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June 12, 2009

HR Fact Friday: Have Cutbacks Peaked?

Filed under: General HR Buzz6:00 am

Tough economic times require that difficult decisions be made at all levels of a business enterprise to remain profitable, break even, or even minimize losses to ride out the storm. With employee costs such as compensation, benefits, etc. most often being a company’s highest expense, HR departments are often in the eye of the storm when cost cutting actions are required.

An April 2009 Watson Wyatt report titled, “Effect on the Economic Crisis on HR Programs” shows that the majority of companies are not planning cost-cutting actions for the next 12 months.

  Have already made change and do not expect to make further changes No changes made or expected
Layoffs and reductions in force 31% 22%
Organizationwide restructuring 25% 40%
Salary freezes 43% 33%
Reduced workweeks 6% 75%
Salary reductions 14% 75%
Reduced employer 401(k)/403(b) matches 18% 70%

Source: HR Magazine (SHRM) June 2009 (pg 20)

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