w031109 economy 2 final v5

March 11, 2009

SHRM Poll March 20, 2009

SHRM Poll: Financial Challenges to the U.S. & Globa l Economy and Their Impact on Organizations

Introduction

Six Months Later: A Comparison of the Financial Challenges to the U.S. & Global Economy in October 2008 and March 2009

• In October 2008, SHRM conducted a series of polls which looked at the impact of the financial crisis on companies from a variety of angles. Six

©SHRM 2009 SHRM Poll March 11, 2009 2

impact of the financial crisis on companies from a variety of angles. Six months later, in March 2009, an update of several of the poll questions was done to determine how the strategies of businesses are changing as the economy continues to decline.

• When possible, similar questions and response options are compared with one another in October 2008 and March 2009.

• Companies were also asked to project how their company is likely to proceed in the next six months assuming that the current financial challenges continue.

Please indicate whether each of the following have occurred in your organization within the past 6 months as a result of the

financial challenges to the U.S. and global economy?March 2009 compared with October 2008

March 2009 (n=462)

October 2008 (n=633)

Budget cuts across the entire organization 71% --

Allowed attrition 63% 72%

Implemented hiring freezes (no new hires) 52% 48%

Froze employee wage increases 49% 3%


Note: Percentages do not total to 100% as respondents were allowed to select multiple response options.In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, March 2009 data are compared with October 2008 data; A dash (--) indicates that this particular option was not asked in October 2008.

Froze employee wage increases 49% 3%

Implemented layoffs 47% 48%

Cut employee bonuses 44% --

Halted plans for business growth/expansion 42% --

Retrained employees for new positions in organization 34% 10%

Did not renew contracts with existing contract/temporary, contingent workers

27% 21%

Reduced employees work hours with reduction in pay 20% 17%


financial challenges to the U.S. and global economy? (Continued)March 2009 compared with October 2008

March 2009 (n=462)


Restructured executive compensation and/or executive severance packages (in addition to what may be specified in federal bailout legislation)

18% --

Outsourced certain business functions 16% --

Implemented salary reductions (without reduction in 15% 5%


Implemented salary reductions (without reduction in hours)

15% 5%

Offered early retirement to employees 10% 6%

Implemented employee furloughs for select employees without shutting down entire business

9% --

Demoted employees to lower pay positions as a way to save money

9% --

Hired more contract/temporary/contingent workers than usual

8% 12%



financial challenges to the U.S. and global economy? (Continued)March 2009 compared with October 2008

March 2009 (n=462)


Offered job sharing 7% 5%

My company has acquired or merged with another company

6% 9%

Organization-wide work week reductions with no reduction in pay

6% --


reduction in pay

Shut down business for short periods at a time without paying employees

5% 7%

Introduced full-time telecommuting for employees to save on building and maintenance costs

4% --

My company has been acquired by or merged with another company

3% --



financial challenges to the U.S. and global economy?

• Budget cuts across the entire organization: Publicly (FP) (80%) > NP (58%)

• Cut employee bonuses: Privately (FP) (50%) > NP (30%), Govt (21%)• Implemented layoffs: Publicly (FP) (67%) > NP (26%), Govt (33%)

Privately (FP) (50%) > Govt (33%)• Allowed attrition of employees: Publicly (FP) (77%) > Privately (FP)

(59%)

Comparison by Organizational Sector

©SHRM 2009 SHRM Poll March 11, 2009

(59%)• Did not renew contracts with existing contract/temp orary,

contingent workers: Publicly (FP) (43%) > Govt (17%)• Offered early retirement to employees: Publicly (FP) (21%), Govt

(24%) > Privately (FP) (6%), NP (4%)• Implemented salary reductions: Privately(FP) (20%) > NP (4%)

• Company has acquired or merged with another company : Privately(FP) (16%) > Publicly(FP) (2%), NP(1%)

6

Note: Privately owned for profit organization = Private(FP) Publicly owned for-profit organization = Publicly(FP)Nonprofit organization = NP Government sector = Govt


financial challenges to the U.S. and global economy?

• Budget cuts across the entire organization: Large (80%) > Small (60%)

• Implemented layoffs: Large (59%) > Small (31%)• Restructured executive compensation and/or executiv e

severance packages (in addition to what may be spec ified

Comparison by Organizational Size


severance packages (in addition to what may be spec ified in the federal bailout legislation): Large (28%) > Small (9%)

• Allowed attrition of employees: Large (76%) > Small (53%)• Did not renew contracts with existing contract/temp orary,

contingent workers: Large (41%) > Small (18%), Medium (23%)

7

Note: Small = 1-99 employees Medium = 100-499 employees Large = 500 or more employees

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 6 months ?

