June 7, 2010
SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations—Spring 2010 Update
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Introduction
A Comparison of the Financial Challenges to the U.S. and Global Economy poll data from October 2008, March 2009, October 2009 and March 2010.
• In October 2008, SHRM conducted a series of polls that looked at the impact of the financial crisis on companies from a variety of angles. Several of the poll questions were updated in March 2009, October 2009 and March 2010 to determine how business were adjusting their strategies in response to changes in the economy.
• When possible, similar questions and response options from October 2008, March 2009, October 2009 and March 2010 are compared with one another.
• Respondents were also asked to project how their company is likely to proceed in the next six months, assuming that the current financial challenges continue.
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Financial Challenges – Spring 2010 Update| ©SHRM 2010
Changes Organizations Made Within the Past Six Months as a Result of the Financial Challenges to the U.S. and Global Economy
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Financial Challenges – Spring 2010 Update| ©SHRM 2010
Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy.
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Note: In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.
March 2010
(n = 414)
October 2009
(n = 371)
March 2009
(n = 462)
October 2008
(n = 633)
Made budget cuts across the entire organization 67% 73% 71% --
Allowed attrition 65% 63% 63% 72%
Froze employee wage increases 52% 54% 49% 3%
Cut employee bonuses 46% 48% 44% --
Implemented layoffs 43% 52% 47% 48%
Retrained employees for new positions in organization 43% 42% 34% 10%
Implemented hiring freezes (no new hires) 39% 42% 52% 48%
Halted plans for business growth/expansion 32% 37% 42% --
Did not renew contracts with existing contract/temporary/ contingent workers 30% 33% 27% 21%
Outsourced certain business functions 20% 20% 16% --
Hired more contract/temporary/contingent workers than usual 19% 16% 8% 12%
Reduced employee work hours with reduction in pay 18% 18% 20% 17%
March 2010 Compared With October 2009, March 2009 and October 2008
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy (continued).
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March 2010
(n = 414)
October 2009
(n = 371)
March 2009
(n = 462)
October 2008
(n = 633)
Restructured executive compensation and/or executive severance packages (in addition to what may be specified in federal bailout legislation) 13% 15% 18% --
Implemented salary reductions (without reduction in hours) 11% 15% 15% 5%
Offered early retirement to employees 10% 10% 10% 6%
Implemented employee furloughs for select employees without shutting down entire business 10% 10% 9% --
Demoted employees to lower-pay positions as a way to save money 9% 12% 9% --
Offered job sharing 9% 7% 7% 5%
Acquired or merged with another company 9% 6% 6% 9%
Shut down business for short periods of time without paying employees 7% 8% 5% 7%
Introduced full-time telecommuting for employees to save on building and maintenance costs 6% 6% 4% --
Reduced organization wide workweek with no reduction in pay 5% 7% 6% --
Had been acquired by or merged with another company 3% 2% 3% --
Note: In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.
March 2010 Compared With October 2009, March 2009 and October 2008
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy.
• Retrained employees for new positions in organization: Public owned for-profit organizations (60%) were more likely to report retraining employees for new positions in their organization than were privately owned for -profit (40%) organizations. Medium-staff-sized organizations (49%) also were more likely to report retraining employees for new positions in their organization than were small-staff-sized organizations (32%).
• Allowed attrition: Large- (76%) and medium-staff-sized organizations (67%) were more likely to report that they allowed attrition than were small-staff-sized organizations (48%).
• Did not renew contracts with existing contract/temporary/contingent workers : Large-staff-sized organizations (40%) were more likely to report that they did not renew contracts with existing contract/temporary/contingent workers compared with medium-staff-sized organizations (23%).
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Comparison by Organization’s Sector and Staff Size
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Has your organization reduced employee benefits offerings within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy?
