Remember me talking about cut backs at work? It was a small thing flavored coffee but I noticed we got one more box of them and no replacements since. I wasn't feeling bad about the flavored creamer I can make do with regular or bring some from home. I was wondering what else would I notice missing. I found out today toilet seat covers but this isn't as bad as this article I read today.
Many employers will frantically ax jobs in the coming months in an
effort to improve their bottom lines. Other companies will wield a
scalpel to whittle out cost savings from employee perks. A whopping
86 percent of companies expect recent financial market changes to
affect employee benefits in the next year, according to a recent survey.
Here's a look at the where employers are likely to make cuts.
Layoffs. Large employers, including Citigroup and Sun Microsystems,
have already begun massive layoffs. Americans lost 240,000 jobs in
October. And the current 6.5 percent unemployment rate is the highest
since 2004. Analysts predict that many more layoffs are still to come. A
mid-October survey of 248 companies by the consulting firm Watson
Wyatt found that 26 percent of employers expect to make layoffs in the
next 12 months.
Hiring freezes. Firms are likely to institute multiple cost-saving measures
in tandem. "No single action here is going to help companies weather the
storm," says Laura Sejen, global director of strategic rewards at Watson Wyatt.
"Companies are looking at the full array of cuts they might make, and I think they
are pulling a number of these triggers." As an alternative or in addition to layoffs,
companies may stop hiring new people and leave some vacant positions unfilled. A
quarter of the companies Watson Wyatt surveyed plan to freeze hiring in the next
Higher health costs. Premiums for employer-sponsored health insurance climbed
to $12,680 annually for family coverage this year. Employees pay an average of
$3,354 out of their paychecks to cover their share of the cost, according to a
Kaiser Family Foundation survey of 2,832 companies. "Health insurance is
steadily becoming less comprehensive," says Kaiser President and CEO Drew
Altman. "With rising deductibles, more and more people face a substantial
amount out of pocket for their healthcare before their insurance fully kicks in."
About 18 percent of employees currently have deductibles of at least $1,000,
up from 12 percent last year. And 25 percent of companies plan to increase
employee contributions to health insurance in the next year, Watson Wyatt
Travel restrictions. Extravagant company travel may be a thing of the past
in many industries. Some 34 percent of companies have already added or
increased restrictions to the company travel policy, and an additional 25
percent plan to do so soon. Some companies are cracking down on nonessential
travel and increasing Internet and teleconferencing as an alternative to meetings
in person. Many employees are also being encouraged or required to use public
transportation for local trips and book economy flights for necessary travel.
Training cuts. Helping employees to develop advanced skills usually helps the
bottom line of a company. But on-the-job training is expensive and time intensive,
and immediate results are not always realized. Some 18 percent of companies plan
to reduce or eliminate training for employees. Keeping your skills up to date on your
own, however, could help keep you employed.
Canceled parties. Most industries aren't feeling very jolly this year. About 19
percent of companies have either downgraded or canceled the holiday party, and
an additional 18 percent plan to, Watson Wyatt found. A handful of companies--
mostly manufacturing firms--even plan to institute mandatory holiday shutdowns
to save on operating expenses.
Salary freezes. Workers used to getting an annual cost-of-living raise may be out
of luck next year. Four percent of companies have already frozen salaries and 12
percent more plan to. "As a cost-saving measure, it can have a fairly significant
impact in terms of managing increases in cost," says Sejen. "Typically, it would
be for 12 months, and then the organization would revisit the decision."
Reduced merit increases. Don't count on getting a large holiday bonus or merit
pay increase next year either. Approximately 28 percent of employers have already
reduced their merit pay budgets because of recent financial events. Among those
employers, the projected raise is now 2.5 percent for 2009, down from 3.7 percent.
Pension freezes. Many companies no longer want to bear the burden of providing
traditional pensions for employees. Sometimes companies stop allowing new
employees to join the plan. Other firms promise to pay the benefits already accrued
but don't allow workers to earn any additional benefits. Some 11 percent of companies
have already frozen their pension plans and an additional 4 percent plan to do so in the
next year, Watson Wyatt found.
Cut 401(k) matches. Several large companies, including General Motors and Frontier,
have stopped contributing to employees' 401(k) plans. Another 4 percent of companies
plan to eliminate the match in the next year. "Whether or not your employer is able to
match your contribution, it is still of the utmost importance for American workers to
continue contributing," says Tom Ruggie, founder and president of Ruggie Wealth
Management in Tavares, Fla. "Investors must not forget that the compounding growth
of a 401(k) over time will allow them to grow additional assets off of savings they continue
to put in." Many companies, including Ford Motor Co. and Charles Schwab, eliminated
their 401(k) matches during the last recession, but returned them later when the bottom
line improved. Let's hope that employers return these valuable benefits and perks after
this downturn as well.
I haven't been at work long enough to receive my company's match but I contribute up to the 6% the company will match. No one has said anything but if they are trimming small expenses now then there won't be many other expenses to cut later. We had a Thanksgiving potluck which I understand is traditional but for Christmas there is normally a sit down dinner for Christmas. I'll keep you posted.