Jun 09,2009 Employers Make Cuts Eventhough Upturn is Approaching
Employers Make Cuts Eventhough Upturn is Approaching
Due to the recent hard economic times in the United States Economy employers are finding ways to cut back on costs without laying off their labor force. Companies are looking at ways to reduce variable costs since they are locked into fixed costs such as leases.
In an effort to control and manage costs companies are reviewing current benefit programs that their employees are entitled to receive as full time workers. Some fortune 500 companies are looking to introduce taking away the 401k match they offer employees, or have their current employee pick up the full tab for their healthcare benefits. State and government offices are also looking for ways to reduce their spending by introducing furloughs instead of laying off workers. Employees are not standing still even in these tough economic times once notified of their reduced benefits most begin their search for new work elsewhere.
Although companies believe that the economy will begin to have an upturn heading into 2010 most said that the cuts were necessary for their survival, and they believe that more cuts can still happen heading into the 4ths quarter of 2009. These late recession layoffs often cost the company more money due to severance packages, and they need to rehire staff, retraining, and recruitment fees once the economy has recovered.
Companies also putting in place hiring freezes which result in 1) having your current workforce work longer hours to pick up the slack, or 2) reach out for temporary workers to help fill the void. Temporary assignments have been on the rise, and will continue into the early parts of 2010. The workload for companies has not reduced, and they still need able bodies to help complete pending deadlines such as system implementations, SOX compliance, and internal controls documentation.
Furthermore until we see a steady climb in our economy companies will still try to manage their variable costs by hiring temporary help thus saving the company money from paying out full time benefits such as 401k, healthcare, pensions, car allowance, and many other benefits.
