That’s good news, as is the fact that more employers are bringing back the benefits they were forced to freeze during the worst of the recession. During tough times, many companies slashed 401(k) matches, merit-based raises and bonuses, and other employee perks to help cut costs. A recent USA today article, however, shares some encouraging results from a report from human resources consultancy Towers Perrin:
=> Nearly two-thirds of firms that locked in salaries last year will start offering raises again in 2010
=> Approximately one-third of firms that dropped 401(k) matches will increase or restart those company contributions next year
And many of these companies are reinstating these benefits for the best of reasons: To motivate and retain their most valuable employees, so they don’t walk out the door as the economy (and job market) strengthens.
"When you start coming out of a recession, people remember how they were
treated," says Fred Crandall, a Watson Wyatt senior human resource consultant. "Some people who feel like they've been given a raw deal will jump ship." USA Today
Yet many of these benefits won’t be as robust as they once were. Gone are the days of the usual 401(k) match of 50 cents on the dollar, up to 6% of pay. Many companies, like FedEx, will offer smaller matches. Other companies will look at certain factors when adjusting benefits, such as tying 401(k) matches to quarterly or annual financial performance.
And what about raises? They may return in 2010, but not in an across-the-board, one-size-fits-all fashion. Four in 10 employers in the Towers Perrin report stated that they will differentiate among employees when considering salary increases, doling out the highest raises to only the highest achievers. A weak employee may see no raise at all.
While these re-emerging benefits will be a welcome change to employees in the new year, employees shouldn’t assume it’s business as usual in 2010. Most employers will be extremely cautious when reinstating benefits, keeping a close eye on the economy’s recovery.
“More organizations are being much more clear that benefits such as 401(k) matches are discretionary,” says Brad Kimler, executive vice president of Fidelity’s Consulting Services business.
What about your company? Are you in a position to start bringing back some of the benefits you placed on the back burner in 2009? Do you see the economy - and your business - rebounding enough in 2010 to reinstate 401(k) matches, raises and other benefits? We'd love to hear what's happening in your corner of the world!