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DEEP workforce and benefit cuts show signs of moderating in the second half of this year, especially in Asia, according to the latest Mercer global survey.
Among 2,100 organisations from 90 countries surveyed, 58 per cent plan job cuts in the remainder of 2009. But this is 8 percentage points lower than the 66 per cent that implemented workforce cuts in the first half of the year.
Encouragingly, only 5 per cent of companies surveyed plan to make deep cuts - staff reductions of 10 per cent or more - compared with the 13 per cent that made such cuts in the first half of 2009.
Asian companies are leading the reversal. Only 45 per cent of companies in the region plan to make workforce cuts, down 14 percentage points from those that have already done so this year. And just 4 per cent anticipate deep cuts, compared with 14 per cent that implemented them in the first half of 2009.
Companies also seem to be hiring, despite the ongoing recession. More than a third of organisations surveyed said they would continue to hire key talent even as they cut their workforce overall. About another third plan to hire replacement talent only.
'Companies should take active steps to manage and retain key talent to be ready for growth opportunities once market turbulence subsides,' said Guo Xin, Mercer's deputy regional head for the Asia-Pacific and regional leader of the firm's human capital business.
Most companies also have no plans to make significant cuts in employee benefits - one of the many ways to reduce costs. 73 per cent of those surveyed do not plan to reduce company contributions to retirement benefits in the next six months, and only 14 per cent have actually done so.
An overwhelming 94 per cent of companies have not eliminated any health and group benefit programmes this year.
The data on employee compensation is more ambiguous. Organisations are almost equally divided on whether their 2009 base pay budgets will be more (31 per cent), equal to (33 per cent), or less than 2008 budgets (36 per cent).
Rather than resorting to pay cuts, companies seem more willing to freeze pay to manage costs. In the past six months, 51 per cent of those surveyed froze salaries at 2008 levels for at least some of their employees, and 32 per cent implemented enterprise-wide pay freezes.
Again, Asian companies deserve mention, with 35 per cent freezing salaries enterprise-wide so far, and 33 per cent planning to do so in the remainder of 2009.
Mercer's Mr Guo said of the companies surveyed: 'Cost-cutting is not their only focus. Managing workforce levels and keeping employees engaged, motivated and productive are also a priority.'
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