SHRM Survey: HR Professionals Say Expect More Cuts in Next Six Months

Apr 7, 2009
LIKE SAVE PRINT
Reuse Permissions

SHRM Survey: HR Professionals Say Expect More Cuts in Next Six Months

Employee benefits unlikely to be cut and companies are unlikely to go out of business

Alexandria, Va. – A new poll from the Society for Human Resource Management (SHRM) identifies more than 20 measures U.S. companies are likely to use in order to survive the next six months if the recession continues.

Budget cuts across the entire organization ranked first with 43 percent of respondents citing this action as “very likely”. Another 40 percent said their companies will allow attrition while 40 percent report their organizations will implement hiring freezes.

The fourth most anticipated tactic is to freeze employee wages (37 percent) while 32 percent said their companies will cut employee bonuses.

“Though news reports are dominated with stories of layoffs, the poll shows that such drastic measures are becoming more of a last option that many business leaders would take,” said SHRM President and CEO Laurence G. O’Neil. “This finding underscores the seriousness of the recession as many companies find they cannot survive without some degree of layoffs.”

Implementing layoffs (24 percent) ranked the sixth most likely tactic to be used during the next six months if the recession continues. During the previous six months, layoffs (47 percent) were the fifth most used tactic for business survival.

The poll also examines HR’s response to the weak economy in the last six months. The HR professionals said that the most common responses included budget cuts across the entire organization (71 percent); allowing attrition (63 percent); implementing hiring freezes (52 percent); freezing employee wage increases (49 percent); and implementing layoffs (47 percent).

Additional survey highlights include:

  • Only five percent of those surveyed report “very likely” plans to reduce employee benefits in the next six months while 29 percent said “somewhat likely”, 35 percent report “somewhat unlikely”, and 30 percent said “not at all likely.”

  • No company completely eliminated health care coverage for employees during the previous six months, although 22 percent did freeze coverage and 78 percent reduced coverage. Overall, only 17 percent of companies had reduced any type of employee benefits during the previous six months due to the economic decline.

  • The majority of respondents (71 percent) said it is “not at all likely” that their companies will shut down business for short periods at a time without paying employees in the next six months while 17 percent report it is “somewhat unlikely.” Only four percent report this action is “very likely” and seven percent said it is “somewhat likely.”

  • The overwhelming majority of HR respondents (83 percent) said it is “not at all likely” that their organization will go out of business in the next six months and 11 percent report it is “somewhat unlikely.” Five percent said it is “somewhat likely” while only one percent said it is “very likely.”

  • The vast majority of HR respondents (81 percent) report it is “not at all likely” that their company will be acquired by or merged with another company in the next six months. Another 12 percent said it is “somewhat unlikely.” Only one percent said it is “very likely” and six percent report “somewhat likely.”

  • Environmental initiatives are unlikely to be cut, with 50 percent saying it is “not at all likely” and another 30 percent report it is “somewhat unlikely” that such programs will be cut during the next six months. Nine percent said it is “somewhat likely” and 12 percent said it is very likely.”

  • Volunteer and philanthropic activities are also unlikely to be cut during the next six months with 42 percent reporting it “not at all likely” and 27 percent reporting it “somewhat unlikely.” Only 13 percent of those surveyed said it is “very likely” that these programs will be cut while 18 percent said it is “somewhat likely.”

The SHRM Poll, “Financial Challenges to the U.S. & Global Economy and its Impact on Organizations,” surveyed 467 randomly selected HR professionals across industries and the country.

Reporters may read the complete poll, and others, at: http://www.shrm.org/surveys.

The poll is part of a series of economy-related surveys conducted by SHRM Research. Also released today is the SHRM Labor Market Outlook Survey: Q2 2009, or SHRM LMO.

Please read the SHRM LMO at: http://www.shrm.org/Research/MonthlyEmploymentIndices/Pages/default.aspx

###

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 over 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 .

LIKE SAVE PRINT
Reuse Permissions

SHRM-CP/SHRM-SCP EXAM

The application deadline is October 21

Apply Today

Job Finder

Find an HR Job Near You

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 3,200 companies

Search & Connect