1. January 27, 2010 SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations—An Update

2. Financial Challenges – An Update| ©SHRM 2010 Introduction One Year Later: A Comparison of the Financial Challenges to the U.S. and Global Economy poll data in October 2008, March 2009 and October 2009 In October 2008, SHRM conducted a series of polls that looked at the impact of the financial crisis on companies from a variety of angles. An update of several of the poll questions was done in March 2009 and October 2009 to determine how the strategies of businesses are changing as the economy continues to change. When possible, similar questions and response options from October 2008, March 2009 and October 2009 are compared with one another. Respondents were also asked to project how their company is likely to proceed in the next six months, assuming that the current financial challenges continue. 2

3. Financial Challenges – An Update| ©SHRM 2010 Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy? 3 Note: Percentages do not total 100% as respondents were allowed to select multiple response options. In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, October 2009 data are compared with March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008. October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Made budget cuts across the entire organization 73%71%-- Allowed attrition 63% 72% Froze employee wage increases 54%49%3% Implemented layoffs 52%47%48% Cut employee bonuses 48%44%-- Implemented hiring freezes (no new hires) 42%52%48% Retrained employees for new positions in organization 42%34%10% Halted plans for business growth/expansion 37%42%-- Did not renew contracts with existing contract/temporary/ contingent workers 33%27%21% Outsourced certain business functions 20%16%-- October 2009 Compared With March 2009 and October 2008

4. Financial Challenges – An Update| ©SHRM 2010 Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy? (continued) 4 October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Reduced employee work hours with reduction in pay 18%20%17% Hired more contract/temporary/contingent workers than usual 16%8%12% Restructured executive compensation and/or executive severance packages (in addition to what may be specified in federal bailout legislation) 15%18%-- Implemented salary reductions (without reduction in hours) 15% 5% Demoted employees to lower-pay positions as a way to save money 12%9%-- Offered early retirement to employees 10% 6% Implemented employee furloughs for select employees without shutting down entire business 10%9%-- Note: Percentages do not total 100% as respondents were allowed to select multiple response options. In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, October 2009 data are compared with March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008. October 2009 Compared With March 2009 and October 2008

5. Financial Challenges – An Update| ©SHRM 2010 Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy? (continued) 5 October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Shut down business for short periods of time without paying employees 8%5%7% Offered job sharing 7% 5% Reduced organizationwide work week with no reduction in pay 7%6%-- Acquired or merged with another company 6% 9% Introduced full-time telecommuting for employees to save on building and maintenance costs 6%4%-- Had been acquired by or merged with another company 2%3%-- October 2009 Compared With March 2009 and October 2008 Note: Percentages do not total 100% as respondents were allowed to select multiple response options. In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, October 2009 data are compared with March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.

6. Financial Challenges – An Update| ©SHRM 2010 Please indicate whether each of the following have occurred in your organization within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy? Publicly owned for-profit companies have taken more drastic measures than other sectors Made budget cuts across the entire organization: Public FP (88%) > NP (65%) Implemented hiring freezes: Public FP (53%) > NP (28%) Implemented layoffs: Public FP (72%) > NP (33%), Govt (34%); Private FP (54%) > NP (33%) Outsourced certain business functions: Public FP (36%) > Private FP (16%) Did not renew contracts with existing contract/temporary/contingent workers: Public FP (51%) > Private FP (27%) Allowed attrition of employees: Large (73%) > small (52%) Froze employee wage increases: Small (68%) > large (45%) Did not renew contracts with existing contract/temporary/contingent workers: Large (53%) > small (20%), medium (32%) Made budget cuts across the entire organization: Large (80%) > small (60%) 6 Comparison by Organizational Sector Note: Privately owned for-profit organization = Private FP Publicly owned for-profit organization = Public FP Nonprofit organization = NP Government sector = Govt Small = 1-99 employees Medium = 100-499 employees Large = 500 or more employees Comparison by Organizational Staff Size

7. Financial Challenges – An Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS? 7 October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Make budget cuts across entire organization 34%43%32% Freeze employee wage increases 33%37%18% Cut employee bonuses 32% 21% Allow attrition 29%40%-- Implement hiring freezes (no new hires) 23%40%26% Implement layoffs 21%24%16% Not renew contracts with existing contract/temporary/contingent workers 18%19%-- Halt plans for business growth/expansion 16%20%-- Retrain employees for new positions in organization 13%10%-- Reduce employee benefits offerings 13%5%-- Outsource certain business functions 9%6%3% Restructure executive compensation/severance packages 8%9%5% Implement employee furloughs for select employees without shutting down entire business 8%5%-- Note: Table represents “very likely” responses. In October 2008, respondents indicated changes occurring in the next 12 months. Where possible, October 2009 data are compared with March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008. October 2009 Compared With March 2009 and October 2008

8. Financial Challenges – An Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS? (continued) 8 October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Reduce employee work hours with reduction in pay 6%7%-- Shut down business for short periods of time without paying employees 6%4%-- Implement salary reductions (without reductions in hours) 6%8%-- Acquire or merge with another company 6%2%-- Offer early retirement to employees 6%5%-- Hire more contract/temporary/contingent workers than usual 5%3%-- Reduce organizationwide work week with no reduction in pay 5%4%-- Be acquired or merged with another company 4%1%-- Offer job sharing 4% -- Demote employees to lower-paying positions as a way to save money 3% -- Introduce full-time telecommuting for employees to save on building and maintenance costs 3% -- Go out of business 2%1%-- October 2009 Compared With March 2009 and October 2008 Note: Table represents “very likely” responses. In October 2008, respondents indicated changes occurring in the next 12 months. Where possible, October 2009 data are compared with March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.

