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Does cutting benefits mean damaging employee engagement?

November 22, 2011

To follow on from my previous blogs looking at the turbulent economy, I wanted to address the issue of cutting benefits, which many organisations have had to do as a result of the recession. In reality, does cutting benefits damage employee engagement or can organisations make necessary cuts and still maintain their employees who will go the extra mile?

Intuitively, it would seem that cutting benefits would mean that employees would be less satisfied and perhaps less committed to the organisation as from research one of the key attractions to organisations are the ‘perks’ of the job. However, it is clear that in times of trouble, when the changes are communicated effectively, that cuts can be made and engagement levels still maintained.

As discussed in my blog on pseudo engagement, in times of recession employees often bind to the organisation more vigorously – research suggests that this is due to job insecurity. This additional commitment, pseudo or real, can be harnessed should the right communication strategy be used. As long as when the cuts to benefits packages are planned management fully communicate with their employees, providing a full outline of the reasons behind these cuts and what is being done to try to introduce alternative, cheaper options then research suggests that employee engagement can still be maintained.

Promoting an employee voice at this time via an employee survey may be most useful in this situation as opinion on what packages and benefits are most used and appreciated may inform needed decisions on the cuts that would be accepted by the majority. It is important to note that it is not all about focusing on what cuts are being made but what existing benefits would still be offered and what benefits can be negotiated by looking into avenues that perhaps previously were not explored. It should be remembered that economic change is usually cyclical and so the good times, thankfully, are likely to return. During times of cutbacks it is how you handle the situation which will have crucial impact on employee engagement of the future. So, sometimes cost cutting is, of course, a necessary part of organisational management and often the first cuts to be made are the perks of the job. If the reasons for these cuts along with the details of when and how, what benefits will remain and if any alternatives are being sought, are communicated properly to all employees then this will ensure that employees still feel valued and should remain as engaged as they were previously. So, in short, we come to the conclusion that communication is key to how you manage employee engagement not just for now but also for the future too.

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