Families and Work Institute Releases Findings on Impact of Recession on Employers

July 23, 2009

New data from May 2009 study provides insights on 
role of workplace flexibility and other trends in down economy

New York, NY – How is the economic downturn affecting the American workplace? A new study released today by the Families and Work Institute (FWI) finds that in the face of recession, and at a time of cost cutting, the overwhelming majority of employers (94%) are maintaining or increasing their workplace flexibility programs. In fact a quarter of the employers (26%) specifically used flexible workplace options – from reduced work weeks to telecommuting – to minimize the need for layoffs.

The study, based on a May 2009 survey of U.S. employers with 50 or more employees, measured a number of trends including percentage of employers reducing labor and operational costs, specific cost reduction strategies, and how different types of employers are helping employees deal with the recession.

“It is hardly surprising that our survey finds that 77% of employers are cutting and controlling labor and operational costs during the recession,” said Ellen Galinsky, co-founder and president of FWI.  “What is surprising is that that between 34% to 43% of employers are actively helping employees weather the recession, that employers are largely retaining or increasing workplace flexibility as way to manage through a difficult economic environment, and that 57% of employers are giving employees some or a lot of input about the flexibility they use.”

Ms. Galinsky is testifying today before the Joint Economic Committee of Congress, as part of ahearing entitled “Balancing Work and Family in the Recession: How Employees and Employers are Coping.”

The FWI study, which is downloadable in full at www.familiesandwork.org, is based on a May 2009 survey of a random sample of 400 employers.  Among the more notable findings:

  • Two-thirds of employers have experienced declining revenues over the past 12 months, another 28% reporting that that revenues have held more or less steady, and only 6% have experienced growth.
  • Most employers (77%) are reducing or controlling costs during the recession and 90% of those experiencing lower revenues have taken steps to reduce labor and operational costs.
  • The most common strategies to control costs include:
    • Decreasing/eliminating bonuses or eliminating salary increases (69%)
    • Lay-offs (64%)
    • Hiring freeze (61%)
    • Eliminating all travel that is not essential to business (57%)
  • A large majority of employers are either maintaining the workplace flexibility options they offer (81%) or increasing them (13%).  Only 6% have reduced such options.
  • 26% of employers have specifically used flexible workplace options to minimize the need for lay-offs.
  • 18% of employers with 25% or more union employees are offering buyouts or other inducements for early retirement versus 6% for other employers.

The FWI report analyzes a number of the survey findings based on size of employer; proportion of men versus women; proportion of hourly versus salaried workers; proportion of union employees; and non-profit versus for-profit employers.

“Employers are increasingly recognizing the value of work-life balance policies to their bottom lines — now we see it’s true in good times and in tough times,” said Congresswoman Carolyn B. Maloney, Chair of the Joint Economic Committee. “Offering flexibility to workers is a low-cost way to boost morale, loyalty, and productivity. This new report by the Families and Work Institute, confirms that smart employers are working with their employees to avoid layoffs.  More employers should see these policies as an essential element of the 21st century workplace. Leaders in Washington must work with leaders in the business community to further increase workplace flexibility that works for both employers and employees.”

The FWI survey was based on a weighted random sample of employers with 50 or more employees.  It was conducted by Harris Interactive and based on 20-minute telephone interviews with directors of human resources or persons with primary responsibility for human resources.

Families and Work Institute (FWI) is a nonprofit, nonpartisan premier research organization that studies the changing workforce and workplace, the changing family and the changing community. As a preeminent think-tank, FWI is known for being ahead of the curve, identifying emerging issues, and then conducting rigorous research that often challenges common wisdom, provides new insight and knowledge, and motivates and leads to action. Since the Institute was founded in 1989, its work has focused in three major areas: the workforce/workplace, youth and early childhood. For more information, visit www.familiesandwork.org orwww.familiesandwork.org/blog. Follow FWI on Twitter at http://twitter.com/FWINews.



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