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HR Challenges for Business in Unprecedented TimesJuly 2009

Mercer Global HR Survey 2009“Leading Through Unprecedented Times”

Mercer Consulting:

Leading Global HR Consulting Firm

More than 17,000 employees in 41 countries

Represented by AbacusConsulting in Pakistan

Survey:

Conducted May 2009

2100 organization in more than 90 countries

Focused on Talent, Compensation, Benefits and Investments

Business and Financial Performance

0 20 40 60 80 100

Asia

US

Australia

Europe

Eighty-two percent of companies globally anticipate reduced business and financial performance levels in 2009 compared to 2008, according to the survey.

Talent Management

58% companies have planned workforce cuts over the remainder of 2009 out of which 5% are planning deep cuts.

Approximately a third of organizations (35%) plan to hire talent to replacement levels only, while 15% expect overall workforce reductions and 12% expect to expand their workforces in 2009.

0 20 40 60 80 100

Asia

US

Europe

Companies’ planned workforce cuts compared with cuts over the previous six months by region

0 20 40 60 80 100

Asia

US

Europe

Compensation

Organizations globally have been more likely to freeze pay levels or defer pay increases than to implement pay cuts

In the past six months, 51% froze salaries at 2008 pay levels for at least part of their employee population; 32% froze pay enterprise-wide. Just 30% deferred 2009 pay increases, and even fewer (13%) decreased salaries from 2008 levels

2009 base pay budgets will be more than their 2008 budgets (31%), equal to 2008 budgets (33%) or less than 2008 budgets (36%)

Retirement and Health Benefits 73% of organizations globally do not plan to reduce the level of employer

contributions in the remainder of 2009.

A third have reviewed their overall fund line-ups (32%) and both investment and administrative fees (33%), while 43% are likely to take these actions by year-end

37% of organizations plan to get a better understanding of defined benefit plans. 34% had already done so prior to the survey.

Looking ahead, organizations are more likely to change the investment strategy to reduce risk (38%) rather than change the funding policy (25%)

The majority of companies (94%) have not eliminated any current health and group benefit programs to control expenses this year.

Over the past six months, 29% of respondents added wellness programs and another 38% reported that they are likely to do so.

Employee Attitudes

0 20 40 60 80 100

Job Security

Overall Impact

Retirement Plan Investments

Merit Increases

Top employee concerns

Organizations that communicate openly and foster collaboration and innovation among their workforce will

benefit most once the economy recovers“

”

Top employee concerns

Summary Survey Findings

Globally, 82% of respondents in the survey expect their company’s business performance to decline in 2009.

By and large, most companies have refrained from taking severe and broad-based steps, such as very deep workforce cuts, across-the-board salary freezes, or elimination of certain health benefit programs.

58% of respondents expect to make some reduction in their workforces. However, 37% say they will continue to hire key talent even as they reduce their workforce overall.

The HR function continues to be under cost pressure, and 21% of organizations surveyed reduced planned investments in HR services in the past six months. Some 23% are likely to do so in the remainder of 2009.

Source: Global Survey by Mercer , May 2009

Leadership to proactively plan and develop competitive strategies, instead of confronting the situation based on weak planning and assuming the ‘panic mode’.

Focus on development of strong HR systems, procedures, and practices that contribute significantly to enterprise value

Dealing with Employee Anxiety through Senior Management’s clear and timely communication will help them move past paralyzing uncertainty

Enhancing work environment based on sense of commitment and motivation will prove to be the most critical factor for employees

A challenge call…tough times can make you stronger…

Thank You!