When the economy took a nosedive in 2007, it took countless comforts down with it - and job perks were certainly not immune. In the past couple of years, quite a few employee benefits have landed on the endangered species list, and some of these benefits are facing all-out extinction. (Find out what benefits you can influence in Employee Benefits: How To Know What To Choose.)
In Pictures: A Bigger Salary Or Better Benefits?
In the shadow of a ghastly recession, many employers were forced to slash job perks, from paid leave and stock options to tuition assistance and 401(k) matching. As a matter of fact, studies show U.S. companies cut an average of up to five major employee benefits in 2009. Although the economy is showing signs of gradual recovery, experts say it could take years for employee benefits to bounce back - and a few of them may be gone for good.
Here are six job perks employees have kissed goodbye in recent years.
#1: Red-Carpet Treatment
When a company is pinching pennies, the most elaborate job perks are usually the first to go. For example, employees of highly profitable companies used to enjoy luxuries like complimentary car washes, limo service to the airport, company-paid client dinners, lavish employee parties and even all-expenses paid vacations for top producers. Since the recession hit, these pricey perks have gone the way of the buffalo.
While these grand employee benefits were the first to die, they'll probably be the last to return - if ever. In these tough economic times, most companies are struggling to keep a full staff of employees on the payroll. There's simply no extra cash floating around for costly red carpet-style perks.
#2: Pension Plans
Employer-sponsored pension plans were dying on the vine before the most recent recession even hit but now they are practically non-existent. As a matter of fact some estimates suggest that only 21% of private sector employees have defined-benefit pensions today. In the past ten years, most employers eliminated pension plans, replacing them with 401(k)s and other retirement contribution plans. (For related reading, check out 5 Tricks For Stretching Your Social Security Benefits.)
#3: 401(k) Matching
In an effort to reduce cash flow during the Great Recession, many employers did away with 401(k) contribution matching. A March 2009 Spectrum Group report found that 34% of U.S. employers had reduced or eliminated their retirement savings plan company match in the previous twelve months. Of course, this job perk cut came at the worst possible time for employees, who were already watching their retirement accounts dwindle due to the plummeting stock market.
Fortunately, experts say that 401(k) matching is not completely dead. Out of the companies that cut their 401(k) match in 2009, 35% say they plan to increase contributions in 2010, based on a Towers Perrin study. While matching may not bounce back to pre-2007 levels, experts believe that most employers will bring it back to some extent. In fact, some companies have already partially restored 401(k) matching benefits.
#4: High Salaries and Bonuses
Many employers have done everything possible to avoid layoffs during these tumultuous economic times. However, they had to trim the fat from somewhere - and many of them chose to snip salaries and scrap bonuses. In a 2009 employment trend survey, more than half of human resource executives said their companies had instituted salary cuts or freezes to cut costs.
Of course, employees are never thrilled to hear the words, "Your salary is being slashed by 5%...and by the way, don't expect that bonus check in the mail this Christmas." Unfortunately, most of today's workers have no choice but to swallow this nasty news with smile. With unemployment levels at record highs, it's not like they can run out and a find a better job elsewhere.
Luckily, some companies are already gradually restoring salaries to previous levels. Although it may take years, experts predict that salaries and bonuses will eventually make a comeback. (If you are looking for work, check out Job Hunting: Higher Pay Vs. Better Benefits for more.)
#5: Tuition Assistance
Education reimbursement is yet another job perk employers are slashing. As a matter of fact, tuition assistance is typically one of the first employee benefits to get crossed off the list when money is tight.
A Graduate Management Admission Council survey shows that only 29% of U.S. employers offered tuition reimbursement or scholarships to recent M.B.A. graduates in 2009 - that's down from 37% in 2008. Tuition assistance may bounce back eventually, but experts believe it will be one of the last benefits to return.
#6: Holiday Parties
You might as well hang up that fancy red Christmas party dress because elaborate holiday parties are also falling by the wayside. According to a Society for Human Resource Management survey, only 81% of employers held a company holiday party in 2009 – that's down from 87% in 2006. To top it off, 15% of employers said they plan to drop the curtain merry festivities in 2010. Bah-humbug, indeed.
Some experts believe that holiday parties may never make Mickey Rourke-style comeback - at least for most companies. So toss out your noisemakers and party hats and get back to work.
There's no question that the Great Recession has left a trail of discarded job perks and floundering employee benefits scattered in its wake. Will these perks ever come back to life? Experts say some of them will certainly return, but others will forever rest in peace.
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