Cost-cutting measures like layoffs, and hiring and salary freezes at U.S. employers might have finally peaked, according to a survey from consulting firm Watson Wyatt. The news may come as a relief to baby boomers, who statistics find are the longest to be unemployed once they lose their job.
The firm’s recent survey found most companies are planning no further hiring freezes (67 percent), organizational restructuring changes (65 percent) or layoffs (53 percent).
Although the majority are not planning any further salary reductions (89 percent) or salary freezes (76 percent) in the next 12 months, the number that have already made these changes has risen sharply since February. Mandatory shutdowns (24 percent), a reduced workweek (22 percent) and mandatory furloughs (17 percent) have also risen sharply since February.
The survey also found that only one in four employers (26 percent) plans to increase cost-cutting initiatives over the next 12 months, a sharp decline from the 51 percent planning more cost-cutting measures in February. Watson Wyatt’s latest survey includes responses from 141 employers and was conducted in April 2009.
“Companies have started to move into the next stage of their cost-cutting actions, but are also looking ahead to an eventual recovery,” said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. “There is a recognition that employers will need to be poised for a turnaround, and that continuing some cost-cutting measures such as reductions in force can put them at a disadvantage once the economy improves.”
According to the Bureau of Labor Statistics, laid-off workers age 45 and older were out of work 22.2 weeks in 2008 compared with 16.2 weeks for younger workers.
Alicia H. Munnell, director of the Center for Retirement Research at Boston College told the New York Times last week once older workers lose their jobs, “then it’s horrible.”
“They (older workers) have a much harder time finding work again than younger job-seekers do, and statistics appear to show that it is harder for them in this recession than in previous ones. During downturns in 1982 and 2001, workers ages 45 and over were unemployed an average of 19 weeks and just under 17 weeks, respectively,” the Times reported (Parenthesis inserted).