June 7, 2010 SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations—Spring 2010 Update

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Introduction A Comparison of the Financial Challenges to the U.S. and Global Economy poll data from October 2008, March 2009, October 2009 and March 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. Several of the poll questions were updated in March 2009, October 2009 and March 2010 to determine how business were adjusting their strategies in response to changes in the economy. When possible, similar questions and response options from October 2008, March 2009, October 2009 and March 2010 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

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Changes Organizations Made Within the Past Six Months as a Result of the Financial Challenges to the U.S. and Global Economy 3

Financial Challenges – Spring 2010 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. 4 Note: In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October March 2010 (n = 414) October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Made budget cuts across the entire organization 67%73%71%-- Allowed attrition 65%63% 72% Froze employee wage increases 52%54%49%3% Cut employee bonuses 46%48%44%-- Implemented layoffs 43%52%47%48% Retrained employees for new positions in organization 43%42%34%10% Implemented hiring freezes (no new hires) 39%42%52%48% Halted plans for business growth/expansion 32%37%42%-- Did not renew contracts with existing contract/temporary/ contingent workers 30%33%27%21% Outsourced certain business functions 20% 16%-- Hired more contract/temporary/contingent workers than usual 19%16%8%12% Reduced employee work hours with reduction in pay 18% 20%17% March 2010 Compared With October 2009, March 2009 and October 2008

Financial Challenges – Spring 2010 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 March 2010 (n = 414) October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Restructured executive compensation and/or executive severance packages (in addition to what may be specified in federal bailout legislation) 13%15%18%-- Implemented salary reductions (without reduction in hours) 11%15% 5% Offered early retirement to employees 10% 6% Implemented employee furloughs for select employees without shutting down entire business 10% 9%-- Demoted employees to lower-pay positions as a way to save money 9%12%9%-- Offered job sharing 9%7% 5% Acquired or merged with another company 9%6% 9% Shut down business for short periods of time without paying employees 7%8%5%7% Introduced full-time telecommuting for employees to save on building and maintenance costs 6% 4%-- Reduced organization wide workweek with no reduction in pay 5%7%6%-- Had been acquired by or merged with another company 3%2%3%-- Note: In October 2008, respondents indicated changes occurring in the past 12 months. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October March 2010 Compared With October 2009, March 2009 and October 2008

Financial Challenges – Spring 2010 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. Retrained employees for new positions in organization: Public owned for-profit organizations (60%) were more likely to report retraining employees for new positions in their organization than were privately owned for -profit (40%) organizations. Medium-staff-sized organizations (49%) also were more likely to report retraining employees for new positions in their organization than were small-staff-sized organizations (32%). Allowed attrition: Large- (76%) and medium-staff-sized organizations (67%) were more likely to report that they allowed attrition than were small-staff-sized organizations (48%). Did not renew contracts with existing contract/temporary/contingent workers : Large-staff-sized organizations (40%) were more likely to report that they did not renew contracts with existing contract/temporary/contingent workers compared with medium-staff-sized organizations (23%). 6 Comparison by Organization’s Sector and Staff Size

Financial Challenges – Spring 2010 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? 7 Note: In October 2008, respondents indicated changes occurring in the past 12 months.

Financial Challenges – Spring 2010 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? (March 2010) 8 Note: n = 72. 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. Of the 18% of companies that reduced benefits offerings:

Financial Challenges – Spring 2010 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? 9 March 2010 (n = 72) October 2009 (n = 46) March 2009 (n = 47) Health care coverage for employees 75%85% 78% Health care coverage for spouses/dependents 70%84% 72% Company-paid relocation programs 70%58% 55% The amount of employee leave accruals/balances 56%64% 35% The amount of employee leave carryover from one year to the next 53%59% 57% Paid time off (includes sick, vacation and personal days all in one plan) 53%47% 44% Employer match to defined contribution retirement savings plan (e.g., 401 (k)) 48%67% 47% Workplace flexibility benefits (e.g., telecommuting, flex time, compressed workweeks) 46%70% 33% Defined benefit pension plan 38%33% 27% Paid vacation time only 27%14% 40% Paid sick time only 15%29% 31% Paid personal days only 13% 27% Note: Table represents “reduced” responses. March 2010 Compared With October 2009 and March 2009

Financial Challenges – Spring 2010 Update| ©SHRM 2010 March 2010 (n = 314) October 2009 (n = 341) March 2009 (n = 403) October 2008 (n = 633) Travel costs (excluding per diem) related to professional development*52%58%47%- Morale- and team-building activities45%49%51%57% Recruitment-related advertising, travel and reliance on paid recruiters35%47%56%51% Professional development for employees34%37% 44% Reduction in per diem allowance for travel and entertainment28%23%26%19% Refreshments/snacks for employees27%32%33%36% All-staff training on general topics that are not specifically related to company's core business 24%28% 39% Spot awards23%30%32%16% HR-related technology (e.g., applicant tracking and payroll systems)14% 18%23% Tuition reimbursement/education assistance14%20%18%11% Discretionary legal advice13%15%20%13% Volunteer and philanthropic activities12%13%16%15% Recruitment initiatives specifically related to increasing diversity of company's workforce 12%15%18%10% Fitness and stress management initiatives12%16%13% Environmental initiatives (e.g., recycling campaigns)8%6%8%4% Transit and parking subsidies7% 6%2% 10 Please identify if your company has made cuts in each of the following areas in the PAST SIX MONTHS. March 2010 Compared With October 2009, 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, March 2010 data are compared with October 2009, March 2009 and October 2008 data. * indicates that this particular option was not asked in October 2008.

