A majority of multinational companies are being selective in planning 2009 workforce, compensation, and benefit cuts, even as they anticipate a decline in their company’s business performance through the next year, according to a recent Mercer survey, “Leading Through Unprecedented Times.”
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Eighty-one percent of survey respondents expect a decline in their own company’s business performance in 2009, and 35 percent are likely to make significant workforce reductions
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Most respondents are likely to curtail overall hiring, reduce 2009 salary increases and cut bonus payouts, while continuing to hire talent to fill shortages in key skill sets
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Worry about retirement investments tops the list of employee concerns, respondents report, outweighing employee anxiety about job security
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A deep or prolonged economic downturn could force more drastic action
“Many multinational companies have been facing rising cost pressure throughout 2008 and in recent months have been managing compensation costs and workforce levels aggressively while working to keep employees engaged and productive,” says Patricia A. Milligan, Mercer’s chief markets officer. “But our survey shows that—at least as a group—most of these companies have refrained from taking severe and broad-based steps. Such drastic actions may include very deep workforce cuts, across-the board salary freezes, reductions in defined contribution plan contributions, or elimination of certain health benefit programs.”
Retirement investment concerns are the most worrisome for organizations. Fifty-four percent of HR professional respondents said that employees expressed a significant level of concern about the impact of economic turmoil on their retirement investments, compared to 37 percent who said that employees were concerned with the overall health of the company and 34 percent who were concerned with job security. Companies plan on focusing on communicating with employees to quell such anxieties as the economy continues to be tumultuous.