August 13th, 2009
A Little Light at the End of the Recession Tunnel
Never let it be said that I like to dwell only on bad news. As a longtime member of America’s workforce, I’ve been zinged, zapped and zipped by the Big, Bad Recession just like everyone else. And that’s why I am grateful for whatever positive workforce-related news that I can find.
Here’s what I’m talking about, courtesy of global consulting firm Watson Wyatt Worldwide and its latest survey on the “Effect of the Economic Crisis on HR Programs”: The number of employers planning to reverse salary cuts and freezes and restore matching contributions to 401(k) plans has increased in the past two months, according to a survey that was conducted this month with 175 large, U.S.-based employers.
Key findings include:
• Some 33 percent of employers that froze salaries plan to unfreeze them within the next six months, up from 17 percent two months ago.
• Forty-four percent say they plan to roll back salary cuts in the next six months, compared with 30 percent two months ago.
• Twenty-four percent of employers plan to reverse reductions to 401(k) match contributions in the next six months, versus 5 percent in June.
• Seventy-one percent of respondents have made some changes to their 2010 health care plan because of the economic crisis. The most commonly reported changes include increasing deductibles, co-pays or out-of-pocket maximums (41 percent) and increasing the percentage of premiums paid by the employee (40 percent).
In other words, although salary freezes may start coming off, increases in employee costs for health care benefits this year are probably going to stick around.
“Some employers are seeing the light at the end of tunnel and feeling optimistic about the prospect of improved business results,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt, in a news release about the survey. “However, even as some of the program cuts are rolled back, many employees are facing smaller raises, lower bonuses and higher health care costs.”
That’s a sobering reality to keep in mind. Yes, there are signs that the recession has bottomed out and that things will start getting better, but it is going to be a long, slow climb back. We will all continue to feel the pinch for months—and as I pointed out yesterday, perhaps even many years—to come.
TrackBack
TrackBack URL for this entry:
http://workforce.com/wpmu/bizmgmt/2009/08/13/a-little-light-at-the-end-of-the-recession-tunnel/trackback/
Comments
Post a comment
Blog Index















Interesting findings, John. At Yoh, we’re starting to see the hiring activity at most of our clients start to increase, and are beginning to add headcount to areas where it was previously affected in the past 12 months. Overtime for recruiters that was previously halted is now being approved too. We certainly hope this trend is long-lasting, but want to remain cautiously optimistic. There’s certainly no quick fix here.
- Alison Citti, Blogger, The Seamless Workforce (www.theseamlessworkforce.com)
Posted by: Alison Citti | August 18th, 2009 at 6:38 am