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HR departments selective in planning for tough year
NEW YORK (1/6/09)--Human resource departments--especially those in the finance sector--are planning for a tough year. A global survey finds that companies remain selective in planning their work force, pay and benefit cuts to weather the economy. Employees are most worried about the economic turmoil’s impact on their retirement plans, according to the survey, conducted by Mercer, a provider of consulting, outsourcing and investment services. In the survey, 81% of respondents said they expect a decline in their company’s business performance during 2009, with 35% indicating they likely will make significant work force reductions. Most respondents said they likely will curtail overall hiring, reduce salary increases and cut bonus payouts while using selective hiring to continue hiring talent to fill shortages in key skill sets. Worry about retirement investments tops the list of employee concerns, outweighing employee anxiety about job security. Eighty-three percent said they don’t expect their companies to reduce the level of employer contributions to defined contribution retirement plans, and 77% expect to review investment and administrative fees, possibly due to pressure from regulators as well as the decline in investment values. Most (73%) said they are now likely to reduce salary increases in 2009 from those originally budgeted, with 12% indicating they would freeze wages at 2008 levels. This is is more likely in certain industries-- including banking and technology. Sixty percent expect to reduce 2009 bonus payouts based on 2008 performance, and about 75% in the financial sector likely will reduce 2009 bonus payouts. The finance sector also tops the list of industries likely to change variable pay programs. That sector is twice as likely as other sectors to do so, with 28% saying their financial companies plan to change or develop new variable pay programs. Most will hold off on defined contribution cuts and most health benefits programs are safe, with employee contributions likely to rise. The survey of more than 1,000 human resource officers and finance personnel from more than 100 countries was conducted in early November.
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