A new Deloitte study concludes that top executives and human resource managers in a variety of industries believe they will need to make even more drastic headcount cuts as they try to cope with a prolonged recession.
The study, "Managing Talent in a Turbulent Economy: Navigating a Course Through Rough Waters," was conducted in conjunction with Forbes Insight, and is the second edition in a three-part longitudinal survey designed to examine how executives are responding to the perilous and often unpredictable currents of today's economy. This report features data from March 2009.
The No. 1 finding, according to Deloitte, was that nearly half (47 percent) of the 397 international executives polled reported layoffs over the last three months, compared with 38 percent who said the same in Deloitte's January study. Furthermore, these companies also expect more layoffs in the coming quarter (71 percent).
The findings also indicate that these job cuts are becoming more and more difficult to make. As workforce reductions deepen, 43 percent of employers are looking at factors like "role necessity" when making these decisions (a 17 percentage point drop from January). And job performance is no guarantee of job security either. Forty-five percent of the managers surveyed reported this as a top factor in decided which employees to keep.
Even for survivors of layoffs, thing look grim. Respondents said that over the next 12 months, their companies are more likely to decrease compensation levels (25 percent), benefit levels and packages (32 percent to 14 percent) and discretionary perks such as subsidized food and parking (39 percent to 12 percent). Corporate bonuses are also being pared back, with more than a third (35 percent) reporting they expect bonuses to decrease this year.
Risk is also becoming a more critical issue for corporations worldwide. According to the survey, those respondents in the CFO/treasurer/comptroller roles disagreed by a 2:1 margin with their fellow respondents that employees in their firms knew how to identify fraud and other behaviors that could endanger their companies.
"It is a true sign of the times as austerity measures now outrank efforts to increase sales and serve customers as top priorities for these executives," said Jeff Schwartz, principal, human capital, Deloitte Consulting, in a statement. "Even these companies' most skilled employees have begun to feel the pain of the weakened economy, and their managers are struggling with how best to align their workforces with the reality of what many expect to be a prolonged downturn."
Researchers surveyed 397 senior business leaders and HR executives at large businesses in the Americas, Asia Pacific and the Europe/Middle East/Africa regions.
Each pulse survey focuses on a specific area of interest to talent managers, with the first pulse survey spotlighting the use of workforce planning and analytics, and the second spotlighting risk management and regulatory compliance.