- The Washington Times - Tuesday, April 21, 2009

NEW YORK (AP) - Salary freezes, bonus reductions and unpaid furloughs have surged in recent months as companies try to survive without layoffs, and a new survey found many businesses intend to keep the cost-cutting measures after the recession eases.

Nearly 60 percent of the companies say they are freezing salaries, while another 41 percent have or will tighten bonus criteria for executives. Meanwhile, 45 percent are slashing training programs, according to a survey by human resources consultancy Towers Perrin.

But don’t expect higher wages once the economy starts to recover _ 39 percent of respondents said they’ll maintain at least some of the cost cuts, and another 39 percent plan to keep those efforts in place to a limited extent.

Towers Perrin polled personnel executives at nearly 700 big U.S. companies and found that only 25 percent of respondents weren’t at least considering freezing salaries.

Salary reductions were a bit more rare, with 16 percent committed to doing so, while 20 percent said they were considering it.

Bonuses for executives have become a hot-button issue for companies that have received government bailout money. The survey found 59 percent of companies they were tightening criteria for bonuses for executives, such as instituting tougher targets, or considering such an approach.

Meanwhile, mandatory furloughs have more than tripled. While 5 percent of respondents said they were making employees take unpaid time off in December, 17 percent of companies were mandating furloughs or planned to last month. Another 23 percent are considering it.

Newspaper publisher Gannett Inc., railroad operator CSX Corp. and others have instituted furloughs this year. Gannett forced most of its American employees to take a week of unpaid leave, and said last week it may mandate the action again in the second half of the year.

Towers Perrin randomly surveyed 680 HR executives from its client base of 6,466 companies in March via e-mail. The companies surveyed had average annual revenue of $4.9 billion.

The margin of error for the survey was plus or minus 3.75 percentage points.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide