Poll Shows Nearly Three Quarters of Employers Preparing for Possible Budget Cuts

Seventy percent of HR professionals feel budget cuts across entire organizations are likely if current challenges to the U.S economy continue, according to a nationwide survey released by the Society for Human Resource Management (SHRM). More than half (55 percent) of the respondents said hiring freezes are also likely under those same circumstances.

"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."

The poll asked nearly 450 HR professionals what actions related to employee investments and retirement planning their organizations are most likely to take in the coming months if there are no reversals in the current downward economic trends. Eighty-three percent said they would consider providing employees with financial educational literature and/or workshops by investment specialists. Another 21 percent said they might revise investment policies for 401(k) plans and other savings programs. Only 11 percent said they might change investment management companies, and seven percent said they would consider offering employees investment options other than 401(k) plans. Six percent said they might suspend investments in mutual funds that are deemed risky.

In addition to organization-wide budget cuts and hiring freezes, HR professionals said cutting bonuses (50 percent), freezing wage increases (45 percent), and layoffs (39 percent) 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 percent), and outsourcing some business functions (79 percent) were only "somewhat" or "not as likely" to be taken under the same circumstances.

Reprinted with permission. © CCH
(Submitted Nov. 2008)

Poll Shows Nearly Three Quarters of Employers Preparing for Possible Budget Cuts Seventy percent of HR professionals feel budget cuts across entire organizations are likely if current challenges to the U.S economy continue, according to a nationwide survey released by