Employers Bearish on Benefit Budgets September 25, 2009
By Sarah Knapp
Employee benefit packages have come under greater scrutiny, according to new findings from Prudential Financial, Inc.
The report, A New Day in Employee Benefits-Plan Sponsors Change Priorities, found that 54 percent of companies have kept their 2009 benefits budgets the same as the year prior or decreased them.
The 15 percent of companies that slashed their benefits budgets did so by an average of 16 percent. The companies that were impacted the most by recession said they will continue to reduce their benefits staff for the next five years.
Besides downsizing, the use of technology and the promotion of workforce health are projected to be the most important objectives for control and reduction of benefits costs. Even though these budgeting strategies are currently seen as "more urgent," the study pointed out that there has been a gradual trend of employers looking to contain benefits costs, per the report.
Prudential's vice president of market research, Gene Lanzoni, that benefits budget changes are occurring in conjunction with a current "back to basics" attitude of employees, whereby job security and making ends meet have become more important than, for example, health insurance or retirement savings.
Lanzoni said, in order to keep benefits packages appealing, companies are looking to expand voluntary benefits options as voluntary benefit enrollment has been on the increase.
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