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Benefits October 29, 2009
A Third of Large Employers Restoring 401(k) Match
October 29, 2009 (PLANSPONSOR.com) - A recent Watson
Wyatt survey of large employers found that 35% of those that
reduced their 401(k) match anticipate reversing that decision
in the next six months - up from 24% in August and 5% in
June.
Reported by Fred Schneyer
A Watson Wyatt news release said 25% of respondents have cut their match, while 56% put in a salary and hiring freeze.
For companies expecting to reinstate their 401(k)
or 403(b) match, 70% will change it back to the original
level, 13% will reinstate the match at a lower level,
while 17% will vary it by year, based on company profits.
According to the survey, more than half (54%) of
employers that froze salaries plan to unfreeze them
within the next six months, a sharp increase from 33% in
August and 17% in June. Almost half (49%) also plan to
reverse hiring freezes at least partially in the next six
months, compared with 38% two months ago.
“The general economic picture right now is definitely
brighter than it was just a few months ago,” said Laura
Sejen, global director of strategic rewards consulting at
Watson Wyatt, in the news release. “However, the recovery
is uneven and most employers aren’t fully convinced that
the improvements they’ve seen are here to stay. While
many plan to hire workers over the next few months, they
remain concerned about their ability to attract and
retain the right people.”
Almost all responding large employers (96%) have made
offers to new hires in the past three months, and the
vast majority (93%) anticipate making offers in the next
three months. However, approximately one-fifth still
anticipate making layoffs in the remainder of 2009 or in
2010.
Looking ahead three to five years, 50% of respondents expect an increase in difficulty in attracting critical-skill employees, and 55% expect an increase in difficulty in retaining critical-skill employees. In light of the recession, 44% of employers have encouraged managers to make greater use of recognition plans.
For companies expecting to make offers to new hires,
83% will do so for professional, non-managerial staff,
followed by 71% for director, manager or middle management
positions. Only 47% will be hiring for senior management or
executive level positions.
The newest survey was conducted in October 2009 and
includes responses from 201 large employers. More
information is available
here
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