By CARI TUNA
The Wall Street Journal

Many companies that have cut jobs, pay and benefits during the recession may not be quick to restore them.

According to a new survey, 52% of companies expect to employ fewer people in three to five years than they did before the recession began. The survey of 179 companies was conducted this month by consulting firm Watson Wyatt Worldwide Inc.

Among employers who have cut salaries, 55% expect to restore the cuts in the next year. But 20% expect the cuts to be permanent. Of employers who have increased employee contributions to health-care premiums, 46% don't plan to reverse the increases. Of all survey respondents, 73% said they expect employees to shoulder more of the cost of health care than before the recession began.

Nearly half of the employers who have cut their contributions to retirement plans expect to reinstate them in the next year. The remainder plan to restore the contributions after that, expect the cut to be permanent, or aren't sure.

"We're not going to go back to the status quo," says Laurie Bienstock, national director of Watson Wyatt's strategic-rewards practice.

The survey offered a few hints of good news. About a quarter of respondents said they believe their companies' results had already "bottomed out," compared with 13% in a similar survey in April. Most companies that have frozen salaries or hiring said they plan to lift those freezes over the next 12 months.

Roughly one-third said they are still planning layoffs, but that was down from 46% in April. The survey comes amid other signs that the rate at which employers are cutting jobs may be slowing. The U.S. shed 345,000 nonfarm jobs in May, about half the average monthly decline for the prior six months, according to the Bureau of Labor Statistics.

A May survey of 2,100 employers world-wide by consulting firm Mercer found that 58% plan to cut jobs in the remainder of 2009, compared with 66% who laid off workers in the prior six months. Mercer says 5% plan to cut more than one-tenth of their employees in 2009, down from 13% who cut that deep in the six months before the survey.

Write to Cari Tuna at cari.tuna@wsj.com

Printed in The Wall Street Journal, page B2

http://online.wsj.com/article/SB124562632082835633.html