Economy triggers more cost-cutting measures

Many employers are taking a serious look at their benefit offerings as economic concerns continue. Unwelcome budget cuts may include reduced benefit offerings as well as reductions in health savings accounts and/or retirement savings programs.

Alternatively, some companies are keeping benefits at the same level by producing “savings” through staff reductions. A survey by the Society for Human Resource Management reports that over half of the respondents plan to dismiss employees within the next twelve months. While auto, banking and housing industries have already been hit hard, some suggest that the retail, technology and manufacturing sectors will be next, adding to the already swollen unemployed population.

Meanwhile, even working employees are struggling with financial pressures related to insurance coverage. As employers pass more health care costs to them, some workers find that they simply cannot afford the coverage. They and their families find themselves among a growing number of uninsured (or underinsured) population.

In addition, reduced employer and employee contributions to and early withdrawals from 401(k) and 403(b) retirement accounts are raising concerns. Fewer people will be prepared for retirement, and that begins to foster discouragement.

[ From Business Insurance, Jan. 5, 2009 issue, pp. 1 and 20, and Jan. 12, 2009 issue, p. 3. Also from The Wall Street Journal, Dec. 18, 2008 issue, p. D3. ]