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 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.
Surprisingly, only 20 percent of companies have had to cut or eliminate perks as part of their cost-containment measures. About 35 percent of these companies were compelled to cut perks in order to save jobs.
In addition to holding on to perks, 50 percent of companies plan to give out year-end bonuses. Only four percent said the plan to reduce the size of bonus checks, while 23 percent said bonuses will be about the same as last year.
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.
Some companies learned this lesson the hard way following the 2001 recession and subsequent jobless recovery that lasted well into 2003. Other companies learned that they can provide perks that are highly valued by employees, yet cost the company very little, if not nothing.
In fact, 35 percent of the human resource executives surveyed 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.
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.
Are your companies paring back perks? What do you see going on?