- Functional Categories of Employee Benefits
- The Employee Benefits Environment
- Employee Benefits under Adverse Economic Conditions
- Strategic Considerations in Designing Employee Benefit Programs
- The Integrated Systems Approach to Employee Benefits Planning
- The Cost Dimension
- Key Concepts in This Chapter
This chapter is from the book
This chapter is from the book
This chapter is from the book
Employee Benefits under Adverse Economic Conditions
It has been observed that during the recent economic recession, employees valued their benefits more than ever. Behavior shifts and modifies during tough economic times, and as a result, certain decisions are modified. For instance, workers become much more hesitant to leave work for extended periods of time, such as for a vacation or because of illness. If employees do leave, such as for maternity or adoption leave, they will return sooner than expected.
In addition, employees are often more willing to pay more for premiums and accept higher deductibles, in hopes of preserving the most desired of all benefits: medical coverage. It has been found that if this benefit is tinkered with, employee dissatisfaction peaks, to the point where they have gone on record to state that they would seek alternative employment if their medical benefits were curtailed or, worse, eliminated entirely.
Furthermore, in such economic turmoil, employees are more willing to entertain reductions in salary, or even forfeit bonus payments, so as to leave benefits at their current levels. Also, a majority have agreed to forego raises in cash compensation to preserve benefits.
Because of these facts, employers would be wise to keep employee preferences in mind, as well as satisfaction levels, whenever considering any readjustments or, particularly, cuts to their employees’ benefit programs during an economic downturn. Employee opinion surveys have consistently indicated that negative action by management, with regard to these programs, in such a climate will also dictate how those same employees feel about their employers once the company’s economic situation improves.