Despite a nascent economic recovery, the momentum to reduce employee benefits isn’t waning, according to a new poll by the Society for Human Resource Management.

In the last six months, 20% of employers reported that they reduced employee benefits, the highest level since the fall of 2008. The year SHRM started tracking the recession impact on employers.

Employers continue to scale back on health care coverage for employees (91%) and spouses and dependents (89%), paid relocation programs (55%) and the amount of leave an employee can accrue (54%).

If the economic upswing doesn’t pick up some speed, surveyed participants reported that their organizations will consider the following actions:

  • Allowing attrition (26% “very likely,” 39% “somewhat likely”);
  • Freezing employee wage increases (25% “very likely,” 24% “somewhat likely”);
  • Making budget cuts across the entire organization (21% “very likely,” 36% “somewhat likely”);
  • Cutting employee bonuses (21% “very likely,” 26% “somewhat likely”); and
  • Implementing hiring freezes (16% “very likely,” 30% “somewhat likely”).

On the brighter side, the number of employers that made budget cuts within their organizations dropped to 60% in 2010 from 73% in 2009.
The survey results, outlined in Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations—Fall 2010 Update, show that a third of surveyed employers froze employee wages (39%), cut employee bonuses (38%) and implemented layoffs (36%), down from their highest levels in the fall of 2009.

Also, in the past six months, 38% of organizations have re-hired employees laid off due to the recession. SHRM conducted the poll from Nov. 8, 2010 to Jan. 13, 2011 and it involved 405 HR professionals.

"Organizations are responding to minor improvements in the economy by reinstating employee wage increases and bonuses, which shows that they are invested in keeping their workforce intact,"  says Evren Esen, manager of SHRM’s Survey Research Center. "Fewer organizations have hiring freezes and layoffs, both signs that some job growth is occurring," she adds.

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