them the tools to protect themselves during this economic downturn.”
Well, there you have it, pros. What is your company doing to make workers more financially savvy? Is it an employer's duty to provide such an education? Comment and let me know.
Also, read more from EBN and BenefitNews.com on financial education.
* 76% expect the recession to last for at least another year.
* 64% have less than six months of savings in case they lose their job. 39% have two months or less.
* 64% know someone who has lost their job in the past six months.
* 40% have begun saving more because of concerns about the economy.
* 19% have experienced trouble accessing credit in the past six months.
* 83% of survey respondents said they expected a tax refund this year. 31% were planning on spending the refund, 29% expected to put it into savings and 18% said they would use it to pay off existing credit card debt.
"When two-thirds of Americans do not have enough savings to pay their bills for six months if they lost their job, it is clear that the skills of budgeting and saving skills have become something of a lost art in this country,” says James Bowers, managing director for the Center for Economic and Entrepreneurial Literacy. "Increased adult education in economics and personal finance would address the concerns of many Americans and give them the tools to protect themselves during this economic downturn.”
Well, there you have it, pros. What is your company doing to make workers more financially savvy? Is it an employer's duty to provide such an education? Comment and let me know.
Also, read more from EBN and BenefitNews.com on financial education.
Wednesday, April 1, 2009
Tip of the Day: Retirement plans may be affected by TARP
I got another one for you to take to your legal eagles. According to a blog alert from Winston & Strawn, the Treasury Department will participate in a Public-Private Investment Program to buy up "legacy securities" (a much kinder, gentler term for "toxic assets").
If all goes right, fund managers will create a private investment vehicle with funds raised from private investors. So how do retirement plans fit in?
According to W&S, "This likely means that ERISA 'benefit plan investors' should be limited to 25% of any investment fund. Some managers may be willing to comply with the ERISA restrictions, in which case, assuming the structures can also be vetted for ERISA compliance, their investment fund could accept more than 25% of its investments from benefit plan investors."
I know the "ERISA compliance" part perked you up, so get your legal folks on it and comment back with your thoughts.
If all goes right, fund managers will create a private investment vehicle with funds raised from private investors. So how do retirement plans fit in?
According to W&S, "This likely means that ERISA 'benefit plan investors' should be limited to 25% of any investment fund. Some managers may be willing to comply with the ERISA restrictions, in which case, assuming the structures can also be vetted for ERISA compliance, their investment fund could accept more than 25% of its investments from benefit plan investors."
I know the "ERISA compliance" part perked you up, so get your legal folks on it and comment back with your thoughts.
Overheard @: Outplacement benefits become latest sign of the times
Clearly, no employer wants to layoff valued, hardworking staff, but the recession has left many companies with little choice. However, I hear that some employers are doing their best to take the sting out of such action by offering outplacement services.
According to reporting from Workforce Management, a survey from outplacement firm Lee Hecht Harrison that finds the top reason companies use outplacement is to maintain positive relationships with employees.
Such goodwill doesn't come cheap. WM reports that outplacement offerings -- ranging from web-based services to in-person coaching -- can cost anywhere up to tens of thousands of dollars per employee. Too much to pay in these recessive times? Perhaps. But EBN reporting finds that even making small overtures to your former employees can help bring them back into the fold, especially if you never wanted to lose them in the first place.
What do you think? Would/has your company considered adding outplacement services to its benefits slate? What is the potential ROI? Comment and let me know.
According to reporting from Workforce Management, a survey from outplacement firm Lee Hecht Harrison that finds the top reason companies use outplacement is to maintain positive relationships with employees.
Such goodwill doesn't come cheap. WM reports that outplacement offerings -- ranging from web-based services to in-person coaching -- can cost anywhere up to tens of thousands of dollars per employee. Too much to pay in these recessive times? Perhaps. But EBN reporting finds that even making small overtures to your former employees can help bring them back into the fold, especially if you never wanted to lose them in the first place.
