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)
