Survey: Bosses try to preserve perks

CHICAGO, ILL.
October 20, 2008 7:51am

The weak economy is taking an increasingly heavy toll on jobs, with announced workforce reductions up 30 percent from a year ago. However, despite the need to cut costs, a new survey finds that a majority of companies are doing whatever it takes to preserve the perks their employees have grown to value.

Surprisingly, many are still even planning to hand out year-end bonus checks.

The survey, released Monday by outplacement and executive coaching firm Challenger, Gray & Christmas Inc., found that 57 percent of companies have been able to retain their existing perks. Another 10 percent are considering cuts in their perks packages, but have taken no action as yet.

Only 20 percent of companies have had to cut or eliminate perks as part of their cost-containment measures, according to the survey. About 35 percent of these companies were compelled to cut perks in order to save jobs.

The Challenger survey was conducted the week of October 6 among approximately 100 human resource executives in a variety of industries nationwide.

In addition to maintaining existing perks, the Challenger survey found that 50 percent of companies plan to award year-end bonuses this year. Only 4 percent said the plan to reduce the size of bonus checks, while 23 percent said bonuses will be about the same as last year.

“The weakened economy has led to heavy downsizing. Through September, employers have announced plans to cut 763,090 jobs according to our tallies. However, even amid the slowdown, there is the need for organizations to continue focusing on recruitment and retention in an effort to build bench strength and prepare for the likely return of labor shortages when the economy recovers,” says John Challenger, chief executive officer of Challenger, Gray & Christmas.

A survey of 607 human resource executives conducted by BNA, a business research and publish firm in Arlington, Virginia, and back office outsourcing provider ADP found that, despite the softer economy, 34 percent identified recruitment and retention as their top priority.

“Companies that eliminate year-end bonuses and perks or cut them to the bone will probably discover that employee loyalty and productivity are greatly diminished. Employers may not see the impact during the downturn, when it is more difficult for unhappy workers to leave for greener pastures, but they will feel it when the economy improves,” says Mr. Challenger.

He says 35 percent of the human resource executives surveyed by Challenger who said that their companies were not cutting perks indicated that they utilized low-cost perks, which precluded the need for cutbacks.

“Offering amenities such as casual work attire, early dismissal on Fridays during the summer, and pet-friendly offices are just a few examples of perks that are extremely popular among workers and, because they add no costs to the bottom line, companies are not forced to cut them in rough times,” says Mr. Challenger.

“Low-cost incentives can go a long way in building employee morale. Money is not the only or even single most important factor in whether an employee is happy with their job. Factors like work environment and flexible schedules as well as career advancement and promotional opportunities contribute heavily to job satisfaction,” says Mr. Challenger.