What HR managers said: The outlook for business
June 26, 2009 by Jim GiulianoPosted in: In this week's e-newsletter, Incentives, Latest News & Views, Leave, Money, Pay and benefits
A survey asked HR managers to predict their company’s key human-resources indicators. Here’s what they said.
The survey by WatsonWyatt found that 62% of companies that have made hiring freezes and 69% of those that have made salary freezes plan to eliminate freezes within the next 12 months. And 48% that have reduced their employer 401(k)/403(b) matches plan to reinstate them over the next year.
More responses predicting 3-to-5-year trends at their companies:
- Employees working past retirement age?
More: 79%
No change: 18%
Fewer: 2% - Portion of healthcare costs paid by employees:
More: 73%
No change: 24%
Less: 3% - Difficulty retaining critical-skill employees
More: 45%
No change: 45%
Less: 11% - Salary-increase levels
More: 28%
No change: 45%
Decrease: 26% - Staff sizes
Increases: 22%
No change: 26%
Decreases: 52% - Employer contribution to 401(k) and similar plans
Increase: 7%
No change: 76%
Decrease: 17%
More findings:
- 24% of the companies surveyed believe their results have “bottomed out,” approximately double the number of participants who thought so in April.
- 82% that will reverse hiring freezes will do so only partially, and retain them for some locations or positions.
- 78% of those who expect to reverse a salary freeze will do so for all employees, and 78% of those who expect to reverse a salary reduction will restore salaries to original levels.
- 39% will reverse at least some of their travel restrictions in the next 12 months or sooner.
- 55% noticed a decrease in participant contributions to 401(k) or 403(b) plans.
Click here to see the full report.
Tags: 401(k), 403(b), WatsonWyatt
June 28th, 2009 at 3:50 pm
Good article. Sobering assessment. Based on feedback from many clients it’s right on the mark.
June 29th, 2009 at 10:17 am
Very encouraging news. Other HR professionals that I have spoken to have indicated that their companies will consider salary increases for 2010.
July 6th, 2009 at 10:00 am
Our bank actually provided salary increases (3% average) at the beginning of 2009 and have not cut our 401(k) match. The bank is on par with 2008 resutls when and adjusted for the additional FDIC premium.
July 7th, 2009 at 7:55 am
We paid our accured bonuses this year but froze increases under the assumption that in a financial meltdown with layoffs and businesses collapsing, and deflation, it would be difficult to calculate where salaries would settle once the economy recovered. Didn’t want to increase permanent labor costs until we knew where the compensation “market” would settle at. We did not freeze 401k matches since they are long-term savings plans – the meltdown is a short-term event. Would expect, provided the economy turns, we’ll be able to look at increases in early 2019.