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By Cara Garretson
The economy may be showing signs of recovery, as a number of U.S. companies said in a recent study that their hiring and salary freezes will end within the next twelve months.
According to a study released on Monday by consulting firm Watson Wyatt Worldwide, 62 percent of the companies surveyed said their hiring freezes will be eliminated within the year, and 69 percent said their salary freezes will be lifted in the same time frame. The survey was conducted in early June and includes responses from 179 employers.
One fourth of the survey takers said they believe their companies' financial results have "bottomed out" and will start to rebound. That's twice as many respondents who said their companies have hit bottom as those answering the same question in April.
The percentage of workers already laid off - 5 percent - has remained steady at the typical company since December of 2008, while the number of employees that companies expect to lay off has decreased every month since December, averaging out at 0.5 percent for June, according to the study.
Such a turnaround comes as particularly good news to IT departments, as the ranks of U.S. technology workers has shrunk from a peak of 4 million last November to 3.85 million by the end of April, according to the TechServe Alliance, an industry group that tracks IT unemployment. From a year-over-year perspective, the number of IT workers in the U.S. has declined by 3.5 percent.
"Despite the generally gloomy IT jobs report, survey data and anecdotal reports from our member companies appear to suggest that there is some stabilization in the IT employment picture," said Mark Roberts, CEO of TechServe Alliance, in a written statement. Improvement in employment numbers typically lags behind other economic indicators, Roberts added, so the continued decline in the figures that TechServe tracks was expected.
However the results of the Watson Wyatt survey weren't all good news, as few companies plan to return to the level of hiring and pay that was maintained before the recession. One in five companies said they will keep salary reductions in place even after the economy rebounds, and 46 percent of respondents said they will not lower employee healthcare premiums after having elevating them during the recession.
In addition, 52 percent of respondents said their staff sizes won't return to pre-recession levels for the three-to-five year period following an economic rebound. And two out of five said they will face long-term challenges attracting and retaining so-called "critical-skill employees."
Companies will spend the next year determining which cuts they made in head count and employee benefits during the economic downturn will be reversed, and which will become permanent, according to Watson Wyatt.
"Many companies expect to be operating with a smaller workforce, with more employees working past their ideal retirement age and with less-attractive benefits packages," the study says. "This will no doubt have an effect on attracting and retaining critical talent. While it will take time to see what 'the other side' of this downturn shapes up to be, many expect a new reality in the workplace."
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