The survey, carried out by Aon Consulting’s San Jose-based Radford Surveys, found that second quarter 2004 layoffs are at a two-year low, with less than 20% of companies reporting letting people go, Aon said in a news release.
In fact, the July 2004 edition of Aon’s Radford Benchmark, Executive and Overall Practices Surveys, shows that nearly one-third of responding companies are back to what the hiring managers label as “normal hiring levels.” The survey found that the number of employees voluntarily heading for the exits stood at 8.9%. This marks the third straight year that voluntary turnover has dropped and the lowest in the history of the surveys back to the mid-1980s.
Aon cautioned that companies will need to pay close attention to recruitment and retention issues. Radford suggests that, “With the decline of layoffs, voluntary turnover at record lows, and thawing of salary freezes, many companies are now looking to new realities of retaining key performers, who may be in jeopardy as hiring resumes.”
Also of note, the surveys indicates that technology remains a “stock option culture” despite pressure from institutional investors and the Financial Accounting Standards Board (FASB) to expense stock options. Although some companies are thinking about or turning to restricted stock, stock options are still the primary equity compensation tool for technology firms, the study found.
“Nearly three-quarters of surveyed companies are still using stock options and we expect that the technology industry will continue to utilize options as a key component of the compensation package,” said John Radford, senior vice president for Radford Surveys. “In doing so, however, companies must ensure that the amount of options granted across the board is appropriate compared to peer group companies to remain competitive and respond to investor pressure.”
More than 950 companies contributed data this year to the Radford Surveys domestic database of one million-plus current technology employees, the announcement said.