Survey Reveals Highest Rate of Health Benefit Cuts in Two Years

January 7, 2011 ( - While reported cutbacks in other areas declined or remained at the same level from the third quarter, health and dental benefit cuts peaked at the highest level in two years, according to the Q4 Employment Confidence Survey.

A press release said 28% of employees who cited at least some changes reported cuts to their health and dental benefit in the past six months, compared to 22% in the third quarter of 2010 and 17% in the fourth quarter of 2009. However, employees reported fewer cuts in perks (i.e. commuter subsidies, free food, tuition reimbursement) (12%) and hiring freezes (24%) than in previously reported quarters.   

The rates for furloughs, unpaid leave and/or mandatory vacation (17%) as well as job restructurings/redundancies (11%) remained unchanged from the third quarter.    

The survey of 2,118 U.S. adults ages 18+ conducted by Harris Interactive found employees are more confident in their job security and company’s outlook in the next six months than they were in the third quarter. However, they remain pessimistic about pay raises and have grown more uncertain about the job market since last quarter.    

In the fourth quarter of 2010, 40% of employees reported their employers made changes to the number of staff, organizational structure, compensation and benefits, or other perks in the past six months – down from 55% in the fourth quarter of 2009 when the majority of these job actions involved layoffs or layoff plans.   

In the past year, the highest incidence of employer actions shifted to compensation changes or cuts. For the fourth quarter, more than half (52%) of employees who reported at least some change indicated their company made changes to or reduced compensation in the past six months, up from 50% a year earlier. One in four (27%) said their own compensation (pay, bonus, etc.) was reduced during the same period.   

However, layoff reports dropped 11 points year ove year with 46% of employees reporting their employers initiated or communicated layoffs in the past six months.