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Posted on Thu, Oct. 23, 2008 10:15 PM
Survey offers pessimistic outlook for workers in many large U.S. companies
More News
Reduced hours, smaller bonuses and tinier raises are on the horizon for workers in many large U.S. companies, according to a Hewitt Associates survey released Thursday.
Results from 411 large companies surveyed concluded that 42 percent of them were revising their salary budgets for 2009 because of the slumping economy and other increasing costs.
For the cutting-back companies, 2009 pay raises will be an average of 1 percentage point lower than what they had planned for earlier.
The cutback will create a pay raise average of 3.1 percent — the lowest projected base salary growth since Sept. 11 caused cuts.
A less-pessimistic outlook was issued by Mercer, which Thursday said 24 percent of the 190 midsize and large employers it surveyed planned to reduce their 2009 pay budgets by one-half percent from what they expected to allocate when they last were surveyed, in April.
The companies Mercer surveyed now plan average raises of 3.6 percent.
In the Hewitt report, two-thirds of the companies surveyed said they expected to cut planned bonuses this year by about 10 percent, and 42 percent said they would probably do the same in 2009.
Hewitt officials said the cuts also would be felt because employees were being asked to shoulder more of their health care insurance costs and they were dealing with inflation at the grocery store.
On the bright side, Hewitt said the move toward variable pay meant that the best-performing workers would continue to be rewarded.
Hewitt also found that:
•52 percent of the companies were considering a hiring freeze.
•55 percent were considering staff reductions.
•25 percent planned fewer promotions.
•15 percent were thinking of freezing pay.
Related data from the Mercer survey showed that 30 percent of the companies intended to make staff reductions and 37 percent were pondering cuts.
Mercer also found that 32 percent of the companies would curtail hiring below replacement levels.
Again, good news for high performers: Mercer said the top 15 percent of staff should see an average raise of 5.3 percent, compared with 3.4 percent for “average” workers.
To reach Diane Stafford, call 816-234-4359 or send e-mail to stafford@kcstar.com.
Posted on Thu, Oct. 23, 2008 10:15 PM
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