March 2010 (n = 397) October 2009 (n = 339) March 2009 (n = 465) October 2008 (n = 633)0%
10%
20%18%
19%17%
10%
Yes
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Note: In October 2008, respondents indicated changes occurring in the past 12 months.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
What employee benefits offerings has your organization reduced, frozen or eliminated within the PAST SIX MONTHS due to the financial challenges to the U.S. and global economy? (March 2010)
Paid personal days only
Paid sick time only
Paid vacation time only
Defined benefit pension plan
Workplace flexibility benefits (e.g., telecommuting, flex time, compressed workweeks)
Employer match to the defined contribution retirement savings plan (e.g., 401 (k))
Paid time off (includes sick, vacation and personal days all in one plan)
The amount of employee leave carryover from one year to the next
The amount of employee leave accruals/balances
Company-paid relocation programs
Health care coverage for spouses/dependents
Health care coverage for employees
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
13%
15%
27%
38%
46%
48%
53%
53%
56%
70%
70%
75%
74%
77%
67%
48%
36%
33%
40%
40%
36%
23%
26%
23%
13%
8%
6%
14%
18%
20%
7%
7%
8%
7%
4%
2%
Reduced Frozen Eliminated completely
8
Note: n = 72. Only respondents who indicated that their organizations had reduced employee benefits answered this question. “Reduced” is defined as “decreased scope and/or amount of benefits offerings from prior levels.”“Frozen” is defined as “benefits offering still exists, but no additional funds are being invested, no new employees are eligible for the benefit.”“Eliminated completely” is defined as “the benefit no longer exists.” “Not applicable” responses were excluded from this analysis. Percentages may not total 100% due to rounding.
Of the 18% of companies that reduced benefits offerings:
Financial Challenges – Spring 2010 Update| ©SHRM 2010
What employee benefits offerings has your organization reduced within the PAST SIX MONTHS due to the financial challenges to the U.S. and global economy?
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March 2010
(n = 72)
October 2009
(n = 46)
March 2009
(n = 47)
Health care coverage for employees 75% 85% 78%
Health care coverage for spouses/dependents 70% 84% 72%
Company-paid relocation programs 70% 58% 55%
The amount of employee leave accruals/balances 56% 64% 35%
The amount of employee leave carryover from one year to the next 53% 59% 57%
Paid time off (includes sick, vacation and personal days all in one plan) 53% 47% 44%
Employer match to defined contribution retirement savings plan (e.g., 401 (k)) 48% 67% 47%
Workplace flexibility benefits (e.g., telecommuting, flex time, compressed workweeks)
46% 70% 33%
Defined benefit pension plan 38% 33% 27%
Paid vacation time only 27% 14% 40%
Paid sick time only 15% 29% 31%
Paid personal days only 13% 13% 27%
Note: Table represents “reduced” responses.
March 2010 Compared With October 2009 and March 2009
Financial Challenges – Spring 2010 Update| ©SHRM 2010 10
March 2010
(n = 314)
October 2009
(n = 341)
March 2009
(n = 403)
October 2008
(n = 633)
Travel costs (excluding per diem) related to professional development* 52% 58% 47% -
Morale- and team-building activities 45% 49% 51% 57%
Recruitment-related advertising, travel and reliance on paid recruiters 35% 47% 56% 51%
Professional development for employees 34% 37% 37% 44%
Reduction in per diem allowance for travel and entertainment 28% 23% 26% 19%
Refreshments/snacks for employees 27% 32% 33% 36%
All-staff training on general topics that are not specifically related to company's core business 24% 28% 28% 39%
Spot awards 23% 30% 32% 16%
HR-related technology (e.g., applicant tracking and payroll systems) 14% 14% 18% 23%
Tuition reimbursement/education assistance 14% 20% 18% 11%
Discretionary legal advice 13% 15% 20% 13%
Volunteer and philanthropic activities 12% 13% 16% 15%
Recruitment initiatives specifically related to increasing diversity of company's workforce 12% 15% 18% 10%
Fitness and stress management initiatives 12% 16% 13% 13%
Environmental initiatives (e.g., recycling campaigns) 8% 6% 8% 4%
Transit and parking subsidies 7% 7% 6% 2%
Please identify if your company has made cuts in each of the following areas in the PAST SIX MONTHS.March 2010 Compared With October 2009, March 2009 and October 2008
Note: In October 2008, respondents selected the top five changes that occurred in the past 12 months. Percentages do not total 100% as respondents were allowed to select multiple response options.“Not applicable” responses were excluded from this analysis. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data. * indicates that this particular option was not asked in October 2008.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Actions Organizations Are Likely to Take in the Next Six Months, Assuming the Current Financial Challenges to the U.S. and Global Economy Continue
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Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS?