What do you think? Would/has your company considered adding outplacement services to its benefits slate? What is the potential ROI? Comment and let me know.
Tuesday, March 17, 2009
Tip of the Day: Consider being taken captive
In this month's EBN, contributor Karin Landry outlines how the current recession may present an opportunity for benefit managers to consider turning to captives to reduce benefits costs and manage risk.
Higher savings, lower risk? Stop looking for the catch. Just click here to read more.
Higher savings, lower risk? Stop looking for the catch. Just click here to read more.
Friday, March 13, 2009
News You Can Use: CVS closes 90 MinuteClinics til next flu season
In what may be another sign of the (recession) times, CVS has announced it will close 90 of the retail MinuteClinics located in its stores until next flu season, citing an effort to align clinic open hours with consumer demand.
Is this a cost-cutting move in response to the recession, a sign of consumers foregoing care due to cost or a larger rejection of the retail clinic model? Comment and let me know what you think.
More EBN coverage on retail clinics:
http://tinyurl.com/atgayg
http://tinyurl.com/c7ugop
Is this a cost-cutting move in response to the recession, a sign of consumers foregoing care due to cost or a larger rejection of the retail clinic model? Comment and let me know what you think.
More EBN coverage on retail clinics:
http://tinyurl.com/atgayg
http://tinyurl.com/c7ugop
Friday, March 6, 2009
Overheard @: Pension relief 'killed two birds with one stone'
In a "Five Minutes With ..." podcast, Evan Inglis, chief actuary for the Vanguard Strategic Retirement Consulting group, talks with Associate Editor Lydell Bridgeford about the short- and long-term implications of the Worker, Retiree and Employer Recovery Act as it relates to pension funding relief for DB plan sponsors in light of the economic crisis.
Inglis says that as the law contained PPA technical corrections as well as provide breathing room for plan sponsors, it "killed two birds with one stone." Click here to download the audio, and click here to read the March EBN article, "Pension lifeline too short, experts say."
Inglis says that as the law contained PPA technical corrections as well as provide breathing room for plan sponsors, it "killed two birds with one stone." Click here to download the audio, and click here to read the March EBN article, "Pension lifeline too short, experts say."
Tuesday, March 3, 2009
Overheard @: Psst! Beware -- disgruntled employees can 'Telonu'
Wrapped with a bow, ready-made for the "technology-as-a-curse" files is a new site and application from Telonu Inc. that, by the company's own description, allows current and former employees to "rave, rant and rate your workplace and the people there."
The firm's latest additions are its Layoff Tracker Widget and Layoff Talk site to help people keep pace with the job market and stay on top of the latest pink slip announcements amid the recession. The widget lets anyone display as-it-happens layoff announcements on their personal Web site or blog. For each announcement, the Layoff Tracker displays the company, date of announcement and number of affected jobs (Get it? Telonu = tell on you).
No, you're not having a nightmare. And unfortunately it gets worse. Users then can visit Telonu’s Layoff Talk site, where they can read more details about a specific layoff, check out what others in the community have posted and leave their own anonymous posting.
Although far from ideal for employers, Telonu is another sign of the times, as layoffs have become a large part of today’s work culture. Stats from the Bureau of Labor Statistics show that since the start of the recession in 2007, the total number of unemployment claims jumped to 2,394,434.
What do you think of Telonu? Useful tool or literally a sounding board for disgruntled current and ex-workers? Comment and let me know.
The firm's latest additions are its Layoff Tracker Widget and Layoff Talk site to help people keep pace with the job market and stay on top of the latest pink slip announcements amid the recession. The widget lets anyone display as-it-happens layoff announcements on their personal Web site or blog. For each announcement, the Layoff Tracker displays the company, date of announcement and number of affected jobs (Get it? Telonu = tell on you).
No, you're not having a nightmare. And unfortunately it gets worse. Users then can visit Telonu’s Layoff Talk site, where they can read more details about a specific layoff, check out what others in the community have posted and leave their own anonymous posting.
