A Hay Group news release said 31% anticipated the dramatic business dropoff in the latest research, up sharply from the 12% who gave that indication in March 2008.
However, 62% of organizations indicate that business results are staying about the same and are expected to be close to 2008 targets, the news release said.
The study found that retail is one of the hardest hit sectors, with 63% of retail respondents expecting poor business results due to reduced consumer spending and a tightened credit market. Other industries, such as oil and gas, have been able to weather the downturn more successfully; some 19% of oil and gas respondents expect business results to be significantly better than targeted levels, Hay Group said.
Generally, according to Hay Group, companies’ top concerns include:
- retaining top talent and critical skills,
- maintaining and affording competitive pay,
- maintaining employee engagement and motivation,
- career development and training opportunities, and
- recruiting top talent and employees with critical skills.
“While not all regions, countries and industries are impacted equally, many organizations are feeling at least some effects of the downturn,” said Nick Boulter, Hay Group global managing director, client development and reward services, in the news release. “With next year’s economic outlook uncertain, organizations are wary about increasing the fixed cost of base salaries. Many are opting to err on the side of caution by deferring or reducing salary increases or freezing salaries, and are reviewing their reward programs to focus on retaining high performers.”
Nearly half (48%) of organizations globally are decreasing or freezing existing staffing levels, up from 20% in March. For those planning layoffs, median staffing level decreases are approximately 7.5%. Only 3% of organizations globally are planning to bring on staff, Hay Group said.
The news release said the study also found that:
- Most employers are keeping benefits programs relatively intact including health and retirement plans.
- One of the biggest areas for cuts is base salary increases with 65% of respondents making changes or considering changes to their previously established base salary increase budgets for 2009 (See Salary Increase Plans not Deterred by Economic Uncertainty ). Of those organizations, 58% are decreasing their budgets and 24% are freezing or considering freezing salaries for all employees.
- Training and development programs are being decreased or eliminated by 16% of organizations responding to the survey (See Finance Training not on Front Burner for Many Co's. ).
- Companies are also cutting overtime wages (11%) and the use of contract laborers (17%).
More information on the latest study is available here .