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Northern Trust Corporation is eliminating approximately 450 positions in an effort to decrease costs.

Beginning Jan. 1, 2009, staff cuts, along with other actions, are expected to generate approximately US$50 million to US$60 million in annualized pre-tax savings.

“The macroeconomic environment has been extraordinarily difficult and has impacted all segments of the global economy,” says Frederick Waddell, chief executive officer of Northern Trust. “Our decisions, while difficult, will further enhance Northern Trust’s position amid challenging conditions while maintaining our focus on clients and those activities in which we have significant competitive advantage and continue to see opportunities for growth.”

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Staffing Cuts Increase 20% Globally

Forty-eight percent of organizations globally are decreasing or freezing existing staffing levels, along with base salary increases and HR programs, according to a survey.

The Hay Group’s Global Employee Pay and Staffing Survey of 2,589 organizations from 91 countries found that staffing level cuts and freezes have more than doubled since the last poll was conducted in March 2008, with median staffing level decreases of 7.5%. Only 3% of organizations globally are planning to increase staffing levels.

Base salary increases are also being cut, with 65% of respondents saying they are making or considering changes to their previously established base salary increase budgets for 2009. Of those organizations, 58% are decreasing their budgets and 24% are freezing or considering freezing salaries for all employees.

Sixteen percent of respondents are decreasing or eliminating HR programs, including training and development programs, while 11% are cutting overtime wages and 17% are cutting the use of contract labourers. However, most are keeping benefits programs relatively intact at this time, including health and retirement plans.

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Employers Challenged by Leave of Absence Program Administration

Leave of absence (LOA) programs are becoming increasingly troublesome for U.S. employers, causing them to make changes in their administrative approach, according to a survey.

Hewitt Associates’ survey of 225 large and mid-size U.S. companies found that tracking employees’ collective absences, the reasons for those absences, and the total costs associated with lost productivity and health and disability benefits is cumbersome and inefficient, resulting in a trend toward shifting the administration to internal groups or to an outsourcing partner.

Companies are also adopting total absence management programs, which bring together traditionally separate absence-related policies and benefits programs that enable employers to gain a more comprehensive view of the driving factors behind employee absenteeism, according to the survey.

Seventy-five percent of respondents said they do not feel they are administering LOAs well, while 26% said their LOA policy is followed all of the time. Forty-two percent of employers have completely centralized their LOA administration, and 30% have outsourced their LOA program management, an increase of 13 percentage points in the last five years.

In addition, about 30% of employers now offer a total absence management program. Among those companies that outsourced their LOA administration, 93% said their administration was more consistent, while 76% reported that the distribution of required notifications was more timely.

“Due to the increasing complexity of the absence management space, it has become difficult for companies to manage and track employee absences from several disparate HR departments,” says Kim Stattner, a leader in Hewitt’s absence management practice.

“What’s more, many companies don’t have the time or resources required to effectively manage employee LOAs. As a result, we’re seeing an increase in outsourcing and/or the use of dedicated groups within an organization to manage these programs, in addition to more total absence management programs.”

Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com