Although far from ideal for employers, Telonu is another sign of the times, as layoffs have become a large part of today’s work culture. Stats from the Bureau of Labor Statistics show that since the start of the recession in 2007, the total number of unemployment claims jumped to 2,394,434.
What do you think of Telonu? Useful tool or literally a sounding board for disgruntled current and ex-workers? Comment and let me know.
Monday, March 2, 2009
News You Can Use: Employers offer good news, bad news on the recession
The bad news is, employers see the current recession lasting a while. The good news is, they also seem to think the worst of layoff and other cuts is past.
New survey data from Watson Wyatt shows 61% of employers expect the current downturn to last at least until the end of 2009. However, the firm reports that most companies already have made most of the sweeping changes they intend to.
“Companies have come to terms with the fact that this recession is going to last and that they can’t slash their way out of it,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “With over half of companies reporting they have already made layoffs, they are now focusing on smaller, more sustainable cost-cutting actions.”
According to the survey of 245 large U.S. employers conducted in February, 52% have made layoffs, up from 39% two months ago. Additionally, 56% now have a hiring freeze in effect, an increase from 47% in December’s survey.
However, the number of companies planning layoffs has fallen from 23% to 13%. “This may be good news," notes Laurie Bienstock, Watson senior compensation consultant, "as companies move more towards cost-cutting efforts other than workforce reductions in an effort to hold on to the workers they will need when recovery eventually comes.”
Workers won't be untouched by those other cost-cutting efforts, though. Among them are:
* Salary freezes, 42% (up from 13%).
* Reductions in 401(k) matches, 12% (up from 3%).
* A shortened workweek, 13% (up from 2%).
* Travel restrictions, 69% (up from 48%).
What do you think? In terms of layoffs, is the worst over? What alternative cost-cutting measures are you considering in lieu of/in addition to salary reductions? Comment and let me know.
New survey data from Watson Wyatt shows 61% of employers expect the current downturn to last at least until the end of 2009. However, the firm reports that most companies already have made most of the sweeping changes they intend to.
“Companies have come to terms with the fact that this recession is going to last and that they can’t slash their way out of it,” says Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “With over half of companies reporting they have already made layoffs, they are now focusing on smaller, more sustainable cost-cutting actions.”
According to the survey of 245 large U.S. employers conducted in February, 52% have made layoffs, up from 39% two months ago. Additionally, 56% now have a hiring freeze in effect, an increase from 47% in December’s survey.
However, the number of companies planning layoffs has fallen from 23% to 13%. “This may be good news," notes Laurie Bienstock, Watson senior compensation consultant, "as companies move more towards cost-cutting efforts other than workforce reductions in an effort to hold on to the workers they will need when recovery eventually comes.”
Workers won't be untouched by those other cost-cutting efforts, though. Among them are:
* Salary freezes, 42% (up from 13%).
* Reductions in 401(k) matches, 12% (up from 3%).
* A shortened workweek, 13% (up from 2%).
* Travel restrictions, 69% (up from 48%).
What do you think? In terms of layoffs, is the worst over? What alternative cost-cutting measures are you considering in lieu of/in addition to salary reductions? Comment and let me know.
Tuesday, February 24, 2009
Wish You Were Here: Kraft rebrands, puts more emphasis on values
I'm not sure if it's due to the recession, but it seems many big-name companies are rebranding -- some to generally positive reviews, like Pepsi, and others not so much like Tropicana orange juice (which, strangely, is owned by PepsiCo). Kraft Foods also is rebranding, unveiling a new logo (seen here) and slogan, "Make today delicious."
The new launch seeks to re-emphasize the company's values:
* We inspire trust.
* We act like owners.
* We keep it simple.
* We are open and inclusive.
* We tell it like it is.
* We lead from the head and the heart.
* We discuss. We decide. We deliver.
It got me thinking: If you could rebrand your company with a new logo and slogan, what would it be? Comment and let me know.
