Amid the coronavirus pandemic, current events are reminiscent of the financial challenges of 2008. Those challenges imparted some important lessons for employers. Elliot Dinkin considers what employers did in 2008 that worked well and how they can apply takeaways to improve outcomes now.
Back in 2008, most companies took a piecemeal approach in attempting to save on cash outflow versus an overall total compensation perspective. Employers trimmed or eliminated matches to savings plans, froze retirement plans and implemented conversions of certain employer provided benefits to an employee-pay voluntary basis, and there it was: the desired savings. However, how did those actions affect long-term cost? The short answer is that medical costs continued to increase, turnover increased and frozen pension plans have been difficult to manage and are no longer of strategic interest.
Fast forward to 2020. It was only a short time ago that we were developing plans for retaining employees and considering a variety of ideas along those lines. Now, furloughs and layoffs are unfortunately inevitable. But for the remaining employees who are required to do more than before, how should we approach things differently? The status quo will no longer work.
What we saw after the 2008 fallout was certainly enlightening: The piecemeal…
