A new survey by HR consultancy Mercer, Leading Through Unprecedented Times, reveals  that a significant majority of multinational companies are trying to be selective in planning 2009 workforce, compensation and benefit cuts, even as they anticipate a decline in their company’s business performance next year.

Eighty-one percent of those surveyed – 1,028 human resource and finance professionals representing organisations with operations in more than 100 countries – expect a decline in their own company’s business performance in 2009, and 35 percent are likely to make significant workforce reductions.

No drastic action yet
Only a deep or prolonged economic downturn could force more drastic action, however companies are expressing caution.

“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 of Mercer.

 “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 programmes.”

“It is also likely that companies learned important lessons in previous economic downturns about the importance of talent in creating competitive advantage, and so are reluctant to take actions that could hamper their recovery once the economy improves.”
 
2009: A tough year ahead
Globally, 81 percent of respondents in the Mercer survey expect their company’s business performance to decline in 2009.

The most pessimistic feedback came from companies with operations in Japan and Hong Kong – 90 percent expect such a decline. The most optimistic respondents have operations in Canada, with 72 percent expecting their company’s performance to decline in 2009, and the United States with 82 percent expecting such a decline.

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