20%

15%

16%

14%

8%

19%

22%

19%

12%

14%

30%

26%

25%

34%

35%

32%

37%

40%

40%

43%

Cut employee bonuses

Freeze employee wage increases

Implement hiring freezes (no new hires)

Allow attrition

Budget cuts across the entire organization


38%

42%

48%

46%

26%

35%

27%

25%

36%

31%

29%

28%

27%

20%

26%

25%

20%

19%

16%

17%

37%

27%

27%

27%

6%

7%

8%

9%

10%

19%

20%

24%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Outsource certain business functions

Reduce employees work hours with reduction in pay

Implement salary reductions (without reduction in pay)

Restructure executive compensation/severance packages (on top of specs in

federal bailout)

Retrain employees for new positions in organization

Will not renew contracts with existing contract/temporary, contingent workers

Halt plans for business growth/expansion

Implement layoffs

Not at all likely Somewhat unlikely Somewhat likely Very likely 8

Note: (n=405) Percentages may not total 100% due to rounding.

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 6 months ? (Continued)

56%

71%

59%

61%

58%

30%

26%

17%

28%

23%

25%

35%

14%

7%

10%

12%

12%

29%

4%

4%

4%

5%

5%

5%

Offer job sharing

Shut down business for short periods at a time without paying employees

Organizationwide work week reductions with no reduction in pay

Offer early retirement to employees

Implement employee furloughs for select employees without shutting business down

Reduce employee benefits offerings


81%

83%

73%

57%

61%

69%

12%

11%

18%

27%

28%

23%

6%

5%

7%

14%

8%

5%

1%

1%

2%

3%

3%

3%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

My company will be acquired by or merged with another company

My organization will go out of business

My company will acquire or merge with another company

Will hire more contract/temporary/contingent workers than usual

Demote employees to lower pay positions as a way to save money

Introduce full-time telecommuting for employees to save on building/maintenance costs

Not at all likely Somewhat unlikely Somewhat likely Very likely

9


Has your organization reduced employee benefits offering within the past 6 months as a result of the financial

challenges to the U.S. and global economy?

30%

40%

50%


17%

10%

0%

10%

20%

Yes

March 2009 (n=465) October 2008 (n=633)

10

Note: In October 2008, respondents indicated changes occurring in the past 12 months.

What employees benefits offerings has your organization reduced, frozen or eliminated within the past 6 months due

to the financial challenges to the U.S. and global economy?

40%

44%

47%

55%

57%

72%

78%

60%

56%

32%

30%

21%

24%

22%

0%

0%

21%

15%

21%

3%

0%

Paid vacation time only

Paid time off (includes sick, vacation and personal days all in one plan)

Defined contribution retirement savings plan employer match (e.g. 401(k))

Company-paid relocation programs

The amount of employee leave carryover from one year to the next

Health care coverage for spouse/dependents

Health care coverage for employees


27%

27%

31%

33%

35%

40%

73%

55%

69%

44%

59%

60%

0%

18%

0%

22%

6%

0%

0% 20% 40% 60% 80% 100%

Paid personal days only

Defined benefit pension plan

Paid sick time only

Workplace flexibility benefits, e.g. telecommuting, compressed work weeks

The amount of employee leave accruals/balances

Paid vacation time only

Reduced Frozen Eliminated completely

11

Note: (n=47) Only respondents who indicated that their organization had reduced employee benefits answered this question.“Reduced” is defined as “decreased scope of benefit offering and/or amount of benefit offering from prior levels).”“Frozen” is defined as “benefit offering still exists, but no additional funds are being invested, no new employees are eligible for benefit offering.”“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.

19%

39%

16%

36%

44%

57%

51%

20%

26%

28%

32%

33%

37%

47%

51%

56%

Reduction in per diem allowance for travel and entertainment

All staff training on general topics that are not specifically related to company's core business

Spot awards

Refreshments/snacks for employees

Professional development for employees

Travel costs (excl. per diem) related to professional development

Morale and team-building activities

Recruitment-related advertising, travel and relience on paid recruiters

Please identify if your company has made cuts in each of the following areas in the past 6 months?

March 2009 compared with October 2008


2%

4%

13%

15%

10%

11%

23%

13%

6%

8%

13%

16%

16%

18%

18%

18%

20%

0% 10% 20% 30% 40% 50% 60%

Transit and parking subsidies

Environmental initiatives (e.g. recycling campaigns)

Fitness and stress management initiatives

Diversity training

Volunteer and philanthropic acitivities

Recruitment initiatives specifically related to increasing diversity of company's workforce

Tuition reimbursement/education assistance

HR-related technology, (e.g., applicant tracking and payroll systems)

Discretionary legal advice

March 2009 (n=403) October 2008 (n=633)

12

Note: In October 2008, respondents selected the top five changes that occurred in the past 12 months. Percentages do not total to 100% as respondents were allowed to select multiple response options.“Not applicable” responses were excluded from this analysis. Where possible, March 2009 data are compared with October 2008 data.

