Even though Canada and much of the rest of the world is in the midst of a recession, the majority of Canadian employers are proceeding with caution, avoiding layoffs where possible, according to a recent survey conducted by Hewitt Associates.

Survey results indicate that, for the most part, employers are considering changes with an eye to the future. Few are cutting back on employee benefit programs: any reductions are focused on discretionary spending, such as business travel.

“Employers recognize that the recession won’t last forever and they don’t want to find themselves short of employees or skills when things improve,” says Tim Clarke, Hewitt Canada’s benefits practice leader.

On the hiring front, 53% of survey respondents are scaling back recruitment efforts and 47% have put a stop to plans for new hires. In comparison, 31% of the 192 companies surveyed indicate some layoffs are expected. Most of these layoffs will occur in the manufacturing sector, or at retail, financial and pharmaceutical companies.

Early retirement programs are not figuring heavily in companies’ plans at this time. Only 15% of those surveyed indicate that they currently offer, or expect to offer, early retirement incentives; 80% do not expect to utilize early retirement programs to manage workforce numbers.

Few organizations are planning to make cuts to employee benefits, according to the survey. Eighty per cent intend to leave their medical, dental and disability benefit plans unreduced. Some employers are even planning to expand their benefit programs.

“In lean operations where every employee counts, companies need staff to contribute by staying healthy and engaged,” says Rochelle Morandini, a senior organizational health consultant with Hewitt.

Most retirees and near-retirees are no more likely to be affected by tighter human resources budgets than others, according to the survey data. Only 5% of respondents plan to cut retiree benefits, and even fewer plan to cut retirement contributions or member services. This is good news for older workers and current retirees whose retirement savings have been hard hit by the meltdown of the markets.

Many employers are looking to reduce their benefits costs where possible, primarily in ways that will have no direct impact on employees and their families. About 25% will be seeking a reduction in benefit insurers’ administration fees, commissions and outside supplier fees. Only about 11% plan to cut internal pension and benefits support staff.

The biggest cuts will occur in business travel: 58% of respondents plan to cut back either substantially or slightly. Holiday celebrations also seem to be on the wane, with 10 % of organizations cutting back significantly this past season and a further 22% cutting back slightly.

IE