As employers regain confidence, they plan to lift freezes on salaries, benefits and 401(k) matches, according to a series of reports.
Most notably, a full 64% of employers plan to restore 401(k) matches over the next 18 months, according to a survey of human resources executives at 175 companies by Watson Wyatt. Five percent plan to restore the matches in the next six months, 43% in the next 12 months and 16% in the next 18 months.
Sixty-seven percent of employers who plan to restore matches will bring them back to the level they were before the financial crisis, but 21% will make them variable, tied to corporate profits.
Also, 79% plan to unfreeze salaries in the next year, with 33% planning to do so within the next six months. By comparison, in June, only 17% planned to unfreeze salaries within six months.
Roughly 60% of respondents had frozen salaries. Of them, more than 70% said they plan to resume hiring in the next year. Of the total respondents, they plan to lay off less than 2% of their staff in the next year.
“This is further evidence that companies think the worst is behind them. They’re starting to look forward again,” said Laura Sejen, global practice director of strategic awards at Watson Wyatt. However, if they have not communicated their improved outlook to employees, they could possibly renege on the plan, she added.
On the other hand, two-thirds of employers who have shifted a larger burden of healthcare costs to their employees are not likely to reverse that course, Watson Wyatt found. Forty-one percent have increased deductibles, co-pays or out-of-pocket maximums, and 40% have increased employees’ premiums.