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SHRM: Benefits Packages Shrinking

June 27 2011

The economy negatively affected employee benefits offered by more than three-quarters of organizations, according to a Society for Human Resource Management survey report released at its 63rd annual Conference & Exposition in Las Vegas.

Seventy-seven percent of surveyed human resources professionals said the economy has negatively affected benefits to some or to a large extent this year, up from 72 percent in 2010.

In addition, the national survey found that more employers’ benefits packages shifted responsibility to employees for managing retirement savings, leave and healthcare costs.

Such efforts have helped to keep spending on employee benefits stable. Organizations spent an average of 19 percent of an employee’s annual salary on mandatory benefits, like Social Security and workers’ compensation; an additional 19 percent on voluntary benefits; and 11 percent on leave pay benefits. Larger organizations spent more on voluntary benefits than organizations with small staff levels.

“We have seen many cuts to HR benefit budgets over the last three years,” said Mark Schmit, director of research at SHRM. “Organizations have had to be creative to find ways to compensate for the loss of benefits with hard cuts in order to stay competitive in the recruitment and retention of top talent.”

The future of employee benefits includes workplace flexibility benefits, which rose in 2011. More than half of surveyed human resources professionals (53 percent) said their organizations provide flextime as a benefit, up from 49 percent in 2010. Twenty percent offer telecommuting on a full-time basis, an increase from the 17 percent of employers that offered it last year.

The survey included 600 randomly selected HR professionals.

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