ALEXANDRIA, Va., Oct. 7 /PRNewswire/ -- Numerous organizational operations are affected by the cost of health care coverage, according to a survey by the Society for Human Resource Management (SHRM).
The SHRM survey, fielded in September 2004, received responses from 375 human resource (HR) practitioners from a random sample of SHRM members. The survey asked them to report the likelihood that adjustments in several organizational areas may be made in order to cover the cost of employee health care coverage.
Survey respondents report a likelihood of decreasing salaries as well as cuts in training programs, hiring new staff and investments in technology. In addition, respondents expect an increase in the likelihood of outsourcing, downsizing, and consumer service prices and products in order to cover the cost of employee health care coverage.
“For years, health care costs have increased three to four times faster than the rate of inflation, and employers absorbed most of that cost,” said Susan R. Meisinger, president and CEO of SHRM. “Employers want to provide health care coverage to employees, however, increasing health care costs are cutting into all areas of business, and that severely affects an organization’s overall success and competitiveness.”
“The economic ramifications of rising health care costs need to be viewed by what they cost companies in dollars that might be spent elsewhere,” Meisinger continued. “HR professionals have a unique position to report what their organizations are doing to keep up with health care costs and their reports are telling. Fewer hires, more layoffs, and an increased cost of goods and services affect overall economic conditions in very real ways.”
Survey respondents report several areas likely cut in order to cover health care costs. These include:
* 29 percent report a likely decrease in other employee benefits, * 28 percent report a likely decrease in hiring new staff, * 22 percent report a likely decrease in employee salary/raises, * 19 percent report a likely decrease in employee training/professional development, * 12 percent report a likely decrease in technology investments.
The survey also shows a greater likelihood that organizations will have to increase some avenues of cost savings in order to cover health care costs. These include:
* 44 percent report a likely increase in expectations of employee productivity, * 29 percent report a likely increase in the costs of consumer services/products, * 19 percent report a likely increase in exploring the use of offshoring/outsourcing, * 15 percent report a likely increase in downsizing/layoffs.
In the administration of benefits, SHRM believes that reforms should be based on a model that has built-in incentives to balance both quality and cost efficiencies. As part of efforts to control rising costs, both employers and employees must be informed consumers of health care.
The Society for Human Resource Management (SHRM) is the world’s largest association devoted to human resource management. Representing more than 190,000 individual members, the Society’s mission is to serve the needs of HR professionals by providing the most essential and comprehensive resources available. As an influential voice, the Society’s mission is also to advance the human resource profession to ensure that HR is recognized as an essential partner in developing and executing organizational strategy. Founded in 1948, SHRM currently has more than 500 affiliated chapters and members in more than 100 countries. Visit SHRM Online at http://www.shrm.org/.
Society for Human Resource Management
CONTACT: Frank Scanlan, +1-703-535-6043, fscanlan@shrm.org, JenJorgensen, +1-703-535-6356, jjorgensen@shrm.org, or Will Gray,+1-703-535-6012, wlgray@shrm.org, all of the Society for Human ResourceManagement
Web site: http://www.shrm.org/