Employers are emerging from the Great Recession with a different view of compensation and benefits. And, in most cases, that’s a good thing.
Lessons learned in the lean years are being adapted and modified to make organizations stronger in this post-recession landscape. Look for these 11 trends to take a firm hold in 2011:
1. Employee self-service. HR staffs that thinned out during the recession may stay small for quite a while.
Tip: Let employees handle more tasks themselves using automated, web-based systems. Sit down with your benefits providers to see which online processes you’re not taking advantage of. This will leave you more time to focus on strategic activities.
2. The return of the salary negotiations. More than 40% of employers in one survey said they fear their top talent will leave when the economy improves. That’s given workers more leverage during compensation reviews.
In response, half of businesses say they are willing to negotiate 2011 salary increases. The industries most open to negotiation: IT, retail, sales and professional services.
Tip: Remember, it’s legitimate to ask employees to prove they’re worth bigger bucks. Design appraisal processes that ask workers to highlight specific accomplishments and contributions to achieving organizational goals.
3. Love-hate relationship with social media. Facebook, Twitter, LinkedIn and their cousins have become legitimate business tools. HR pros in particular like to recruit via social media.
But companies are tightening up policies on employees’ use of social networking at work. A survey by Internet security firm Webroot found:
- Half of employers don’t allow staff to visit social networks via company computers.
- 30% block access to Twitter.
- 27% prevent access to video-sharing sites like YouTube.
The worry isn’t just about wasted time: One in six IT execs blamed social media sites for computer network infections or malware attacks.
Tip: Work with IT staff to review your computer and Internet policies. Find tips at www.theHRSpecialist.com/socialpolicy.
4. Penny-pinching on pension plans. Employers remain worried about their long-term pension obligations. Some strategies for cutting defined benefit pension costs: higher retirement ages, more years of service before vesting and greater employee contributions. And businesses will continue to get out of the pension business altogether, offering only 401(k)s—often without employer contributions.
5. Focus on long-term care insurance. Last year’s health reform law provides an employer-administered “public option” for long-term care insurance. Plus, aging baby boomers have started considering their long-term care needs.
Tip: Gauge your workforce’s interest in this growing coverage option.
6. Stressed employees. Employees report that their biggest stressor is job security. Even people who held onto their jobs through the downturn continue to struggle balancing spending with the possibility that they could soon be unemployed.
Tip: Bolster your EAP. Offer classes to help employees manage their household budgets.
7. A push to save. Employees continue to skimp on retirement savings to cover day-to-day bills. That worries employers, which are stepping up efforts to encourage employees to save for their golden years.
Tip: Use constant e-reminders to urge employees to tap your retirement plan provider’s web-based planning tools and calculators. Many now use sophisticated behavioral algorithms to tailor saving strategies.
8. Burnout. Employees—and especially managers—continue to forfeit earned time off. They worry that they’ll fall behind if they take vacations—or be perceived as slackers.
Tip: Require employees to use their vacation time. They’ll be more productive after they rest.
9. Co-working. Flextime is now a norm in many workplaces. “Flex place” is next. The growing “co-working center” industry provides rental work space, allowing some employers to save on commercial office space leases.
Tip: Explore co-working centers as an option, especially for frequent travelers and teleworkers who struggle with the isolation of working from home.
10. Voluntary benefits. Employees value optional benefits such as life insurance and insurance for disability, critical illness, accidents and cancer.
A Colonial Life study found that employers believe only life and disability insurance would interest their employees. But employees in the same study said other types of insurance are important to them, especially as they age.
11. Perks in lieu of pay. Voluntary benefits, flexibility and low-cost perks will continue to serve as a salve for stagnant salaries and higher employee health care expenses. Amid cuts in pay and pensions, employers are adding perks such as tuition reimbursement, flextime and telework. They help increase employee satisfaction and reduce turnover.
Tip: Ask employees how they feel about this. You might be surprised. A CareerBuilder survey revealed that many employees are willing to forgo raises in exchange for flexible work hours, training and casual dress codes (see chart below). Likewise, one-time bonuses could take the edge off of the resentment employees might have over recession-induced cuts.
Employers unable to raise pay say they’re most willing to offer:
More flexible work hours 42%
Bonuses 29%
Training 23%
Vacation time 21%
More-casual dress codes 17%
Academic reimbursement 14%
Title change 14%
Source: CareerBuilder survey, 2010
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