Reducing benefits unpopular cost-cutting measure, says study

Reducing benefits and cutting salary are two of the most unpopular measures that staff consider an employer can make when looking to cut costs.

According to IFF Research’s Attitudes to Work study, just 4% of employees said reducing benefits would be their preferred cost-cutting measure if employers were forced to tighten their purse-strings. Some 9% of employers have so far reduced benefits within their organisation.

Salary cuts (cited by 1% as their preferred course of action) were unsurprisingly the least popular option, although more than one-in-ten (12%) respondents said it had happened within their organisation.

Reducing bonuses was also unpopular, with only 2% saying they would choose this option.

But one-fifth (20%) of respondents felt freezing salaries would be their preferred choice for cost-cutting while 26% said it had actually been implemented by their organisation.

However, there is more of a disparity when it comes to changing staff expenses. Although 21% of employers have implemented this, only 6% of employees say they would also choose this as a belt-tightening measure.

A contrast in employees’ attitudes towards remuneration can also be seen between those in the public and private sectors.†

While a quarter of public sector workers would choose to have their salary frozen over any other cost-cutting measure, just 17% of those in private sector said the same.

Jan Shury, joint managing director of IFF Research, said: “It is good to see the measures being implemented by employers are broadly in line with what employees find most acceptable, but businesses also need to consider the impact of secondary measures taken once the initial major decisions are made.

“Workers and employers clearly agree freezing salaries and recruitment is the right way to go, but there is a stark contrast in opinion over measures such as changing expenses or cutting salaries.”

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