business survey shows cutbacks, layoffs prevalent
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[December 20, 2008]
DOWNERS GROVE -- The Management
Association of Illinois released results Wednesday of its Economic
Conditions Survey, in which 196 Illinois employers revealed their
tactics and plans for dealing with the current economic situation.
Results clearly indicate that the economy is dictating decisions
related to compensation, staffing, scheduling, benefits, and other
employee-related policies and practices. There are a wide variety of
cost-cutting measures already being employed in response to the
global financial crisis, and many employers who have not taken
action yet are weighing their options for expense reduction in 2009.
Compensation adjustments lead the way. Nineteen percent of employers
have already reduced merit-based pay increases, and an additional 25
percent have eliminated them altogether. Fifteen percent are still
considering the matter. Bonus programs are being reduced or
eliminated at more than 40 percent of Illinois businesses. Benefits
programs and their accompanying employee contributions are also
being revised. A third of employers have increased employees'
contributions for health-care premiums, and another 20 percent may
follow suit in 2009. On a slightly brighter note, only 4 percent of
employers have reduced or eliminated 401(k) matching contributions,
with 7 percent looking at the possibility for next year.
surprisingly, staffing is also being greatly affected. Almost half
of employers have put a hold on hiring, and 52 percent are hoping to
downsize through attrition. A third of employers report having
already conducted layoffs, and 15 percent more are considering it
for the future. Temporary employees are also being reduced or
eliminated. While most employers have not significantly reduced the
workweek, 12 percent have reduced weekly hours for many employees,
accompanied by a commensurate pay cut, and 5 percent have asked
full-time employees to go part-time. Overtime has been reduced or
eliminated by many organizations as well.
Travel and entertainment policies have not yet been universally
cut or reduced, but many employers are recommending more frugal
approaches, including reductions in first-class airfares,
room-sharing on business trips, and less extravagant client dinners.
Generally, holiday celebrations have been scaled down this year.
More employers than usual are shutting down facilities over the
holidays, and more than a third are asking their employees to use
accrued time off during the shutdown.
Obviously, both employees and employers are suffering due to the
current economy. Many organizations concerned about employee morale
have implemented increased communications and are trying to maintain
as many positive employee benefits and perks as they can. While the
survey results paint a fairly bleak business picture, it is also
clear that the worst might not be behind us.
[to top of second column]
The Economic Conditions Survey includes data from 196 Illinois
employers. Of the responding organizations, 59 percent were
manufacturers, with the remaining percentage representing a wide
cross section of the service sector. Forty-six percent of
respondents employ less than 100 workers, 42 percent have between
100 and 500 employees, and 12 percent have more than 500.
The Management Association of Illinois is a not-for-profit
employers' association serving more than 1,000 companies and
organizations in the Chicagoland area and across Illinois.
In addition to annual wage and salary surveys and various
compliance and best-practices publications in human resources, The
Management Association provides professional services in
compensation administration, affirmative action planning, labor and
employment law, and training for human resources and management
professionals. The association was formed in Chicago in 1898.
[Text from file received from
Management Association of