The new launch seeks to re-emphasize the company's values:
* We inspire trust.
* We act like owners.
* We keep it simple.
* We are open and inclusive.
* We tell it like it is.
* We lead from the head and the heart.
* We discuss. We decide. We deliver.
It got me thinking: If you could rebrand your company with a new logo and slogan, what would it be? Comment and let me know.
Tuesday, February 17, 2009
Tip of the Day: Read, watch "I.O.U.S.A."
This month, EBN reports that the trillions of dollars lost in national wealth from collapsing companies, lost jobs and homes, failing banks and sliding stock market as a result of the recession is simply too large for Americans to comprehend -- yet too large for them to ignore either, according to the authors and producers of “I.O.U.S.A.,” the 2008 book and documentary about our national debt and financial failings.
"These numbers are overwhelming for most Americans,” says co-author Addison Wiggin. “The simple fact is, we’ve been successful as a nation for so long that the average citizen doesn’t have a clue what’s happening on Wall Street or in the economy. Fear of gigantic numbers, seemingly indiscernible statistics, debates over theory and partisan bickering only add to the confusion. When people don’t understand something, it’s easier to just dismiss it.”
However, the current economic state is not something employers and employees can dismiss anymore. To help individuals and companies understand what went wrong and where the U.S. economy can go from here, “I.O.U.S.A.” -- both the book and film -- illustrates the financial crises in an easy-to-understand way by examining four deficits before the nation: the budget deficit, personal savings deficit, trade deficit and leadership deficit.
Called by Reuters “an ‘Inconvenient Truth’ for the U.S. economy,” Wiggin hopes the book and film will help Americans “rethink what they expect from their government, and by extension, how they plan for their own future.”
To order a copy of “I.O.U.S.A.,” or view a 30-minute version of the film, visit http://www.iousathemovie.com/.
"These numbers are overwhelming for most Americans,” says co-author Addison Wiggin. “The simple fact is, we’ve been successful as a nation for so long that the average citizen doesn’t have a clue what’s happening on Wall Street or in the economy. Fear of gigantic numbers, seemingly indiscernible statistics, debates over theory and partisan bickering only add to the confusion. When people don’t understand something, it’s easier to just dismiss it.”
However, the current economic state is not something employers and employees can dismiss anymore. To help individuals and companies understand what went wrong and where the U.S. economy can go from here, “I.O.U.S.A.” -- both the book and film -- illustrates the financial crises in an easy-to-understand way by examining four deficits before the nation: the budget deficit, personal savings deficit, trade deficit and leadership deficit.
Called by Reuters “an ‘Inconvenient Truth’ for the U.S. economy,” Wiggin hopes the book and film will help Americans “rethink what they expect from their government, and by extension, how they plan for their own future.”
To order a copy of “I.O.U.S.A.,” or view a 30-minute version of the film, visit http://www.iousathemovie.com/.
Friday, February 13, 2009
Overheard @: Benefits attorney opposes exec pay cap
While some -- I admit, myself included -- hailed President Obama's recent edict that executives at companies receiving federal bailout money will have their compensation capped at $500,000, not everyone thinks the limits are a good idea.
Perhaps you're thinking, surely I jest? But no, Edward R. Rayner, a partner in the employee benefits and executive compensation practice at Katten Muchin Rosenman LLP in New York, says these limits may actually further harm the U.S. financial system.
"While at first glance, this may appear to be an important crackdown on the greed of recent years, the fact that the $500,000 cap only applies to companies accepting U.S. bailout money is a huge issue," Mr. Rayner says. "This opens the door for foreign institutions not subject to these compensation limits to quite easily and relatively cheaply, steal our best financial talent. Once this talent is gone, it will be extremely difficult to get back, and I expect that this will significantly weaken the U.S. financial industry."
Amid the deepest economic recession in decades, with millions jobless, Rayner is opposed to capping the pay of bank execs that are relying on taxpayer dollars to re-stabilize their institutions? What do you think? Do you agree or disagree with Rayner? Comment and let me know.
