Benefits experts there are other companies should first Cut

 

Thursday, Mar 05,2009, 12:28:32 PM   Click:

TITLE: Benefits: Experts say there are other places companies must reduce first.

Signature: Denise Massie Pharos-Tribune, Logansport, Ind.



January 4 - May Many small businesses seek ways to cut costs and save money, but cutting benefits does not appear to be high on the list of options.

Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University, said he believes most small businesses to seek other ways to cut expenses.

"I have not yet seen," he said. "I think this would be one of the last things they let go. I think that small businesses would be more prone to flexible hours or lay off before getting rid of benefits."

Skip Kuker, president of the Loganport-Cass County Economic Development Foundation, said he had not heard of local businesses such reductions.

"You never know what's coming in the next street corner," he said.

Todd Miller, president of Myers Spring, said his company had not reached that point.

"We have a set of competitive advantages to get the talent that we want," he said. "Everything is about competition."

Of course, this does not mean it could never happen.

"There are no guarantees in this life," he said. "I would not say we would never do, but this is not something we contemplate today."

According to Hicks, cutting benefits, even on a temporary basis may cause some workers to leave the company.

"You do not want to do that," he says. "This would be a last resort."

Kuker said companies know that if workers have to leave because of the cuts, it will cost more money the long term when it is to train new employees.

Hicks said businesses most likely seek to reduce positions or not fill vacancies.

"They will get rid of the decline in the quality of workers, rather than cut a benefit that might be useful to keep everybody," he said.

According Kuker, communication is key. He said that the company should explain to its employees what it does and why. While employees may not be happy with the cut, Kuker said at least they will be better informed.

"This is not a justification, but an explanation," he said. "People feel better when they have this explanation in hand."

Miller said providing benefits was an important aspect of finding and keeping workers.

"Health insurance and retirement are profitable because it provides peace of mind," he said. "It helps people stay focused on work."

While some believe May advantages are not as important as other factors, Hicks is hard to believe the future employees will be less interested in what packages a company has to offer.

"It is difficult to imagine a modern work does not benefit," he said. "Failure to provide health care and a 401K is a big argument for most people."