Layoffs, wage freezes and cutting bonuses all possible in economic downturn
The majority of HR professionals feel wide-spread budget cuts and hiring freezes are likely if current challenges to the United States economy continue, according to a recent survey.
Changes Organizations Have Made in Light of 2008 Financial Challenges to the U.S. Economy, conducted by the Society for Human Resource Management (SHRM) in Alexandria, Va., found 70 per cent of 450 HR professionals surveyed think there will be organization-wide budget cuts if the economy doesn't improve. More than one-half (55 per cent) of respondents also said hiring freezes are likely.
“Today’s ever-changing and competitive business environment is placing unprecedented responsibilities on HR professionals,” said Steve Williams, director of research for SHRM. “The 2008 hiring landscape has been weak, yet it’s more important than ever for organizations to compete for and retain the best talent. It’s HR who’s going to tell them what workers want today, what keeps them happy, and what makes them stay.”
In addition to organization-wide budget cuts and hiring freezes, HR professionals said cutting bonuses (50 per cent), freezing wage increases (45 per cent), and layoffs (39 per cent) are “likely” actions that might be taken should economic conditions worsen.
On the flip side, respondents said restructuring executive compensation and/or severance packages (82 per cent), and outsourcing some business functions (79 per cent) were only “somewhat” or “not as likely” to be taken under the same circumstances.
With the stock market taking a beating, 83 per cent of respondents said they would consider providing employees with financial educational literature and/or workshops by investment specialists. Another 21 per cent said they might revise investment policies for 401(k) plans and other savings programs.
Only 11 per cent said they might change investment management companies and seven per cent said they would consider offering employees investment options other than 401(k) plans. Six per cent said they might suspend investments in mutual funds that are deemed risky.
Changes Organizations Have Made in Light of 2008 Financial Challenges to the U.S. Economy, conducted by the Society for Human Resource Management (SHRM) in Alexandria, Va., found 70 per cent of 450 HR professionals surveyed think there will be organization-wide budget cuts if the economy doesn't improve. More than one-half (55 per cent) of respondents also said hiring freezes are likely.
“Today’s ever-changing and competitive business environment is placing unprecedented responsibilities on HR professionals,” said Steve Williams, director of research for SHRM. “The 2008 hiring landscape has been weak, yet it’s more important than ever for organizations to compete for and retain the best talent. It’s HR who’s going to tell them what workers want today, what keeps them happy, and what makes them stay.”
In addition to organization-wide budget cuts and hiring freezes, HR professionals said cutting bonuses (50 per cent), freezing wage increases (45 per cent), and layoffs (39 per cent) are “likely” actions that might be taken should economic conditions worsen.
On the flip side, respondents said restructuring executive compensation and/or severance packages (82 per cent), and outsourcing some business functions (79 per cent) were only “somewhat” or “not as likely” to be taken under the same circumstances.
With the stock market taking a beating, 83 per cent of respondents said they would consider providing employees with financial educational literature and/or workshops by investment specialists. Another 21 per cent said they might revise investment policies for 401(k) plans and other savings programs.
Only 11 per cent said they might change investment management companies and seven per cent said they would consider offering employees investment options other than 401(k) plans. Six per cent said they might suspend investments in mutual funds that are deemed risky.