9. Financial Challenges – An Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS ? 9 Note: Percentages may not total 100% due to rounding. (n = 371)

10. Financial Challenges – An Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following to occur at your organization in the NEXT SIX MONTHS ? (continued) 10 Note: Percentages may not total 100% due to rounding. (n=371)

11. Financial Challenges – An Update| ©SHRM 2010 Has your organization reduced employee benefits offerings within the PAST SIX MONTHS as a result of the financial challenges to the U.S. and global economy? 11 Note: In October 2008, respondents indicated changes occurring in the past 12 months.

12. Financial Challenges – An Update| ©SHRM 2010 What employee benefits offerings has your organization reduced, frozen or eliminated within the PAST SIX MONTHS due to the financial challenges to the U.S. and global economy? 12 (n = 46) Note: Only respondents who indicated that their organizations had reduced employee benefits answered this question. “Reduced” is defined as “decreased scope and/or amount of benefits offerings from prior levels.” “Frozen” is defined as “benefits offering still exists, but no additional funds are being invested, no new employees are eligible for the benefit.” “Eliminated completely” is defined as “the benefit no longer exists.” “Not applicable” responses were excluded from this analysis. Percentages may not total 100% due to rounding.

13. Financial Challenges – An Update| ©SHRM 2010 What employee benefits offerings has your organization reduced within the PAST SIX MONTHS due to the financial challenges to the U.S. and global economy? 13 October 2009 (n = 46) March 2009 (n = 47) Health care coverage for employees 85% 78% Health care coverage for spouses/dependents 84% 72% Workplace flexibility benefits (e.g., telecommuting, flex time, compressed work weeks) 70% 33% Employer match to defined contribution retirement savings plan (e.g., 401 (k)) 67% 47% The amount of employee leave accruals/balances 64% 35% The amount of employee leave carryover from one year to the next 59% 57% Company-paid relocation programs 58% 55% Paid time off (includes sick, vacation and personal days all in one plan) 47% 44% Defined benefit pension plan 33% 27% Paid sick time only 29% 31% Paid vacation time only 14% 40% Paid personal days only 13% 27% Note: Table represents “reduced” responses. October 2009 Compared With March 2009

14. Financial Challenges – An Update| ©SHRM 2010 Please identify if your company has made cuts in each of the following areas in the PAST SIX MONTHS 14 Note: In October 2008, respondents selected the top five changes that occurred in the past 12 months. Percentages do not total 100% as respondents were allowed to select multiple response options.“Not applicable” responses were excluded from this analysis. Where possible, October 2009 data are compared with March 2009 and October 2008 data. * indicates that this particular option was not asked in October 2008. October 2009 Compared With March 2009 and October 2008

15. Financial Challenges – An Update| ©SHRM 2010 Please identify if your company has made cuts in each of the following areas in the PAST SIX MONTHS (continued) 15 October 2009 Compared With March 2009 and October 2008 Note: In October 2008, respondents selected the top five changes that occurred in the past 12 months. Percentages do not total 100% as respondents were allowed to select multiple response options.“Not applicable” responses were excluded from this analysis. Where possible, October 2009 data are compared with March 2009 and October 2008 data.

16. Financial Challenges – An Update| ©SHRM 2010 Please identify if your company has made cuts in each of the following areas in the PAST SIX MONTHS Publicly owned for-profit companies were more likely than other sectors to cut costs related to professional development Travel costs (excluding per diem) related to professional development: Public FP (79%) > NP (56%), Private FP (53%); large (70%) > medium (45%) Professional development for employees: Public FP (52%) > Private FP (32%) Recruitment-related advertising, travel and reliance on paid recruiters: Public FP (66%) > Private FP (44%) 16 Comparison by Organizational Sector and Staff Size Small = 1-99 employees Medium = 100-499 employees Large = 500 or more employees Note: Privately owned for profit organization = Private FP Publicly owned for-profit organization = Public FP Nonprofit organization = NP

17. Financial Challenges – An Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, what is the likelihood of each of the following areas to experience cuts in the NEXT SIX MONTHS, if they have not already been cut? 17 (n = 371) Note: Percentages may not total 100% due to rounding.

18. Financial Challenges – An Update| ©SHRM 2010 Within the PAST SIX MONTHS, has your organization hired back any employees who were previously laid off due to the financial challenges to the U.S. and global economy? 18 Note: n = 288

19. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Industry Industry Manufacturing—other16% Services—professional, scientific, technical, legal, engineering13% Health care, social assistance (e.g., nursing homes, EAP providers)11% Educational services/education8% Government/public administration—federal, state/local, tribal7% Other services (e.g., nonprofit, church/religious organizations)7% Retail/wholesale trade5% Financial services (e.g., banking)4% Transportation, warehousing (e.g., distribution)4% Construction, mining, oil and gas4% Insurance3% Consulting3% 19 Note: (n=329) Percentages may not total 100% due to rounding.

20. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Industry (continued) Industry Manufacturing—auto/auto-related2% High-tech2% Real estate, rental, leasing2% Services—accommodation, food and drinking places2% Publishing, broadcasting, other media2% Arts, entertainment, recreation2% Association—professional/trade1% Telecommunications1% Pharmaceutical1% Utilities1% Other2% 20 Note: (n=329) Percentages may not total 100% due to rounding.

21. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Sector 21 (n= 328)

22. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Staff Size 22 (n = 274)

23. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Region 23 (n = 306)

24. Financial Challenges – An Update| ©SHRM 2010 Demographics: Organization Operations Location 24 (n = 329)

25. Financial Challenges – An Update| ©SHRM 2010 SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations – An Update Response rate = 16% Sample comprised of 371 randomly selected HR professionals from SHRM’s membership Margin of error is +/- 5 Survey fielded October 29–November 15, 2009 25 Methodology