Companies get creative in cost-cutting measures, attempt to avoid permanent layoffs, according to a new Challenger, Gray & Christmas survey.
(View a slideshow on notable layoffs in 2008.).
Global outplacement consulting firm Challenger, Gray & Christmas released results Monday from a survey of 100 human resource executives that showed 92% are initiating some type of cost-cutting actions. Among those, more than 55.6% of the companies said they were reducing headcount to lower expenses. Yet nearly half (44.4%) are resorting to other measures to decrease costs, and only 2% of those surveyed said they used permanent layoffs as their sole cost-cutting initiative. According to the findings, 82% of companies employed at least two cost-cutting methods to make their numbers.
"Many companies cannot cut their payrolls as deeply as they have in previous downturns, simply because they did not do as much hiring during the most recent expansion. As a result, they are forced to find alternative ways to keep their costs down," said John Challenger, CEO at the firm, in a statement.
For instance, more than 66.7% said they cut travel expenses, more than 57.8% plan to freeze hiring and 32% cancelled the employee holiday party. Others froze salaries (27.2%) and reduced year-end bonuses (26.7%) or eliminated them altogether (22.2%), while some cut workers' hours (24.4%) and conducted temporary layoffs (15.6%).
Fewer companies (10.8%) reported cutting back tuition reimbursement programs, and 11% reduced or eliminated matching contributions to employees' 401(k) plans. More than 6% cut office space expenses through increased telecommuting.
"Companies that have thus far avoided job cuts may not be able to do so for the entire length of this recession, but by reducing costs in all these other areas, they may be able to limit the size of the cuts," Challenger said.