Warning on communication budgets

The company said the credit crunch was forcing businesses to re-think their budgets and cut anything that was not considered a legal requirement.

JLT client manager Alex Tullett said companies could be stopping internal communication through products such as total reward statement when employees needed information the most.

Tullett said what to employers is a logical cost cutting measure could be misunderstood by employees as a lack of interest in their flexible benefits.

"Anything other than a legal disclosure requirement comes under risk when cutting costs. The problem is if internal marketing is cut, employees think their contributions are not being valued. Businesses need to think of alternative methods of delivery such as on-line or paper-based methods. They need to think of better ways to communicate."

But Tullett warned that no communication model is ever going to be free of cost, and that businesses needed to enhance their communication platforms rather than increase the long-term cost of doing nothing.

Tullett added that increasing pension fund deficits, high inflation and crushing commodity prices were fuelling a feeling "that everything is terrible".

"Shares in share plans are dropping, times are a bit tough. But it’s wrong not to communicate. There is bad news about the economy but there is also good new employers can provide – benefits are still be provided despite this."

Tullett said if an employers and trustees did not communicate market fluctuations and volatility, employees could make the wrong choice when it came to investments, which could damage the future security of their benefits.

"The share market is dropping and total rewards statement have stopped, people suddenly think it’s time to get out of cash, when it’s not. We need to communicate or employees are going to make bad investments," he added.