Some Good News For Workers


August 22, 2009|By HANAH CHO

For workers who have seen cuts in pay and benefits during the past year, there is some good news on the horizon.

More employers plan to reverse salary cuts and reinstate benefits within the next six months, according to a new survey by consultant Watson Wyatt.

Based on responses from 175 large employers, 33 percent of them said they plan to unfreeze salaries, up from 17 percent two months ago.

When it comes to rolling back pay cuts, 44 percent plan to do so, compared with 30 percent two months ago. And 24 percent of employers plan to restore 401(k) matches, up from 5 percent.

Companies are increasingly making such moves because they feel their business is beginning to stabilize or improve, says Laura Sejen, Watson's global director of strategic rewards consulting.

"It's not just about results improving because we've implemented all these cost-saving measures, but there's improvement in demand and revenue is improving," Sejen says.

Still, employees will not likely see immediate changes as companies roll back cuts in the next six to 12 months, Sejen says.

"2009 will continue to be lean," she says.

Since October, Watson has been conducting the survey to gauge cost-cutting moves by employers amid the recession. Sejen says companies implemented multiple cost-cutting moves at once, such as curbing travel, cutting back work hours and imposing temporary work stoppages.

"In many cases, they were taking a variety of actions in order to avoid or minimize layoffs," Sejen says.

One major area that employers are not relenting on is health care. Sixty-six percent of employers that increased employee contribution for health care premiums don't plan to reverse that decision.

In fact, 40 percent of employers plan to shift more of the costs to workers by increasing the percentage of premiums they pay. An additional 41 percent of companies expect to increase the deductibles, co-pays or out-of-pocket maximums for next year's health care plans.

"In addition to the impact of the down economy, you're just seeing a manifestation of companies' ongoing difficulties and challenges in managing the costs of health care," Sejen says. "Whatever increases companies have asked employees to share or shoulder, that's likely coming on top of previous increases. That's a trend that's been in place for a while."

Workplace tidbit: More employers are screening potential employees using social media and networking tools, according to a new CareerBuilder survey.

Of 2,600 hiring managers, 45 percent said they use social networking sites to research job candidates, up from 22 percent last year. And 11 percent say they plan to start using sites such as Facebook, LinkedIn and MySpace to screen job seekers.

Employers also search personal blogs and Twitter, according to the survey.

Among the reasons why employers disregarded candidates after screening job seekers online: provocative and inappropriate photographs or information; content about drinking or drug use; and candidates bad-mouthing previous employers.

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