Some plan retention bonuses, but half of U.S. companies will withhold pay increases, cut discretionary spending in ugly economy.
By Garry Kranz Comments 0 | Recommend 0
Downsizing: To survive arguably the most difficult economic prospects since
the Great Depression, U.S. companies face a tough task: how to continue growth
as business activity in general shrinks. However, in a departure from past
recessions, companies are not looking at massive layoffs as a solution,
according to consulting firm Towers Perrin. Companies will continue to cut jobs,
but plan to do so in a “more targeted, strategic” fashion, while also slashing
spending in all but the most necessary areas.
The good news: Two-thirds of companies don’t foresee employee layoffs looming
on the horizon. The bad news: Nearly half the 450 companies are “somewhat or
very likely” to contract spending on pay and merit increases, while nearly as
many (39 percent) plan to slash annual bonuses and other cash incentives.
Wisely, though, companies are considering cash-retention bonuses (30 percent) or
targeted salary bumps (41 percent) as a way of keeping their best performers
from taking jobs elsewhere.
Workforce Management contributing editor Garry Kranz is based in Richmond, Virginia. E-mail editors@workforce.com to comment.
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