U.S. Reductions Forecast May Signal Need for Europe to Prepare

May 6, 2009 (PLANSPONSOR.com) - Research conducted for PricewaterhouseCoopers (PwC) shows that, while headcount and HR budget projections vary significantly across Europe, all organizations surveyed forecast reductions to an extent.

PwC said in a press release that more negative news from related research conducted in the U.S. suggests European organizations may need to steel themselves for further challenges, since as the financial crisis moved eastward so too may the repercussions. In the U.S. research conducted at the beginning of 2009, 42% of the 300 respondents expect to decrease headcount this year, 40% expect to reduce training and development spend, and almost half (47%) plan to cut overall HR budgets.

Of the 700 companies from across 13 countries represented in the European research conducted at the end of last year, more than a quarter (28%) expect their company to decrease headcount this year.

According to the press release, while organizations in some countries are holding on against short-term pressures to cut budgets and shed staff, others are clearly struggling. In Russia, for example, almost half (46%) of the Russian respondents predict headcount cuts will occur in their organization this year. Sweden and Ireland are also showing particular strain with 52% and 40% of respondents anticipating reductions, respectively.

The PwC study revealed good news for workers in Switzerland, Turkey, Belgium, Poland, Germany and the Czech Republic, where a higher percentage of companies plan to increase headcount than expect to reduce it.