CREDIT CRUNCH
One in five firms unprepared for economic downturn
One in five UK companies had made no contingency plans ahead of the current financial crisis for managing their workforce during an economic downturn, according to a survey by Watson Wyatt.
The survey found that 79% of UK companies had contingency plans in place by the summer of 2008. This compares with 80% on average across Europe. UK and continental European companies appear to have been more prepared than those in the United States, where only 67% had made contingency plans.
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Carole Hathaway, head of European strategic reward at Watson Wyatt, said: “HR leaders need to conduct strategic workforce planning so that if and when they need to make difficult decisions they can be confident that they keep the right people to maintain performance of the organisation in the short term, and ensure they have the right skills to come out of the downturn in a stronger position.”
She added: "They also need to ensure they have the necessary systems and processes in place for effective reward management to ensure they can manage costs, but they are also still flexible enough to incentivise performance and maintain an engaged workforce."
Key survey results
The Watson Wyatt survey found organisational restructuring to be the most popular consideration for contingency planning in the UK. Of those that had made contingency plans for an economic downturn, 92% in the UK had made organisational restructuring part of their plans.
A freeze on hiring was the second most likely at 58%, then layoffs with 55% and slowing the rate of salary increase with 50%.
Want to know more?
Title: Global Strategic Reward 2008, Watson Wyatt.
Survey sample: The survey covered a total of 1,389 organisations across 37 countries.
Availability: For more information, or to purchase the report, contact Watson Wyatt’s customer services, email: customerservice@watsonwyatt.com.
Watson Wyatt is the “trusted business partner to the world's leading organisations on people and financial issues”. The firm’s global services include: managing the cost and effectiveness of employee benefit programmes; developing attraction, retention and reward strategies; and delivering related technology, outsourcing and data services. Watson Wyatt has 7,200 associates in 32 countries and is located on the web at www.watsonwyatt.com.