A Third of Large Employers Restoring 401(k) Match
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.
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, and 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 to 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. “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%) anticipates making offers in the next three months. However, approximately one-fifth still anticipates 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 study is available here.
