WASHINGTON, Aug. 13 /PRNewswire-FirstCall/ -- The number of employers planning to reverse salary cuts and freezes and restore matching contributions to 401(k) plans has increased in the past two months, according to the latest update to an ongoing series of surveys by Watson Wyatt, a leading global consulting firm. Nevertheless, the survey also found that many employers remain concerned about retaining their top performers. The survey found that 33 percent of employers that froze salaries plan to unfreeze them within the next six months, up from 17 percent two months ago. Forty-four percent plan to roll back salary cuts in the next six months, compared with 30 percent two months ago. Additionally, 24 percent of employers plan to reverse reductions to 401(k) match contributions in the next six months, versus 5 percent in June. Watson Wyatt's latest bimonthly survey was conducted in August 2009 and includes responses from 175 large employers. "Some employers are seeing the light at the end of tunnel and feeling optimistic about the prospect of improved business results," said Laura Sejen, global director of strategic rewards consulting at Watson Wyatt. "However, even as some of the program cuts are rolled back, many employees are facing smaller raises, lower bonuses and higher health care costs." The survey found that 66 percent of respondents that increased the percentage that employees pay for health care premiums do not expect to reverse that decision. Also, 40 percent of respondents are planning to shift more health care benefit costs to workers by increasing the percentage of premiums they pay. Another 41 percent of companies expect to increase the deductibles, copays or out-of-pocket maximums for their 2010 health care plans. In addition, a majority of employers (52 percent) are now more concerned about retaining their top performers and critical-skill employees than they were before the economic crisis hit. In an effort to keep employees engaged, 83 percent of employers have increased communication and 40 percent have held additional employee forums such as town halls or other interactive sessions to address economy-related concerns. While almost half (47 percent) have changed employee roles to expand responsibilities, a far smaller number is expanding the use of recognition programs (27 percent) or creating special compensation programs for high-performing or at-risk employees (18 percent). "Even as employers look ahead to an eventual economic recovery, they still face many challenges, such as the potential disengagement of top performers," said Brian Wilkerson, global director of talent management at Watson Wyatt. "Employers can manage this to some extent not only by effectively communicating with employees, but also by ensuring that they are rewarded for the job that they do -- in particular taking into account how that job might be changing in the current environment." Other findings: -- The survey found that almost three in 10 (27 percent) think their company's business results have already bottomed out, and a further 15 percent think they are currently at bottom. -- Looking ahead three to five years, 83 percent expect to see an increase in the number of employees working longer, past their desired retirement ages, and 43 percent of employers expect to see a reduction in staff sizes. Half also expect to see an increase in the difficulty of retaining critical-skill employees, and 46 percent in attracting them. -- More than a third of employers have noticed an increase in the number of employees taking hardship withdrawals (36 percent) and loans (37 percent) from their 401(k) and 403(b) plans in the last two months. For more information, please visit http://www.watsonwyatt.com/hrprogramsAug09. About Watson Wyatt Worldwide Watson Wyatt (NYSE:WWNASDAQ:WW) is the trusted business partner to the world's leading organizations on people and financial issues. The firm's global services include: managing the cost and effectiveness of employee benefit programs; developing attraction, retention and reward strategies; advising pension plan sponsors and other institutions on optimal investment strategies; providing strategic and financial advice to insurance and financial services companies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,700 associates in 33 countries and is located on the Web at http://www.watsonwyatt.com/. DATASOURCE: Watson Wyatt CONTACT: Ed Emerman, +1-609-275-5162, , for Watson Wyatt; or Steve Arnoff of Watson Wyatt, +1-703-258-7634, Web Site: http://www.watsonwyatt.com/

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