As companies hurt by the recession turn to benefit and workforce cuts, experts say communicating harsh changes must be dealt with delicately and informatively to avoid hurting employee morale.

Salary freezes, salary cuts, shortened work weeks, halting 401(k) matches and layoffs are almost a daily event in many business sectors as employers navigate the tough economy.

Experts say employees are aware of the economic downturn and many are worried about their personal future. But experts say companies still should tread carefully when deciding how to communicate changes that usually mean less money in employees' pockets.

Transparency, without the spin, is a best practice for companies that are scaling back, experts say.

“We want (employers) to be straightforward and empathetic,” said Nicole Melton, a Philadelphia-based senior consultant and communication practice leader with Watson Wyatt Worldwide Inc. “Be candid.”

“Share the financials with them,” said Ken Groh, a Chicago-based vp of the communication group with Aon Consulting Inc. “Show them exactly why you have to do this.”

That's what JohnsonDiversey Inc., a Sturtevant, Wis.-based provider of commercial cleaning products and services, did when it decided last year to convert its health care program from a traditional preferred provider organization plan to a consumer-driven plan and its retirement program from a pension to a 401(k) starting this year, said the company's head of compensation and benefits.

Both moves put more financial responsibility on workers.

Todd Blazei, vp of total rewards for JohnsonDiversey, said the company was aware employees might view the changes negatively. That's why the company spent months planning how it would break the news.

In the end, the company disclosed the changes in waves. First, the company's chief executive officer delivered what Mr. Blazei described as an in-depth video presentation discussing the company's struggles in keeping up with rising health care costs and pension obligations.

Then, employees received two newsletters within two months, highlighting the changes to their health benefits and retirement plans. Roughly one month before open enrollment began, JohnsonDiversey hosted town hall-style meetings, by phone and in person, for employee questions.

By then, the affected 2,000 U.S.-based employees had few questions and concerns, Mr. Blazei said.

“People understood why,” he said. “We presented a clear business case for making the changes. Employees heard the same message several times. It wasn't watered down and they got the information.”

Experts say such a superinformative method, delivered by those in key leadership positions, is the best way to approach employees with benefits changes. While companies may not have months to prepare, communicate and make benefit changes, they still should make a thorough presentation.

Ms. Melton said one major pitfall for employers to avoid is assuming workers understand why the company is scaling back. Employees, she said, want to see the numbers. Companies that fail this sort of disclosure risk employee morale, she added.

There is a trust factor that gets lost when employers leave their employees out of the loop on specifics, said Mr. Groh. “This is particularly sensitive now because people think they did nothing wrong and they think that it's the greed on Wall Street,” he said. “You can see why employees can be angry and demoralized.”

That's why experts say leadership visibility is important when a company makes changes. “There's no room for innuendo,” said Ms. Melton.

This leads to another pitfall for companies to avoid: the lack of empathy from front-line managers and top executives in initiating such changes, she said.

“Employees do understand... We're inundated with the news on how the economy is affecting the world and employees want to know how solvent their company is, but they need to know this information is coming from human beings,” said Ms. Melton. “They want to know how this is affecting everyone in the company.”

Memphis, Tenn.-based FedEx Corp. put empathy into play last year when it trimmed executive salaries within weeks of reducing retirement contributions, a company spokeswoman said. The point, she said, was for employees to understand that the economy was affecting the entire company from those who wear pressed suits to those who deliver the packages.

Not all companies, however, will tackle areas such as executive pay when trimming their budgets, and some may be operating in the black while still trimming employee benefits, experts agree. This can muddy the water when getting the message across, Ms. Melton said.

To avoid demoralizing the workforce, Ms. Melton said employers must do a good job in presenting their financial picture to justify whatever changes are made.

“The recession hits various industries at different times,” Ms. Melton said. “That's why companies need to let people know the business consequence of inaction.” For example, a company could be forced to lay off more workers or go out of business altogether if it keeps compensation and benefits the same, she said.

“Dialogue between employers and employees is a must,” Mr. Groh said. “The message has to be, "We are in this together.' Some companies have come out and said they do not want to lay people off, so instead they are going to a four-day workweek, for example. If you share the information the right way, people will get it.”