During Tough Times, Companies Can’t Afford to Be Penny Wise, Talent Foolish

During Tough Times, Companies Can’t Afford to Be Penny Wise, Talent Foolish

New survey reveals that salary & bonus plans are frequent casualties of economic challenges

MARLBOROUGH, Mass. (May 5, 2009) – According to the latest research conducted by Workscape, Inc., a leading provider of outsourced benefits and talent management solutions, and the Human Capital Institute (HCI), a professional association and think-tank advancing the science of strategic talent management, when it comes to tightening the belt, all options are on the table for most companies.

From cessation or reduction of salary increases to hiring freezes and layoffs, companies are hitting their employees where it hurts the most – in the wallet. The research issued by Workscape and HCI shows that of the 300+ respondents, 60% of companies have stopped providing salary increases altogether or have reduced the amount of the salary increases being given. In addition, 40% have laid off low performing workers and 37% have stopped providing bonuses or have reduced bonus amounts.

During their research, HCI and Workscape also found that 48% of companies were planning for zero merit increases in 2009. While these actions may be necessary during this turbulent economy, making the wrong decisions on layoffs and compensation cutbacks can put a company at a serious competitive disadvantage, according to Workscape.

“Companies need to ensure that top performers and high-potentials aren’t lost during workforce and compensation reduction efforts. Organizations also need to recognize the value of the employees who remain behind and ensure that they continue to be motivated and appropriately recognized for their accomplishments,” commented Tony Marzulli, Workscape’s Chief Marketing Officer. “When faced with a reduction or elimination in the ‘traditional’ means of rewarding and retaining employees, employers need to get creative.”

To this end, the ability to present employees with “total rewards” or “total compensation” statements – online or printed statements which define the total value of an employee’s compensation, including all benefits paid by the employer as well as salary and bonuses – is becoming an increasingly popular practice in an effort to aid retention and foster employee engagement, even in a depressed market. Total rewards statements – especially those that give employees the ability to view benefits and compensation under a single domain online and on-demand – can be valuable engagement tools because employees gain a greater appreciation of their complete compensation package.

Marzulli added, “The economy will rebound eventually and when that happens, the companies that will not only survive but thrive will be those that commit to offering the tools and solutions that provide a clearer vision of how the company and its employees can succeed together in any economy.”

Workscape helps organizations to reduce costs and improve employee engagement by providing comprehensive talent management and outsourced benefits administration solutions, including a wide range of Web-based, self-service applications, as well as robust decision support tools, powerful reporting and analytics, and access to world-class employee communications and ongoing support services.

About Workscape
Workscape is a leading provider of business-critical HR solutions that enable hundreds of organizations to manage their two largest workforce expenditures: employee benefits and performance-driven compensation. Workscape’s offerings share a common technology platform, can be readily integrated with existing IT investments, serve millions of employees and are scalable and configurable to meet the distinct requirements of organizations ranging from 1,000 to over 500,000 employees. One client uses the company's award-winning multi-lingual compensation solution to compensate hundreds of thousands of employees across 70 countries. Workscape’s outsourced benefits administration offerings are backed by U.S.-based 24/7 support for managers and employees on policies and processes. For more information about Workscape, visit www.workscape.com or call 888-605-9620.