Economy Negatively Impacted Employee Benefits More in 2011

Jun 26, 2011

Employers increasingly turn over responsibility for managing retirement, leave and health care benefits to employees

LAS VEGAS — The economy negatively affected the employee benefits offered by more than three-quarters of organizations, according to a Society for Human Resource Management (SHRM) survey report released today at its 63rd Annual Conference & Exposition in Las Vegas.

Seventy-seven percent of surveyed HR professionals said in 2011 that the economy negatively affected benefits to some or to a large extent, an increase from 72 percent in 2010, SHRM’s 2011 Employee Benefits Research Report showed.

In addition, the national survey found that more employers offered benefits that put responsibility on employees for managing retirement savings, leave and health care costs.

The majority of organizations (84 percent) provide a preferred provider organization (PPO) for employee health care, with only a third of employers using health maintenance organizations (HMOs). Health savings accounts (HSAs) are gaining in popularity as a health care benefit. In 2011, 35 percent of organizations provided HSAs, up from 29 percent in 2007.

Most businesses (93 percent) offer defined contribution retirement savings plans for retirement savings, more than those that offer defined benefit pension plans (22 percent) and formal phased retirement programs (5 percent). Although employees are more responsible for managing retirement savings, 42 percent of employers provide individual investment advice and 37 percent supply retirement preparation planning advice.

“We have seen many cuts to HR benefit budgets over the last three years,” said Mark J. Schmit, director of research at SHRM. “Organizations have had to be creative to find ways to compensate for the loss of benefits with hard cuts in order to stay competitive in the recruitment and retention of top talent.”

The future of employee benefits includes workplace flexibility benefits, which increased in 2011. More than half of surveyed HR professionals (53 percent) said their organizations provide flextime as a benefit, up from 49 percent in 2010. Twenty percent offer telecommuting on a full-time basis, an increase from the 17 percent of employers that offered it last year.

“The addition of workplace flexibility programs has been one of the primary tactics organizations are using to offset the benefit losses,” Schmit said. “These programs can have positive outcomes for both the employees and the organization.”

Employer spending on employee benefits remained stable this year. Organizations spent an average of 19 percent of an employee’s annual salary on mandatory benefits, like Social Security and workers’ compensation. Employers spent an additional 19 percent on voluntary benefits and 11 percent on leave pay benefits. Larger organizations spent more on voluntary benefits than organizations with small staff levels.

The survey of 600 randomly selected HR professionals examines 284 benefits. Among other findings:

  • Since 2007, elder care referral services, adoption assistance and foster care assistance have declined. Most other family-friendly benefits have remained stable.
  • Sixteen percent of organizations offered some form of domestic partner benefits other than health care. Fourteen percent of organizations offered same-sex domestic partner benefits, excluding health care, the same number that provided opposite-sex domestic partner benefits.
  • In the past five years, housing and relocation benefits experienced significant declines, including temporary relocation benefits (25 percent in 2011 vs. 42 percent in 2007) and location visit assistance (18 percent in 2011 compared with 40 percent in 2007).
  • Forty-nine percent of employers offer retirement savings and planning benefits to part-time employees; 84 percent offer those benefits to full-time employees.
  • The percentage of organizations offering bariatric coverage for weight loss has increased dramatically — from 16 percent in 2007 to 36 percent in 2011.
  • Six percent of organizations allow employees to take pets to work, while one percent allow them to bring their babies to work.

Colonial Life, based in Columbia, South Carolina, is the exclusive sponsor of the SHRM 2011 Employee Benefits survey report.

SHRM’s annual Employee Benefits Research Report helps HR professionals to see benefits trends. It is an important informational tool for We Know Next, a resource SHRM launched about a year ago, where business executives, policymakers and human resource professionals can explore and discuss the latest trends shaping the future of work. A revamped, launched to coincide with SHRM’s 2011 Annual Conference & Exposition, includes the new “Next” blog, the latest workforce trends, expert commentary and public policy information.

WeKnowNext.comis a forum for businesses to explore many of the trends noted in the SHRM 2011 Employee Benefits survey report, from adopting practices such as family-friendly benefits, flexible working benefits, and paid time off plans appealing to employees and helping employers attract and retain talent.

For more information, visit the research section of at Follow SHRM Research on Twitter @SHRM_Research.

About the Society for Human Resource Management

The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 250,000 members in more than 140 countries, the Society serves the needs of HR professionals and advances the interests of the HR profession. Founded in 1948, SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China and India. Visit SHRM Online at Follow us on Twitter @SHRMPress.

About Colonial Life

Colonial Life & Accident Insurance Company is a market leader in providing insurancebenefits for employees and their families through their workplace, along with individual benefits
education, advanced yet simple-to-use enrollment technology and quality personal service.
Colonial Life offers disability, life and supplemental accident and health insurance policies in 49
states and the District of Columbia. Similar policies, if approved, are underwritten in New York
by a Colonial Life affiliate, The Paul Revere Life Insurance Company, Worcester, Mass.
Colonial Life is based in Columbia, S.C., and is a subsidiary of Unum Group, one of the world’s
leading providers of employee benefits. For more information about Colonial Life’s products and services or opportunities with the company, call (803) 798-7000 or visit

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