I recently read a couple articles that suggest that employers are more inclined to institute layoffs and salary freezes than they are to cut retirement benefits.  I also read an article that suggested that employers are more inclined to decrease or eliminate health benefits rather than institute layoffs.  It seems to me that in these troubled economic times, there is no clear answer as to what is the appropriate solution or the correct way (or the most effective way) to bring down personnel costs.

However, I have a seen a number of articles and press releases from various sources that criticize companies that use cost-control measures like reducing staff or benefit levels as unfair.  Particularly if the company is perceived as a large employer or is viewed as still being "profitable" while taking advantage of the workers.  Executive compensation is obviously in the news and highly paid executives with generous benefits packages make for good villains when employee benefits are generally being cut to make budget. 

It strikes me that in addition to having a sound fiscal plan for taking steps to adjust benefits packages (or to reduce payroll or staff), employers and plan sponsors would do well to prepare a game plan to deal with the public and negative press.  I read an excellent blog post by Alan Metrick of Alan Metrick Communications that can be read here.  He suggests (and I tend to agree) that any good plan for reduction of force or benefits also includes a prepared public message that the employer controls.  It makes sense to me that a plan sponsor should also consider being prepared to answer public questions about plan adjustments (like reduction or elimination of benefits) if challenged by an active media.

So when considering changes to benefit plans that have a negative connotation (like eliminating employer matches to 401(k) plans or terminating life insurance benefits), I encourage plan sponsors to also make a plan to respond to concerns both from employee and the public in advance of these changes.  You might not be able to make everyone happy with your decision, but you will at least be prepared to defend it.