The survey discovered that 62% of companies that made hiring freezes and 69% of companies that froze salaries plan to eliminate them within the next 12 months. Almost half (48%) of companies that reduced their employer 401(k)/403(b) matches also plan on reversing their decision within the next year.
Unfortunately, not all of the affected employer benefits will experience the same changes. One in five employers plan to keep salary reductions in place and 46% of employers do not plan on reversing the increases in the percentage that employees now pay for health care premiums.
"While more employers now feel the worst of the current downturn may be behind them, most are not expecting to go back to 'business as usual'," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "The challenge for companies will be to determine which cost-cutting changes can be reversed and which will become ingrained into the permanent business environment." (Yahoo! News)
In the next three to five years, companies expect staffing issues including difficulties in attracting and retaining skilled employees to extend long-term. They also expect staff sizes to be significantly smaller than pre-economic levels.
Compared with pre-economic crisis levels, the companies surveyed expect the following changes within the next three to five years:
- 45% foresee difficulty retaining critical-skill employees
- 41% expect increased difficulty attracting critical-skill employees
- 50% expect no increase to current salary levels
- 52% expect to see a decrease in staff sixes
- 76% expect no change in employer contributions to defined contribution plans (e.g., 401(k))
The survey also found that nearly one quarter (24%) of the companies surveyed believed their results have “bottomed out,” double the number of survey participants that said the same in April.
"Laying off workers and cutting back on pay and benefits are never easy decisions to make. Now, companies are now looking to the new economic landscape that lies ahead," said Laurie Bienstock, U.S. strategic rewards leader at Watson Wyatt. "The challenge for employers is to reassess short-term cost cuts and ensure they have the right workforce and resources in place to meet the organization's long-term financial goals." (Yahoo! News)