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By Mel Duvall

Planning on a big bonus so you can do your part and help spend this economy out of recession? Better come up with a Plan B.

According to a survey conducted by Aon Consulting, more than 70% of high technology and life sciences firms expect to pay lower bonuses this year, or not reward any bonuses at all. Many companies are instead considering selective awards, such as project team bonuses and special incentives to top performers or those employees or groups who are able to rise above the tough climate.

"In times of economic turmoil, a properly designed incentive plan acts as an automatic cost stabilizer, paying out when a company performance meets expectations and not paying out when performance and financial ability is lacking," says David Knopping, vice president with Aon's Radford survey division.

"However, this is a difficult message to deliver to employees who are used to earning a bonus as part of their compensation package."

The company surveyed a total of 169 U.S. technology and life sciences companies and found some surprising differences between the two sectors.

Only 14% of high tech companies indicated they would provide salary increases to eligible employees in 2009, compared to 50% among life sciences companies. Knopping says this may be because life sciences companies are involved in clinical trials and other product introductions that require long-term commitments. Losing talent in the middle of a trial can have serious consequences.

To further control costs, many high tech companies are continuing to offer voluntary and mandatory furloughs to employees in an effort to avoid layoffs. On average, nearly 85% of the high tech, non-executive workforce has been impacted by mandatory layoffs in the first six months of 2009, compared to 41% for life sciences employees.

"Many companies have had no choice but to have layoffs, while others tried to lessen the blow by implementing a wide variety of forced time-off programs," adds Radford senior vice president John Radford.

The future employment outlook is not good – but better than in previous surveys. About 36% of high tech companies are expecting layoffs in the next six months, down 9% from the last survey at the end of 2008. Only 17% of life sciences companies are expecting more layoffs, down more than 20% from the end of 2008.

Aon is one of the world's largest human capital consulting firms, with $1.4 billion in revenues, and 117 offices.

Comments (3)

	1. 06-12-2009 12:07
	Not a great subject to contemplate before a weekend, but I doubt it is surprising to many. As the article alludes to, this year's bonus is having gainful employment at a viable company. It would be wise for companies to consider stock/option grants as incentives tied to long term performance, although they too have accounting and financial implications. Registered

Frederick B. Kauber

	2. 06-12-2009 12:38
	I'm not sure if the planned payraises at life sciences companies are solely due to ongoing clinical trials. It may also have something to do with the sizeable profits being generated in the medical sector. Good times or bad, seems like most businesses involved in health care tend to make out just fine. Wonder why that is? Registered

John Goff

	3. 06-12-2009 13:35
	One of the things that struck me from the survey was the high percentage of companies that instituted some form of voluntary or mandatory layoffs - 85% in the high tech sector. It seemed like the tech sector was faring fairly well compared to other sectors like manufacturing, but obviously the impacts of this recession are deep and wide. Registered

Mel Duvall

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