Implement employee furloughs for select employees without shutting down entire business
Restructure executive compensation/severance packages
Outsource certain business functions
Reduce employee benefits offerings
Retrain employees for new positions in organization
Halt plans for business growth/expansion
Implement layoffs
Not renew contracts with existing contract/temporary/contingent workers
Implement hiring freezes (no new hires)
Cut employee bonuses
Make budget cuts across entire organization
Allow attrition
Freeze employee wage increases
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
66%
44%
36%
35%
21%
33%
32%
23%
23%
20%
16%
18%
22%
22%
36%
31%
34%
30%
34%
33%
29%
29%
28%
26%
18%
26%
8%
15%
27%
25%
39%
21%
22%
30%
28%
32%
38%
41%
27%
4%
5%
6%
6%
10%
12%
13%
18%
20%
20%
20%
23%
25%
Not all likely Somewhat unlikely Somewhat likely Very likely
12
Note: n = 384. Percentages may not total 100% due to rounding.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS? (continued)
Go out of business
Introduce full-time telecommuting for employees to save on building and maintenance costs
Demote employees to lower-paying positions as a way to save money
Be acquired or merge with another company
Reduce organizationwide workweek with no reduction in pay
Offer job sharing
Shut down business for short periods of time without paying employees
Reduce employee work hours with reduction in pay
Implement employee furloughs for select employees without shutting down entire business
Offer early retirement to employees
Implement salary reductions (without reductions in hours)
Acquire or merge with another company
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
86%
75%
61%
79%
68%
56%
70%
59%
66%
61%
54%
70%
11%
17%
29%
13%
22%
29%
19%
27%
22%
26%
32%
13%
3%
6%
8%
6%
7%
11%
7%
10%
8%
8%
9%
11%
0%
2%
2%
2%
3%
4%
4%
4%
4%
5%
5%
6%
Not all likely Somewhat unlikely Somewhat likely Very likely
13Note: n=384. Percentages may not total 100% due to rounding.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS?
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March 2010
(n = 387)
October 2009
(n = 371)
March 2009
(n = 462)
October 2008
(n = 633)
Freeze employee wage increases 25% 33% 37% 18%
Allow attrition 23% 29% 40% --
Make budget cuts across entire organization 20% 34% 43% 32%
Cut employee bonuses 20% 32% 32% 21%
Implement hiring freezes (no new hires) 20% 23% 40% 26%
Not renew contracts with existing contract/temporary/contingent workers 14% 18% 19% --
Implement layoffs 13% 21% 24% 16%
Halt plans for business growth/expansion 12% 16% 20% --
Retrain employees for new positions in organization 10% 13% 10% --
Hire more contract/temporary/contingent workers than usual 9% 5% 3% --
Reduce employee benefits offerings 6% 13% 5% --
Outsource certain business functions 6% 9% 6% 3%
Implement salary reductions (without reductions in hours) 5% 6% 8% --
Note: Table represents “very likely” responses. In October 2008, respondents indicated changes occurring in the next 12 months. Where possible, March 2010 data are compared with October 2009 , March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.
March 2010 Compared With October 2009, March 2009 and October 2008
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS? (continued)
15
March 2010
(n = 387)
October 2009
(n = 371)
March 2009
(n = 462)
October 2008
(n = 633)
Acquire or merge with another company 5% 6% 2% --
Offer early retirement to employees 5% 6% 5% --
Reduce employee work hours with reduction in pay 4% 6% 7% --
Shut down business for short periods of time without paying employees 4% 6% 4% --
Restructure executive compensation/severance packages 4% 8% 9% 5%
Implement employee furloughs for select employees without shutting down entire business 4% 8% 5% --
Reduce organizationwide workweek with no reduction in pay 3% 5% 4% --
Be acquired or merged with another company 2% 4% 1% --
Offer job sharing 4% 4% 4% --
Demote employees to lower-paying positions as a way to save money 2% 3% 3% --
Introduce full-time telecommuting for employees to save on building and maintenance costs 2% 3% 3% --
Go out of business 1% 2% 1% --
March 2010 Compared With October 2009, March 2009 and October 2008
Note: Table represents “very likely” responses. In October 2008, respondents indicated changes occurring in the next 12 months. Where possible, March 2010 data are compared with October 2009 , March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, which employee benefits offerings is your organization likely to reduce, freeze or eliminate in the NEXT SIX MONTHS?
