Employee Benefits Down in 2009

Though U.S. employers continue to offer an extensive selection of employee benefits, 60% of HR professionals say the recession has caused their organizations to scale back or hold steady on benefit offerings, according to the Society for Human Resource Management (SHRM). The findings are detailed in the SHRM 2009 Employee Benefits Survey Report.

"The recession plus rising health care costs are causing companies to evaluate all operating costs closely, even employee benefits, where a reduction in some benefits is required to survive the economic crisis," said SHRM President and CEO Laurence G. O'Neil.

Compared to 2008, fewer organizations this year are providing housing and relocation, business travel and other employee benefits. Health care and welfare benefits showed a relatively small decrease while family-friendly benefits showed fewer offerings for elder care referral services and adoption assistance.

Key findings from the survey include:

• Organizations continue to offer family-friendly benefits for same-sex and opposite-sex domestic partners. Overall, 16% of HR professionals reported that their company offers some form of domestic partner benefits beyond health care. Specifically, 14% offer family-friendly benefits to same-sex partners and 14% extend the same to opposite-sex partners. For health care, 37% of organizations offer the benefit to opposite-sex domestic partners and 36% offer it to same-sex domestic partners.


• Organizations recognize the critical importance of financial and compensation benefits. A financial literacy program benefit debuted on the 2009 survey with 12% of surveyed companies offering it. Also, more companies offered a defined contribution retirement plan benefit in 2009 (90%) than 2008 (84%). Notably, HR professionals reported fewer organizations offering the executive retention bonus benefit in 2009 (11%) than 2008 (17%).


• Overall, health care and welfare benefits declined slightly in 2009, though more companies are offering mental health coverage benefits in 2009 than 2008. Seventy-five percent of HR professionals said their organizations offered the benefit last year compared to 80% this year. Mental health coverage was the only benefit in this category to be offered by more organizations in 2009 than 2008.


• Among the 52 types of benefits offered under health care and welfare, eight declined in 2009: (1) contraceptive coverage; (2) HMO; (3) life insurance for dependents; (4) long-term care insurance; (5) retiree health care coverage; (6) supplemental accident insurance; (7) surcharges for spousal health care coverage; and (8) wholesale generic drug program for injectable drugs.

The other benefits category saw declines in several types of coverage with more expected before year end. HR professionals reported fewer companies offering: noncash, companywide performance awards; community volunteer program benefits; and discount ticket services. Also, a number of organizations report plans to reduce or eliminate holiday parties, company picnic and company-purchased tickets to events during 2009.

HR professionals report that 20% of payroll is for mandatory benefits, 19% for voluntary benefits and 11% for paid leave benefits.

The survey, published annually by SHRM since 1996, gathers information on 10 employee benefits categories. The 2009 survey provides data on 274 different benefits and highlights responses from 522 randomly selected HR professional who are members of SHRM.