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Actions Organizations Are Likely to Take in the Next Six Months, Assuming the Current Financial Challenges to the U.S. and Global Economy Continue 11

Financial Challenges – Spring 2010 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 ? 12 Note: n = 384. Percentages may not total 100% due to rounding.

Financial Challenges – Spring 2010 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) 13 Note: n=384. Percentages may not total 100% due to rounding.

Financial Challenges – Spring 2010 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? 14 March 2010 (n = 387) October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Freeze employee wage increases 25%33%37%18% Allow attrition 23%29%40%-- Make budget cuts across entire organization 20%34%43%32% Cut employee bonuses 20%32% 21% Implement hiring freezes (no new hires) 20%23%40%26% Not renew contracts with existing contract/temporary/contingent workers 14%18%19%-- Implement layoffs 13%21%24%16% Halt plans for business growth/expansion 12%16%20%-- Retrain employees for new positions in organization 10%13%10%-- Hire more contract/temporary/contingent workers than usual 9%5%3%-- Reduce employee benefits offerings 6%13%5%-- Outsource certain business functions 6%9%6%3% Implement salary reductions (without reductions in hours) 5%6%8%-- Note: Table represents “very likely” responses. In October 2008, respondents indicated changes occurring in the next 12 months. Where possible, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October March 2010 Compared With October 2009, March 2009 and October 2008

Financial Challenges – Spring 2010 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) 15 March 2010 (n = 387) October 2009 (n = 371) March 2009 (n = 462) October 2008 (n = 633) Acquire or merge with another company 5%6%2%-- Offer early retirement to employees 5%6%5%-- Reduce employee work hours with reduction in pay 4%6%7%-- Shut down business for short periods of time without paying employees 4%6%4%-- Restructure executive compensation/severance packages 4%8%9%5% Implement employee furloughs for select employees without shutting down entire business 4%8%5%-- Reduce organizationwide workweek with no reduction in pay 3%5%4%-- Be acquired or merged with another company 2%4%1%-- Offer job sharing 4% -- Demote employees to lower-paying positions as a way to save money 2%3% -- Introduce full-time telecommuting for employees to save on building and maintenance costs 2%3% -- Go out of business 1%2%1%-- March 2010 Compared With October 2009, 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, March 2010 data are compared with October 2009, March 2009 and October 2008 data; a dash (--) indicates that this particular question was not asked in October 2008.

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Assuming the current financial challenges to the U.S. and global economy continue, which employee benefits offerings is your organization likely to reduce, freeze or eliminate in the NEXT SIX MONTHS? 16 Note: n = 52.Only respondents who indicated that their organizations were likely to reduce employee benefits answered this question. “Reduce” is defined as “decreased scope and/or amount of benefits offerings from prior levels.” “Freeze” is defined as “benefits offering still exists, but no additional funds are being invested, no new employees are eligible for the benefit.” “Eliminate 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. Of the 31% of companies that indicated they were likely (“very likely” or “likely”) to reduce benefits offering in the next six months:

Financial Challenges – Spring 2010 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 Note: n = 356. Percentages may not total 100% due to rounding.

Financial Challenges – Spring 2010 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

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Industry Industry Manufacturing18% Health care, social assistance (e.g., nursing homes, EAP providers)13% Services—professional, scientific, technical, legal, engineering8% Educational services/education6% Financial services (e.g., banking)6% Other services (e.g., nonprofit, church/religious organizations)5% Retail/wholesale trade5% Transportation, warehousing (e.g., distribution)5% Insurance5% Construction, mining, oil and gas4% 19 Note: n = 367. Percentages may not total 100% due to rounding.

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Industry (continued) Industry Government/public administration—federal, state/local, tribal4% Consulting4% High-tech3% Arts, entertainment, recreation3% Utilities3% Services—accommodation, food and drinking places2% Telecommunications2% Association—professional/trade1% Publishing, broadcasting, other media1% Pharmaceutical1% Real estate, rental, leasing1% 20 Note: n=367. Percentages may not total 100% due to rounding.

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Sector 21 Note: n= 365

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Staff Size 22 Note: n = 300

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Region 23 Note: n = 306

Financial Challenges – Spring 2010 Update| ©SHRM 2010 Demographics: Organization Operations Location 24 Note: = 362

Financial Challenges – Spring 2010 Update| ©SHRM 2010 SHRM Poll: Financial Challenges to the U.S. and Global Economy and Their Impact on Organizations – Spring 2010 Update Response rate = 16% Sample comprised of 419 randomly selected HR professionals from SHRM’s membership Margin of error is +/- 5 Survey fielded March 30 - April 13, Methodology