"As the economic downturn has both broadened and deepened, companies in almost every industry can no longer stay the course," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "The need to contain costs has resulted in stronger measures that are ultimately affecting more workers."
Companies are taking a number of different actions to help them manage costs. Findings show that almost two-thirds of companies have already taken five or more of the actions in the table above.
"All indications are that 2009 will be a difficult year for both companies and ultimately employees," said Sejen. "It will be up to employers to find an effective way to manage this challenge by balancing their financial situations with the likely impact on employee engagement."
Other findings:
- Those companies that have already made or are planning to make layoffs indicated that this strategy would affect approximately 5 percent of their employee population.
- Sixty-one percent of employers reduced their planned merit increase for next year from 3.8 percent to 2.5 percent.
- Almost six in ten employees (59 percent) have moved their 401(k) or 403(b) investment mix out of equities, compared with just over half (53 percent) in October. The number of employees taking loans has jumped from 19 percent to 27 percent in the same period.
- Short-term incentive funding has not changed substantially from October -from a median of 100 percent funded last year, current STI funds stand at 80 percent funded.
