With all the negative press on Canada’s economic situation, it’s not a stretch of the imagination to assume that most firms are taking a hard look at staff reductions. Layoffs have recently been announced at many blue-chip organizations, and more are likely to occur before we emerge from this recession. Surprising, then, to learn that despite the current uncertainty, a majority of Canadian employers are avoiding layoffs wherever possible, according to a recent survey.

Hewitt Associates’ The Impact of the Economy on HR Programs survey of 192 Canadian organizations reports that instead of cutting staff, companies are looking at alternative solutions to manage budgetary constraints while still investing in those programs that drive employee engagement.

“Employers recognize that the recession won’t last forever and they don’t want to find themselves short of employees or skills when things improve,” says Tim Clarke, Hewitt’s benefits practice leader.

Roughly half (53%) of respondents are putting less effort into recruitment, and slightly fewer (47%) have stopped hiring. However, a company’s fortunes appear to be directly linked to the industry it serves, as 31% of respondents admit that some layoffs are expected, mostly from the manufacturing, retail, financial and pharmaceutical sectors.

So far, employee benefits have avoided the chopping block. Eighty percent of respondents intend to leave their medical, dental and disability benefits plans as is, while some actually plan to expand their programs. Benefits that focus on wellness are proving to be very popular, including massage therapy, physiotherapy and health and wellness programs.

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“In lean operations where every employee counts, companies need staff to contribute by staying healthy and engaged,” says Rochelle Morandini, a senior organizational health consultant with Hewitt. “Employers understand that they need to support their employees in managing their stress and staying well, so that they can maintain productivity.”

There are other benefits—namely those that boost employee engagement and are cost-effective—that seem to be surviving, such as employee recognition and loyalty programs and training and development.

“Most of these programs do not cost a lot compared to other benefits, so it’s money well spent from both the employees’ and employer’s perspective,” says Clarke.

While employers look to reduce costs in benefits insurers’ administration fees, commissions and outside supplier fees, the main cuts appear to be focusing on business travel, with 58% of respondents planning to cut back either substantially or slightly. Holiday celebrations are also being pared down, with 10% of organizations cutting back significantly this past season and a further 22% cutting back slightly.

Not surprisingly, many organizations are avoiding direct discussions about staffing cuts. More than 35% of employers are not planning any communication to employees about the situation or its impact on their workforce. Those that do plan to talk about it with their employees are focusing on the general business climate, not specific company plans.

“Employer silence at this time may unnecessarily raise employee anxiety,” explains Morandini, who sees this as a perfect opportunity to let employees in on the company’s approach to deal with the recession. “Clear communication will not only allay fears, it will help employees feel somewhat more in control, and even have further benefits such as getting employees on side and participating with cost-saving measures.”

To comment on this story, email jody.white@rci.rogers.com.

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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