Looking Toward Recovery: Focusing on Talent and Rewards — 2009/2010 U.S. Strategic Rewards Report

Comments

The recession has had widespread and unprecedented impact on U.S. employers and their employees. While the worst might be over, companies need to be prepared for the effects to linger even after the economy recovers. The scope and number of actions employers have taken in response to the economic crisis could have a long-lasting and detrimental impact on productivity, quality and customer service.

A critical first step for employers as conditions improve is to understand how their actions have affected their Employee Value Proposition (EVP), especially in terms of creating significant attrition risk among top-performing employees. As companies emerge from the recession, they need to ensure their EVP aligns with changes in the business environment and their own strategy and goals.

Reviewing and rebuilding their EVP will enable these employers to engage and retain the current workforce and to provide a compelling employment deal to critical-skill and top-performing employees.

Key Findings

Organizational restructuring has been pervasive and deep.

• 72% of participants have gone through a restructuring or made layoffs since the economic downturn began in 2008.
• Regardless of whether companies downsized, 89% of respondents report taking at least one or two actions to minimize the extent of workforce downsizing.
  • On average, survey participants report taking 3.5 different actions.

There has been a negative impact on some employee perceptions that could lead to higher attrition when the crisis is over.

• Top-performing employees are 20% less likely to agree that they understand the link between their own goals and the company’s goals than in 2008.
• Employees believe the changes made by their companies are affecting work quality and delivery to customers.
• 41% of employees indicate that changes have had an adverse impact on quality and customer service, while only 17% of employers believe this is the case.

These results are a signal that things are not going to return to “normal.” As a consequence, companies must take proactive measures to mitigate the negative effects of cost-cutting actions on employee morale and productivity. Employers will need to reevaluate the “deal” with employees — the Employee Value Proposition — and create a renewed bond as the economy recovers.