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Companies are squeezing wherever they can. Compuware, a computer-services company in Detroit, eliminated its customary holiday gift of a jar of cashews to each of its 9,300 workers; that will save $500,000. The firm, which has cut wages and plans to start taking payroll deductions of $25 to $50 a month for health care, has been chipping away at other benefits too. Compuware is terminating tuition reimbursements (to save $1.4 million), and it intends to charge more for child-care services at its headquarters. "Our revenues have not been growing, so we need to reduce our expenses," says Thomas Costello, senior vice president for human resources. He says the measures have enabled Compuware to avoid large-scale layoffs, which some of its competitors such as EDS have imposed.
--THE BENEFITS GET ODDER Fearing that excessive cuts could drain employee morale--and lead to an exodus when the economy picks up--some companies are looking for ways to send workers the message that they care. The burrito slingers at Chipotle Mexican Grill, for instance, have paid 10% to 15% more annually for their health coverage since 2000. But the Denver-based chain of 280 restaurants, which is 90% owned by McDonald's, isn't tightening the belt everywhere. In July 2002 it introduced a new benefit: pet health insurance. Chipotle says it covers the first $10 a month, enough to pay the premium for a pup's first year of care. Employees also receive a 15% discount on veterinary services. "It fits our philosophy of caring for the employee's whole family," says Bob Wilner, chief administrative officer. Only Chipotle's 800 salaried employees (the remaining 5,300 are paid hourly) are eligible, but those who choose it are appreciative. "For a few bucks a month, it's a great benefit," says Dan Fogarty, 42, director of brand development and owner of a mutt named Pete.
Yet these small gestures have not eased the sense that the corporate safety net will continue to fray. Even as the economy reflates, many unemployed workers may find themselves in temp jobs with no benefits, or they may end up working for small businesses whose benefits are less generous than those at bigger corporations. Small businesses, says Swonk, are the "shock absorbers" of the new economy. The good news is that the U.S. economy has the flexibility to absorb these shocks. The bad news is that the workers usually do much of the absorbing.
--With reporting by Margot Roosevelt/Los Angeles, Eric Roston/Washington, Eli Sanders/Seattle, Joseph R. Szczesny/Detroit and Leslie Whitaker/Chicago