According to Watson Wyatt's ongoing research on the effect of the economy 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. Nevertheless, the survey also found that many employers remain concerned about retaining their top performers.
The main findings of the survey include:
- Thirty-three 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 plan to roll back salary cuts in the next six months, compared with 30 percent two months ago. Additionally, 24 percent of employers plan to reverse reductions to 401(k) match contributions in the next six months, versus 5 percent in June.
- Sixty-six percent of respondents that increased the percentage that employees pay for health care premiums do not expect to reverse that decision.
- Forty percent of respondents are planning to shift more health care benefit costs to workers by increasing the percentage of premiums they pay. Another 41 percent of companies expect to increase the deductibles, copays or out-of-pocket maximums for their 2010 health care plans.
- A majority of employers (52 percent) are now more concerned about retaining their top performers and critical-skill employees than they were before the economic crisis hit.
- In an effort to keep employees engaged, 83 percent of employers have increased communication and 40 percent have held additional employee forums such as town halls or other interactive sessions to address economy-related concerns. While almost half (47 percent) have changed employee roles to expand responsibilities, a far smaller number is expanding the use of recognition programs (27 percent) or creating special compensation programs for high-performing or at-risk employees (18 percent).
Watson Wyatt’s latest bimonthly survey was conducted in August 2009 and includes responses from 175 large employers.