Please identify if your company has made cuts in each of the following areas in the past 6 months?

• Morale and team building activities, including comp any picnics and holiday parties: Publicly(FP) (63%) > NP (34%)

Large (62%) > Small (34%)• Diversity training: Private(FP) (23%) > NP (6%) • Travel costs (excluding per diem) related to profes sional

Comparison by Organizational Sector & Size


• Travel costs (excluding per diem) related to profes sional development: Large (65%) > Small (35%), Medium (39%)

• Recruitment related advertising, travel and ralianc e on paid recruiters: Large (74%) > Small (42%), Medium (50%)

13

Small = 1-99 employees (n=56) Medium = 100-499 employees (n=102)Large = 500 or more employees (n=100)

Note: Privately owned for profit organization = Private(FP) Publicly owned for-profit organization = Publicly(FP)Nonprofit organization = NP Government sector = Govt

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 6 months, if they have not already been cut?

36%

28%

23%

41%

36%

29%

22%

25%

24%

27%

29%

29%

22%

17%

26%

20%

22%

16%

18%

25%

29%

16%

24%

21%

32%

27%

26%

19%

19%

19%

21%

23%

24%

26%

27%

35%


Reduction in per diem allowance for travel and entertainment

Professional development for employees

Fitness and stress management initiatives

Spot awards

Refreshments/snacks for employees

Morale and team-building activities

Travel costs (excl. per diem) related to professional development

Recruitment-related advertising, travel and relience on paid recruiters


50%

42%

42%

38%

41%

36%

28%

56%

36%

30%

27%

26%

29%

27%

23%

29%

19%

27%

9%

18%

18%

18%

15%

23%

24%

7%

18%

12%

13%

13%

15%

16%

18%

18%

18%

19%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Environmental initiatives (e.g., recycling campaigns)

Volunteer and philanthropic acitivities

Diversity training

HR-related technology, e.g., applicant tracking and payroll systems

Discretionary legal advice

Tuition reimbursement/education assistance

All staff training on general topics that are not specifically related to company's core …

Transit and parking subsidies


Not at all likely Somewhat unlikely Somewhat likely Very likely

14


Demographics: Organizational Industry

IndustryManufacturing - other 14%

Services - professional, scientific, technical, legal, engineering 9%

Health care, social assistance (e.g. nursing homes, EAP providers 9%

Financial services (e.g. banking) 8%

Retail/wholesale trade 5%

Educational services/education 5%


Educational services/education 5%

Other services (e.g. non-profit, church/religious organizations) 5%

Construction, mining, oil & gas 4%

Government/public administration - federal, state/local, tribal 4%

High-tech 4%

Insurance 4%

Consulting 4%

15


Demographics: Organizational Industry (Continued)

IndustryUtilities 3%

Telecommunications 2%

Transportation, warehousing (e.g. distribution) 2%

Services - accommodation, food & drinking places 2%


Manufacturing - auto/auto related 2%

Real estate, rental, leasing 2%

Publishing, broadcasting, other media 2%

Association - professional/trade 1%

Arts, entertainment, recreation 1%

Biotech 1%

Other 8%

16


Demographics: Organization Size


Note: (n=290)

Demographics: Organizational Sector

22%

50%

Publically owned for profit

Privately owned for-profit


9%

20%

0% 10% 20% 30% 40% 50% 60%

Government sector

Nonprofit organization

18


Demographics: Organization’s Business Scope

20%

43%

Primarily locally based (i.e., business operations, employees and/or customers primarily within a

city/town)

Primarily nationally based (i.e., business operations, employees and/or customers primarily

within the U.S.)


4%

13%

20%

0% 10% 20% 30% 40% 50%

Other

Primarily multinationally based (i.e., business operations, employees, and/or customers outside

of the U.S.)

Primarily state-based (i.e., business operations, employees and/or customers primarily within a

state)

19

Note: (n=388)

Demographics: Unionized Workplace

85%

60%

70%

80%

90%


15%

0%

10%

20%

30%

40%

50%

60%

Yes No

20

Note: (n=390) The average percent of unionized employees at locations with a unionized workplace is 50%.

• Response rate = 17%• Sample comprised on 467 randomly selected HR

professionals from SHRM’s membership• Margin of error is +/- 4 • Survey fielded the week of March 12, 2009

SHRM Poll: Financial Challenges to the U.S. & Global Economy and Their Impact on Organizations

Methodology


• Survey fielded the week of March 12, 2009

w031109 economy 2 final v5

Documents

offered early

restructured

implemented

federal bailout

current financial

lower pay

implemented

global economy