UK – July 3, 2009 – European companies are currently so focused on cutting costs through layoffs, salary and hiring freezes, that they may be setting themselves up for problems in the medium term, according to research from consultants Watson Wyatt.
The firm’s survey of 200 companies from across Europe and the Middle East found that 43 per cent (52 per cent of UK companies) have taken action to reduce permanent workers. Most have also sought to hold down pay, with over 70 per cent looking to reduce their budgeted pay increases in response to the current economic climate.
“These are clearly sensible measures in these uncertain times but our concern is around how companies appear to be using their limited pay budgets,” said Carole Hathaway, European head of strategic reward consulting at Watson Wyatt.
The Watson Wyatt survey found that less than a third of companies are targeting their reward budget on key employees. Moreover, where this is happening, the focus appears to target only high performers rather than those with business-critical skills.
“Despite a majority of companies claiming to have a greater focus on their key talent, few are supporting this by actually targeting their reward spend on them,” said Carole Hathaway. “Top performers are not necessarily the same as those with business-critical skills. Few companies appear to have the reward and performance programmes that enable them to make this important distinction. But failure to reward adequately those with business critical skills – as well as high performers – can have implications on retaining these key workers when the economy recovers.”
The Watson Wyatt survey, which was conducted in mid-June, found that companies are taking a range of actions to engage their workforce:
• Increased communication on changes in the business – 75%
• Increased communication on business results – 74%
• Increased visibility of senior managers – 45%
• Increased communication on pay/reward – 41%
• Introduced/increased focus on mentoring programmes –35%
“While companies are stepping up their communication on the wider business situation, they should put more specific attention on communicating changes made to pay policies, even if that’s not going to be good news,” said Carole Hathaway.
For more information please contact:
Robert Richter
Compensation Consultant
Watson Wyatt Middle East
Premises No.1, 8th Floor, Block 10
Dubai International Academic City
00971 44363513 (direct)
00971 43640096 (office)
00971 501895816 (mobile)
Robert.Richter@watsonwyatt.com
www.watsonwyatt.com
Posted in
Salary SurveysTags:
Middle East,
pay,
cost cutting,
reward,
cutting,
costs,
layoffs,
hiring freezes,
eccononmic climate,
salaries,
pay budgets,
reduce work,
pay increase,
strategic,
high performers,
performance programmes,
pay policy,
communication
Watson Wyatt Data Services (WWDS) is still inviting companies to participate in this innovative new “Gulf Cooperation Council Allowances Survey” which has been designed to scrutinise industry compensation practices across the Gulf region with regards to the numerous cash allowances that are typically provided alongside base pay. This survey collects a broad range of detailed, city-specific data pertaining to the most common cash allowances across all countries in the Gulf Cooperation Council, namely:
- Bahrain (Manama)
- Kuwait (Kuwait City)
- Oman (Muscat)
- Qatar (Doha)
- Saudi Arabia (Al Khobar, Jeddah & Riyadh)
- UAE (Abu Dhabi & Dubai)
In 2008 we ran a very similar survey, and as such we are looking forward to analysing the data that comes out in 2009 in order to report on the effect that the global recession has been having on allowance levels such as housing assistance.
This questionnaire will collect information on all of the allowances most commonly paid by multinational and local companies across the region, namely:
- Housing allowance / assistance
- Children’s education allowance
- Utilities allowance
- Furniture allowance
- Representation allowance
- Vacation tickets
- Consolidated allowance (mainly local companies)
The 2009 GCC Allowances Survey represents a huge expansion on the housing data collected in our General Industry Surveys. The survey covers 9 cities across the GCC region In the UAE separate ranges for Dubai and Abu Dhabi will be provided. This report deals with allowances in a much more granular way than the main GIS survey. The questions are more detailed and cover aspects of allowances that are simply not covered elsewhere. For example, the following questions are asked with regards to housing allowances:
Allowance amounts for single and married employees
Measures taken to decrease housing allowance amounts where declining rents
Housing allocation criterion and property selection criterion (where company provides housing)
Proportion of costs covered
Nationalities typically eligible
Amount paid per employee category/city/country
Increase provided per employee category/city/country
Additionally, children’s education allowance, vacation ticket, utilities allowance etc. policies and amounts are collected in far more depth here than elsewhere.
If you are interested to participate in this survey please contact:
Robert Richter
Compensation Consultant
Watson Wyatt Middle East
Premises No.1, 8th Floor, Block 10
Dubai International Academic City
00971 44363513 (direct)
00971 43640096 (office)
00971 501895816 (mobile)
Posted in
Salary SurveysTags:
Salary,
Compensation,
Survey,
UAE,
Benefits,
allowances,
GCC,
Gulf Cooperation Council,
cash,
Bahrain,
Kuwait,
Oman,
Qatar,
Saudi Arabia,
Dubai,
Abu Dhabi,
Jeddah,
Al Khobar,
Riyadh,
Muscat,
Doha,
Kuwait City,
Manama,
Housing,
Housing allowance,
education allowance
