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Communicating Benefits Cuts To Employees

Despite slowly rising pricing gas prices, the oil and gas downturn that began about two years ago is still gripping the economy, and employers across all industries are feeling the strain.  Hundreds of thousands of U.S. workers have lost their jobs (not to mention all of those who were laid off internationally), and employers everywhere are searching for ways to minimize costs in order to better weather the storm.

One of the biggest targets of those cost-cutting initiatives?  Employee benefits.  Whether through small changes, like cutting back on wellness initiatives, or through more decisive moves like halting 401(k) matches, more and more employers are instituting cuts wherever possible to trim down their operational expenses.

If your company is considering cutting back on the benefits it offers to its workforce, you should proceed with caution, especially when determining how to communicate those cuts to employees.

Below are some best practices for communicating benefits cuts to employees:

  • Communicate early. As soon as you become aware that cuts are necessary, start working on your communication plan.  By doing your best to get out in front of the issue, you will prevent much of the speculation and rumors that tend to spread during economic slowdowns.  In addition to quashing any rumors, this will also allow employees more time to prepare to deal with the cuts.
  • Don’t just assume your employees are aware of why your company is cutting back. While much of your workforce will be aware of the downturn by this point, they may not be aware of how it is affecting your business.  When you do communicate the cuts, provide as much information as you can about the market conditions and reasoning behind your decision to cut back.
  • How you communicate benefits cuts can be just as important as when you communicate them. While every business and workforce is different, a mass email communicating the cuts is almost certainly not the best way to go about communicating benefits cuts.  If possible, gather your employees together, either during a regularly scheduled staff meeting or during a special meeting called specifically for this purpose.  If your workforce is widespread or operates in different timezones, consider hosting the meeting virtually or having a series of meetings to accommodate the different schedules or shifts your employees work.
  • Provide an avenue for employees to ask questions, both during the initial announcement and after the fact. Even if you are communicating benefits cuts during an in-person meeting, not every employee may feel comfortable asking their question in front of the larger group.  Make sure employees know who they can go to with any questions they have (i.e. human resources department, managers, executives, etc.).
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Just by the very nature of the topic, these conversations are likely to be uncomfortable at best, and upsetting at worst.  Having a solid plan in place to communicate benefits cuts will, however, help make the process a little easier, both for you and your employees.

G&A Partners, one of the nation’s leading professional employer organizations (PEOs), provides its clients with affordable tailored employee benefits packages.  G&A’s team of experienced and highly qualified employee benefits specialists oversee and administer a variety of plans from top-tier carriers while also delivering open enrollment assistance and ensuring employers are in compliance with all federal and state laws (ACA, HIPAA, COBRA, etc.).

Learn more about how G&A Partners helps businesses by providing, managing and administering employee benefits by calling 866-634-6713 to speak with an expert or visiting G&A Partners‘ website to schedule a free business consultation.

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