Employees more responsible for retirement savings, leave benefits
The economy negatively affected the employee benefits offered by more than three-quarters of organizations, according to a report by the Society for Human Resource Management (SHRM) in the United States.
Seventy-seven per cent of the 600 HR professionals surveyed said the economy negatively affected benefits to some or to a large extent in 2011, an increase from 72 per cent in 2010, found the 2011 Employee Benefits Research Report.
More employers offered benefits that put responsibility on employees for managing retirement savings, leave and health-care costs.
Health savings accounts (HSAs) are gaining in popularity as a health-care benefit. In 2011, 35 per cent of organizations provided HSAs, up from 29 per cent in 2007.
Most businesses (93 per cent) offer defined contribution (DC) retirement savings plans for retirement savings, more than those that offer defined benefit pension plans (22 per cent) and formal phased retirement programs (five per cent). Although employees are more responsible for managing retirement savings, 42 per cent of employers provide individual investment advice and 37 per cent supply retirement preparation planning advice.
“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 increased in 2011. More than one-half of surveyed HR professionals (53 per cent) said their organizations provide flex-time as a benefit, up from 49 per cent in 2010. Twenty per cent offer telecommuting on a full-time basis, an increase from 17 per cent last year.
“The addition of workplace flexibility programs has been one of the primary tactics organizations are using to offset the benefit losses,” Schmit said. “These programs can have positive outcomes for both the employees and the organization.”
Employer spending on employee benefits remained stable this year. Organizations spent an average of 19 per cent of an employee’s annual salary on mandatory benefits, like social security and workers’ compensation, found the report. Employers spent an additional 19 per cent on voluntary benefits and 11 per cent on leave pay benefits.
Larger organizations spent more on voluntary benefits than organizations with small staff levels.
