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Study Suggests Businesses Ready to Reverse Pay Actions

Executive confidence may be returning, according to consultancy Watson Wyatt Worldwide, because a growing number of employers are considering reversing pay freezes and cuts, among other things.

A recent study of 175 U.S.-based companies suggests that a growing number of them are planning to reverse HR cut-backs over the next six months, including the following actions taken during the worst of the downturn:

  • salary reductions (44 percent)
  • salary freezes (33 percent)
  • cuts to 401(k) matching contributions (24 percent)
A little over half -- 52 percent of employers -- are more concerned about retaining top talent now than when the heaviest part of the downturn hit. The one third planning to end salary freezes is double the number of July.

Apparently the economic toll has been coming out among employees in quieter ways. For example, a third of respondents said that they've seen an increase in hardship withdrawals from 401(k) and 403(b) plans. Otherwise, executive outlooks seemed to stay fairly stable, as the graph below suggests.

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