Balancing cost reduction and talent management.

• Author: Heffes, Ellen M.
• Position: BENEFITS

Despite the pressures of the economic crisis, most United States companies continue to view their retirement as a vital part of their workplace relationship with employees, while struggling to balance cost and talent-management issues.

This is according to a survey of nearly 500 human resources and benefit executives from mid-size and large organizations, which was conducted in February by professional-services firm Towers Perrin.

Relatively few of the respondents said they were taking precipitous action right now, in terms of dramatically reducing or eliminating benefit plans. While partly a result of a decade-long focus on plan redesign and cost management, findings confirm the extent to which most firms are staying the course--for the present.

In fact, results indicate that many are using the current crisis to find the right balance between cost reduction and talent management, positioning benefits as part of a more holistic "deal" with employees--based on shared responsibility for costs and risks.

While companies appear to be trying to keep their programs as consistent as possible, the survey results underscored the current mood of trepidation in the workplace, given the financial pressures.

To wit, between 30 percent and 60 percent of respondents said that their employees were postponing plans to retire, reducing participation in 401 (k) plans and increasing hardship withdrawals and loans from the plan, with just 7 percent predicting any uptick in 401 (k) participation.

Mike Archer, Towers Perrin's chief actuary and a...