However, 17% are considering doing so, according to a Mercer press release about its Leading Through Unprecedented Times survey.
More than three-quarters of respondents (77%) say they expect to review investment and administrative fees, which Mercer said may be due to pressure from regulators as well as the decline in investment values. Eighty-five percent of respondents reported they will likely enhance employee education and communication regarding investment choices, objectives and options, and three-quarters of respondents will likely review their fund line-ups, the press release said.
In line with their anticipated actions, when asked to gauge employee concerns related to the economic turmoil, 54% of respondents said that employees expressed a significant level of concern about the impact of economic turmoil on their retirement investments, compared to 37% who said employees expressed significant concern about the health of the company, and 34% who said employees have a high level of anxiety regarding their job security.
For defined benefit plans, employer focus will be primarily on understanding and reducing risk. Changing investment strategy (46%) is reported by survey respondents as the most likely method companies will take to reduce risk rather than changing funding policies (31%). Twenty-four percent of respondents are considering cutting back or stopping accruals, but only 4% say they are very likely to do so.
Health benefit plans seem safe as 84% of survey respondents indicated their company is unlikely to eliminate any health or group benefit programs to cut expenses. Companies instead are more likely to intensify efforts to understand the root causes of increasing costs (77%) and add wellness programs to improve health-related behaviors and increase employee engagement (76%), according to the survey results.
However, 53% of respondents indicate their company will likely increase employee contributions, particularly those representing companies with operations in the U.S. (67%), and 59% of respondents representing companies with operations in the U.S., compared to a survey average of 47%, report they may shift more health costs to employees through such mechanisms as higher deductibles.
Globally, 81% of respondents to Mercer's Leading Through Unprecedented Times survey expect their company's business performance to decline in 2009. The most pessimistic are respondents with operations in Japan and Hong Kong (90% expect such a decline), while the most optimistic are respondents with operations in Canada and the United States (72% and 82% expect a decline, respectively).
More than one-third of respondents (35%) expect to make significant reductions in their workforces, according to Mercer's press release. By industry, respondents representing 48% of manufacturing firms and 48% of technology firms will likely reduce their workforces by significant levels, compared with 24% of those representing professional services firms and 28% from retail and wholesale firms.
Despite the weak economy, talent shortages still exist for key skill sets and selective hiring remains a top priority for employers, the survey shows. While more than two-thirds of respondents (69%) will likely curtail overall hiring to below replacement levels, the same number will likely hire top talent at originally planned levels.
Seventy percent of respondents do not expect to reduce the number of staff on international assignments; however, 42% expect to review international assignment programs and policies as part of expense control.
The majority of respondents (73%) say they are now likely to reduce salary increases in 2009 from those originally budgeted. Only 12% of respondents said freezing wages at 2008 levels is a highly likely course of action. Sixty percent of respondents expect to reduce 2009 bonus payouts based on 2008 performance.
In an environment in which they are asked to operate with reduced resources, 62% of respondents say they are likely to reduce planned investments in HR services. However, nearly twice as many respondents (38%) said that they planned to maintain the level of HR investments as those who said they are "highly likely" to make such cuts (21%). In addition, 75% of survey respondents said that their company is not likely to invest more to outsource HR functions in 2009.
Two-thirds of respondents view an increase in merger and acquisition (M&A) activity as unlikely. However, 47% of respondents in both France and Australia expect that M&A activity will likely increase in 2009.
The survey, conducted in early November, yielded responses from 1,028 human resource and finance professionals representing organizations with operations in more than 100 countries. More information is at www.mercer.com/unprecedentedtimes .