Benefits January 6, 2005

SHRM: Economic Uncertainty Still a Worry for 2005

January 6, 2005 (PLANSPONSOR.com) - As corporate executives ponder the year ahead, they recognize a number of challenges in their path in 2005 including spiraling health coverage expenses and continuing economic uncertainty.
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But, according to a survey by the Society for Human Resource Management (SHRM), the HR executives are also concerned about employee retention and beefing up productivity.

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“Companies continue to struggle with critical issues, such as health care costs and retention,” said Susan Meisinger, SHRM president and CEO, in a SHRM news release. “However, executives have begun to realize that effective HR strategy can help their organization keep costs down, improve retention and productivity measures, and, most importantly, help the organization achieve business goals.”

Survey respondents rated the rise in health care costs as their chief concern, with 57% reporting health care cost escalation as a top trend affecting policies that impact employees. Nearly 40% said employee retention, economic uncertainty and the need to increase productivity will be the primary forces of change affecting workers in 2005.

Other 2005 trends of note:

  • the need to build employee morale
  • employee recruitment
  • aligning compensation with corporate values
  • a growing complexity of legal compliance
  • demand for flexible work arrangements
  • the exportation of US jobs.

Other findings from the survey show that management views HR as an essential contributor to business strategy and success. In fact, seven in 10 (71%) say successful delivery of HR is very important to overall company success.

Some 80% of survey respondents completely or somewhat agree that the role of HR can help organizations control costs and increase retention. Seventy-seven percent agree HR can help increase productivity, 69% agree that HR can identify future business leaders, and 64% agree that HR can act as a trusted advisor and key player in helping organizations achieve their business goals.

The survey covered 168 non-human resource executives, 107 non-HR senior managers, and 310 HR executives.

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