Paid sick time only
Paid vacation time only
Paid personal days only
Company-paid relocation programs
The amount of employee leave carryover from one year to the next
Workplace flexibility benefits (e.g., telecommuting, flex time, compressed workweeks)
Paid time off (includes sick, vacation and personal days all in one plan)
The amount of employee leave accruals/balances
Employer match to the defined contribution retirement savings plan (e.g., 401 (k))
Defined benefit pension plan
Health care coverage for employees
Health care coverage for spouses/dependents
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
23%
32%
39%
44%
47%
51%
52%
53%
56%
61%
79%
81%
77%
68%
61%
46%
46%
46%
48%
44%
34%
39%
20%
18%
0%
0%
0%
10%
7%
3%
0%
3%
9%
0%
1%
1%
Reduce Freeze Eliminate completely
16
Note: n = 52.Only respondents who indicated that their organizations were likely to reduce employee benefits answered this question. “Reduce” is defined as “decreased scope and/or amount of benefits offerings from prior levels.”“Freeze” is defined as “benefits offering still exists, but no additional funds are being invested, no new employees are eligible for the benefit.”“Eliminate completely” is defined as “the benefit no longer exists.” “Not applicable” responses were excluded from this analysis. Percentages may not total 100% due to rounding.
Of the 31% of companies that indicated they were likely (“very likely” or “likely”) to reduce benefits offering in the next six months:
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following areas to experience cuts in the NEXT SIX MONTHS, if they have not already been cut?
Discretionary legal advice
HR-related technology (e.g., applicant tracking and payroll systems)
Environmental initiatives
All-staff training on general topics that are not specifically related to company's core business
Recruitment initiative specifically related to increasing diversity of your workforce
Professional development for employees
Volunteer and philanthropic activities
Tuition reimbursement/education assistance
Refreshments/snacks for employees
Per diem allowance for travel and entertainment
Fitness and stress management initiatives
Travel costs (excluding per diem) related to professional development
Spot awards
Recruitment-related advertising, travel and reliance on paid recruiters
Morale- and team-building activities
Transit and parking subsides
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
41%
42%
44%
35%
42%
29%
45%
44%
35%
27%
43%
23%
36%
30%
25%
46%
37%
33%
33%
29%
29%
30%
28%
24%
30%
29%
24%
26%
26%
24%
27%
18%
15%
17%
15%
27%
17%
28%
14%
18%
20%
28%
17%
34%
19%
27%
28%
12%
7%
8%
9%
9%
12%
13%
13%
14%
15%
16%
16%
17%
19%
19%
20%
24%
Not all likely Somewhat unlikely Somewhat likely Very likely
17Note: n = 356. Percentages may not total 100% due to rounding.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Within the PAST SIX MONTHS, has your organization hired back any employees who were previously laid off due to the financial challenges to the U.S. and global economy?
October 2009 (n = 288)
March 2010 (n = 211)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
70%
55%
30%
45%
No, we have not rehired employees who were laid off Yes, we've rehired employees who were laid off
18Note: n = 288
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Industry
Industry
Manufacturing 18%
Health care, social assistance (e.g., nursing homes, EAP providers) 13%
Services—professional, scientific, technical, legal, engineering 8%
Educational services/education 6%
Financial services (e.g., banking) 6%
Other services (e.g., nonprofit, church/religious organizations) 5%
Retail/wholesale trade 5%
Transportation, warehousing (e.g., distribution) 5%
Insurance 5%
Construction, mining, oil and gas 4%
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Note: n = 367. Percentages may not total 100% due to rounding.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Industry (continued)
Industry
Government/public administration—federal, state/local, tribal 4%
Consulting 4%
High-tech 3%
Arts, entertainment, recreation 3%
Utilities 3%
Services—accommodation, food and drinking places 2%
Telecommunications 2%
Association—professional/trade 1%
Publishing, broadcasting, other media 1%
Pharmaceutical 1%
Real estate, rental, leasing 1%
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Note: n=367. Percentages may not total 100% due to rounding.
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Sector
Other
Government sector
Publicly owned for-profit organization
Nonprofit organization
Privately owned for-profit organization
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1%
5%
19%
23%
52%
21
Note: n= 365
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Staff Size
Small (1-99 employees) Medium (100-499 employees) Large (500 or more employees)0%
10%
20%
30%
40%
50%
28%
40%
32%
22
Note: n = 300
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Region
Northeast
West
South
Midwest
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
17%
25%
28%
30%
23
Note: n = 306
Financial Challenges – Spring 2010 Update| ©SHRM 2010
Demographics: Organization Operations Location
Primarily nationally based
Primarily state-based Primarily locally based Primarily multinationally based
0%
10%
20%
30%
40%
50%45%
18%20%
17%
24
Note: = 362
Financial Challenges – Spring 2010 Update| ©SHRM 2010
SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations – Spring 2010 Update
• Response rate = 16%• Sample comprised of 419 randomly selected HR
professionals from SHRM’s membership• Margin of error is +/- 5 • Survey fielded March 30 - April 13, 2010
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Methodology