Singapore, April 2, 2008: The majority of companies in Asia have not fully felt the impact of the current economic events with only 8% of them not confident of hitting their business targets, compared to 16% globally. However, they are bracing themselves to be affected sometime in the near future, according to a new global study released today, which spanned 1,003 companies in 80 countries. According to Hay Group, the global consulting firm that conducted the study, more than 41% of companies in Asia are freezing or considering freezing base salaries.
“Even more alarming, 33% of Asian organizations (compared to 15% globally) reported that they were freezing salaries for all employees,” said Charlotte Park, Managing Director of Reward Information Services, Asia, Hay Group. “Short of layoffs or salary cuts, this is as serious as you can get in terms of sending out distress signals.”
In addition, the study found that 81% of organizations will be freezing or decreasing staffing levels in the near future. That said, when companies were asked about their primary concerns regarding engaging and retaining key employees during challenging economic periods, they identified retaining and motivating their key contributors as their number one concern – 48% of companies indicated that they have either made changes or are making changes to their retention programs for high-performers.
“An analysis of the forecast for next quarter, coupled with the impact of this report, could be the catalyst for much more serious economic measures,” said Park.
Other notable findings include:
Employer-provided benefits are being put under the microscope, especially when it comes to healthcare – 27% report they have either made changes or are making changes to healthcare benefits.
21% of respondents indicated that they either have changes implemented or planned for retirement/pension benefits
44% of respondents indicated that they have changes implemented or planned for training and development programs
How Asian employers stack up globally
In general, employers in Asia are taking a more cautious approach than their global counterparts in preparing for an anticipated economic slowdown: (Table 1).
Global | ||
Not confident of meeting business targets for 2008 | 8% | 16% |
Considering freezing or are freezing salaries for 2008 | 33% | 15% |
Freezing or decreasing headcount in 2008 | 81% | 20% |
Making or planning changes to healthcare benefits | 27% | 34% |
Making or planning changes for retirement and pension plans | 21% | 18% |
Making or planning changes for training and development programs | 44% | 38% |
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