Financial Concerns Drive Innovation in the Workplace

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The results of the 2012 ERC/Smart Business Workplace Practices Survey demonstrate a commitment among Northeast Ohio employers to improving their workplaces despite and in some cases because of the financial challenges they face in today’s economy. While respondents indicate for the second year running that the economy is no longer their most pressing challenge, cost related challenges more generally such as funding, healthcare costs, controlling costs and financial stability are all among the top ten challenges reported by employers.

Perhaps the most striking fiscal measure being utilized to control costs reported by participants is layoffs. After a sharp decline in 2011, the percent of organizations anticipating layoffs for the coming year increased to 10.3%. However, it is important to note that while higher than 2011, this number still falls in line with pre-recession levels when double digit percentages were commonplace.

A drop off in employer offerings can be seen in the areas of benefits and employee development. Employers are requiring a higher percentage of health insurance premiums than indicated by 2011 data, but at the same time many employers added the option of a Health Savings Account to their list of benefits (44.4%) - a strategic move to help control healthcare costs for the organization and give employees more choice. In terms of development opportunities, the percent of organizations providing financial assistance to employees for training and development did see a decrease in comparison to 2011. However, it is important to note that despite 2012's decrease, tuition assistance and job training are still offered by the vast majority of participating organizations (80%).

In contrast, non-monetary benefits saw significant improvements, with the percentages of employers offering work-life benefits such as flexible scheduling and paid time off banks up from 2011 by 8% and 12% respectively. Building a strong total rewards program that incorporates these low- or even no-cost options and appeals to existing employees is key to retaining top talent, particularly as the job market begins to recover and the voluntary turnover rate increases- up 2.7% over 2011 to 8.6%.

Despite these various indicators pointing to ongoing financial struggles, compensation practices remain steady with pay raise projections meeting or in some cases even exceeding 2011’s increases- right around 3.0%. In addition, the average dollar amount of cash bonuses being distributed to individual employees saw healthy increases over 2011, particularly in manufacturing ($4,492). The minimum hourly rate paid to employees improved slightly, up to an average of $11.02 per hour.

For more information on workplace trends from the 2012 ERC/Smart Business Workplace Practices Survey see the July 2012 issue of Smart Business or download the entire report here.