Strategy

Job Picture Looks Lackluster

Workers are increasingly concerned about personal finances, company hiring intentions, and job loss.
Stephen TaubJune 2, 2005

Companies have budgeted for salary increases averaging only 3.5 percent this year, and are expected to remain at that level next year, according to the Conference Board.

“The recovery from the economic downturn appears to be leveling off, and U.S. companies are paying close attention to cost control,” pointed out Charles Peck, compensation specialist for the board, in a statement. “This continued caution is reflected in the pattern of salary-increase budgets this year, compared with last year’s projections.”

Small wonder, then, that the average employee is growing more pessimistic. According to staffing company Hudson, its monthly gauge of U.S. workforce sentiment declined 2.5 points in May, from 102.4 to 99.9.

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Hudson added that this is the first time its index has fallen below its December 2003 base of 100.

The company cited increased concerns about personal finances, hiring intentions, and job loss. “More workers are pessimistic than optimistic about their finances for the first time in over a year,” Hudson noted in its report.

Workers are also concerned about their employers’ hiring plans. In the latest survey, 19 percent of workers expect their organizations to lay off staff in the coming months, up from 17 percent in March and April. And the percentage of workers nervous about losing their own jobs rose to its highest level in more than a year, at 22 percent.

Managers are more optimistic, however: 35 percent anticipate that their companies will hire in the coming months, compared with 33 percent in April, while 18 percent expecting layoffs, compared with 17 percent a month earlier.