Perhaps you're thinking, surely I jest? But no, Edward R. Rayner, a partner in the employee benefits and executive compensation practice at Katten Muchin Rosenman LLP in New York, says these limits may actually further harm the U.S. financial system.
"While at first glance, this may appear to be an important crackdown on the greed of recent years, the fact that the $500,000 cap only applies to companies accepting U.S. bailout money is a huge issue," Mr. Rayner says. "This opens the door for foreign institutions not subject to these compensation limits to quite easily and relatively cheaply, steal our best financial talent. Once this talent is gone, it will be extremely difficult to get back, and I expect that this will significantly weaken the U.S. financial industry."
Amid the deepest economic recession in decades, with millions jobless, Rayner is opposed to capping the pay of bank execs that are relying on taxpayer dollars to re-stabilize their institutions? What do you think? Do you agree or disagree with Rayner? Comment and let me know.
Thursday, February 12, 2009
News You Can Use: Workers fear losing retirement savings
Employees aren't immune to the news reports of millions of Americans losing trillions of dollars in collective retirement income, and the news that increasing numbers of organizations are freezing their retirement plans, suspending matching contributions or both is heightening anxiety about their futures.
A new survey by Workplace Options finds that 59% of employees are concerned that money from their pensions and 401(k)s won't be there when they need it.
Dean Debnam, Workplace Options CEO says the worry causes a vicious cycle, as layoffs beget financial worries that decrease job performance and put employees in the line of fire for layoffs. "This, coupled with financial worries, can spell disaster for a worker's emotional and physical wellbeing, as well as overall productivity."
Even if your company is suspended its matching contributions -- which I strongly advise against -- or otherwise making retirement plan cutbacks, be sure to communicate with employees in a way that doesn't send them into a tailspin. Click here to listen to our podcast with communications expert Dennis Ackley and read the accompanying article, “Softening the blow of bad benefits news,” in the February EBN.
A new survey by Workplace Options finds that 59% of employees are concerned that money from their pensions and 401(k)s won't be there when they need it.
Dean Debnam, Workplace Options CEO says the worry causes a vicious cycle, as layoffs beget financial worries that decrease job performance and put employees in the line of fire for layoffs. "This, coupled with financial worries, can spell disaster for a worker's emotional and physical wellbeing, as well as overall productivity."
Even if your company is suspended its matching contributions -- which I strongly advise against -- or otherwise making retirement plan cutbacks, be sure to communicate with employees in a way that doesn't send them into a tailspin. Click here to listen to our podcast with communications expert Dennis Ackley and read the accompanying article, “Softening the blow of bad benefits news,” in the February EBN.
Wednesday, February 11, 2009
News You Can Use: As costs increase, dental utilization decreases
Here's more evidence that cost-cutting can lead to scrimping on important health care services. EBA reports that a in recent Delta Dental Plans Association poll of 900 dental care consumers age 25 and older, 83% of benefit plan participants visit their dentist twice or more a year versus 63% of those who pay for their treatment out of pocket.
While 88% of the respondents received employer-paid dental care, 12% paid for voluntary benefits coverage. One troubling statistic that the nonprofit group noted in its 2008 Community Benefit Annual Report is that there are more than 3,700 locations across the U.S. without enough dental health professionals to help serve an estimated 46 million Americans.
EBN's February report, "Chipped teeth," further explores how cost-cutting and the recession are affecting dental benefits offerings and usage.
While 88% of the respondents received employer-paid dental care, 12% paid for voluntary benefits coverage. One troubling statistic that the nonprofit group noted in its 2008 Community Benefit Annual Report is that there are more than 3,700 locations across the U.S. without enough dental health professionals to help serve an estimated 46 million Americans.
EBN's February report, "Chipped teeth," further explores how cost-cutting and the recession are affecting dental benefits offerings and usage.
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