As Canadian companies prepare for the economic recovery, many expect to reverse hiring and salary freezes in the coming months, according to Watson Wyatt, a leading global consulting firm. While companies cautiously anticipate improving business results, many firms remain concerned about the impact of the recession on their ability to attract and retain workers.
Among Canadian companies that instituted hiring freezes, 35 per cent expect to reverse them in the next 12 months, while nearly half (49 per cent) are not certain when they will reverse their freezes. Among companies that implemented salary freezes, more than half (53 per cent) expect to reverse them in the next 12 months; however, 21 per cent are not certain when they will reverse their freezes. The Watson Wyatt survey, the latest update to an ongoing series, was conducted in September 2009 and includes responses from 72 Canadian employers.
“As companies step gingerly toward recovery, they will continue to reverse many of the changes made earlier and reinstate some of the cuts to compensation and benefit programs,” says Liz Wright, compensation practice leader at Watson Wyatt. “But, there is little doubt this recession will have a long-lasting impact on the workforce. With so many changes hitting workers directly, many companies are ramping up communication efforts and increasing training and development opportunities to re-engage employees.”
There are signs pointing to recovery. More than one-third (39 per cent) of respondents indicated their company’s results have “bottomed out” and have started to improve. But, even with the economy showing improvement, employers expect many of their ongoing challenges, such as attracting and retaining top employees, to be significantly compounded by the recession. In fact, nearly half expect long-term challenges retaining (45 per cent) and attracting (42 per cent) critical-skill workers in the next 3-5 years.
To address the changes made to HR programs and to help keep workers productive on the job, more than half (57 per cent) of companies expect to increase their communication. In fact, 22 per cent of companies plan to hold additional employee forums, town halls or other interactive sessions to address their workers’ concerns about business and economic issues. Interestingly, 26 per cent of companies plan to provide additional development opportunities for workers, and 21 per cent plan to increase their focus on coaching or mentoring.
“Workers lucky enough to keep their jobs in recent months are likely delaying their job search until the economy is on firmer footing,” says Debra Horsfield, organization effectiveness practice leader at Watson Wyatt. “That time is rapidly approaching, and companies will once again face competition for highly skilled workers. Those companies willing to take steps to keep their employees engaged now are likely to fare better in the war for talent in the future.”
To learn more about Watson Wyatt, which has 7,500 associates in 33 countries, visit www.watsonwyatt.com.