Employee Benefits and the Economy

. In times like these, access to good benefits means employees can take care of themselves and their families, regardless of what is going on in the economy. At a time when employers may be looking to reduce costs any way they can, it’s important to understand the long-term effects of cutting back on benefits. A short-sighted decision now may have unanticipated effects down the road when companies are once again counting on loyal employees to help them maintain that “edge” in a competitive marketplace.”

Impact of the Downturn

The economic downturn has had a broad impact on both employers and employees. Two-thirds of respondents to a Guardian survey reported, for example, that their employers have taken some action in response to the economic downturn. Tactics include training employees to do more than one job (47%), employee layoffs (33%), requiring longer hours or more work (26%), and instating furloughs and unpaid time off (16%).

Meanwhile, the economy is influencing behavior and lifestyle decisions on the part of employees with regard to benefits. One-quarter of employed consumers are afraid to take time off for illness, vacation, or leave of absence. On the West Coast, where unemployment is particularly high, this figure jumps to one-third.

Employees say they’re afraid to take vacation time (18%) and are not taking or cutting short leaves for medical or other reasons (16%). Some are returning early from maternity leave or other leave of absence (11%), while others who are pregnant or ill are afraid to take time off (10%). Some even say they’re postponing a divorce to preserve benefits (8%) or accelerating a marriage to obtain benefits coverage (6%). Consumers in the West are more likely to consider the impact on benefits when taking time off, while those in the Northeast are more likely to accelerate a marriage or delay a divorce.

The true cost of health coverage remains a source of misunderstanding for many employees. Fully 71% either significantly underestimate or don’t know the cost of individual health coverage in comparison to group coverage. What’s more, nearly one-third of workers think it is more expensive to obtain healthcare coverage at work than it is to buy coverage on their own.”

To see the importance of benefits to consumers and full statistics of the survey click here.