Employers Reversing Pay and Staffing Decisions from Downturn

September 30, 2009 (PLANSPONSOR.com) - As the U.S. economy shows signs of stabilization and employers see potential improvement in their business prospects, they are reversing strategies taken to manage through tough economic times, according to CareerBuilder and USA TODAY's Q4 2009 Job Forecast.

Of employers who had layoffs in the last 12 months, one-in-four (26%) reported their company is planning to bring back some employees they let go earlier in the year. Of those rehiring laid off workers, 23% already started extending job offers to former employees in the third quarter, while 19% will begin to do so in the fourth quarter, according to a press release.

Twenty-one percent will start bringing back laid off employees in the first quarter of 2010, while 15% are waiting until the second quarter of 2010.

Nearly one-in-five employers (18%) reported their organizations implemented pay cuts in the last 12 months. Five percent of these employers reported they restored pay to previous levels in the third quarter, while 12% plan to do so in the fourth quarter.

Seventeen percent expect pay to return to normal in the first quarter of 2010, and 7% expect it will be the second quarter, while another 7% are predicting the latter half of 2010. One-in-ten (12%) stated their organizations do not plan to restore pay to previous levels until 2011 or 2012, while 41% are not sure.

The survey shows that, while employers are feeling more optimistic about the economy and job market, the majority plan to keep their staff levels the same for the remainder of the year. Seventeen percent of employers expect to add full-time, permanent employees, while 10% anticipate a decrease in headcount. Sixty-eight percent anticipate no change, and 5% are undecided.

The number of employers who increased their full-time, permanent headcount in the third quarter was unchanged from the second quarter at 18%. Fifteen percent of employers reported declines in staff levels in the third quarter, an improvement from 17% in the second quarter. Sixty-five percent of employers reported no change in their number of full-time, permanent employees.

The survey was conducted by Harris Interactive from August 20 to September 9, 2009. More than 2,900 hiring managers and human resource professionals participated.