Twenty-nine percent of employers say they have suspended their 401(k) match in response to the recession, according to a poll on Compensation.BLR.com and HR.BLR.com.
Another 9 percent of employers say that they have reduced their match in response to the recession. However, more than half (58 percent) of employers say they have made no changes to their 401(k) match.
The poll included more than 350 respondents.
In light of the recession, employers have been looking at several cost-cutting measures, including layoffs. The consulting firm Hewitt Associates recommends that employers first look at other options before resorting to high-impact cuts like layoffs, because of the long-term effects on organizations. The firm argues that other strategies can produce similar results without affecting employee morale. Hewitt recently created some guidelines for employers considering cost-cutting measures.
- Understand Employee Preferences. Before cutting HR programs or benefits, organizations should understand which are the most meaningful to workers. Companies may find they can cut programs that most employees didn't value in the first place, and save a significant amount of money without hurting morale.
- Take Inventory of Global Programs. It's important for global companies to evaluate whether HR programs and benefits outside their home countries are overly generous relative to the rest of the market. Without taking a global view, employees at company headquarters are likely to shoulder a greater burden of the cost-cutting efforts.
- Make Leaders Visible and Accessible. Senior leadership needs a set of consistent messages and a well thought out communication plan to explain the business realities and rationale for tough decisions--and leaders should communicate regularly in a variety of forums, both formal and informal.
- Encourage Open Communication. Creating an ongoing dialogue with employees at all levels is more important now than ever. Managers should have regular and informal conversations with employees to stay attuned to their concerns and raise red flags to senior leaders. Regular channels--like the corporate Intranet, town hall meetings and company newsletters--are easy ways to keep employees informed, involved and engaged, especially as the company works through tough issues. One of the worst things managers can do is retreat behind closed doors, leading employees to fear the worst.