Top executives expect compensation to rise

Economic optimism has reached its highest level among top executives and the worst part of recession is over, a recent study has said.

Compensation levels have already started to show improvement and more than one-fourth of the executives surveyed, that included 31 per cent from Europe, Middle East and Africa, expected compensation levels to rise in the next 12 months.

Concerns about poaching of high-potential employees by competitors have started showing, the survey said.

In the Deloitte survey, over 32 per cent of the executives said their companies were planning to increase their career path opportunities over the coming year.

Executives also believe the worst of the recession was over as companies look to move to strike the right balance between offensive and defensive talent strategies, said the survey.

Talent priorities are shifting and four out of ten executives expect their companies to increase programmes aimed at developing high potential employees and cultivate corporate leaders.

The survey was conducted by Forbes Insights for Deloitte. Since January 2009, Deloitte has been conducting a longitudinal survey to gauge how senior executives and talent managers are positioning their workforces, both in deep recession and emerging recovery.

The year-long longitudinal series surveyed global executives across all industries, at large businesses worldwide spread in three major economic regions: the Americas (37 per cent); Europe, the Middle East and Africa (31 per cent); and Asia Pacific (32 per cent).

Rana Ghandour Salhab, regional talent and communications partner at Deloitte in the Middle East, said: "Looking into the recovery, companies can no longer depend on the recession as their primary retention strategy for keeping critical employees.

"We expect executives to continue to shift their talent portfolios from 'defensive' measures, such as cutting headcount and focusing primarily on costs, to 'offensive' programmes, including retention of critical leaders and workers and increased spending on training and development with a focus on leadership.

"In addition, our research shows companies committed to leadership programmes maintained their focus during the recession and are continuing to invest in developing new career paths for their top performers."

Executives from companies that had no layoffs in the last three months showed more confidence that their workforces had been right sized for the new economy and saw no need for layoffs over the next quarter.

The companies that have not planned layoffs are planning to increase programmes to develop high-potential employees, the survey said.

As the recession has ebbed and economic confidence risen, many survey participants are positioning their companies for better times by reviving training and development and retention initiatives that may have been put on hold earlier this year.

The report said: "While cost-cutting measures remain prevalent, over the next three months, training and development and retention programmes will be competing for the top spot among talent priorities with the executives who participated in this survey – and maybe for their competitors as well."

It said that in 2010, companies could no longer depend on the recession as their retention and talent strategy. "Companies that achieve the best balance of offensive and defensive talent strategies will have the inside track on the recovery curve," it said.

Based on a year's worth of data, the profile of such companies is coming into focus: companies that do not foresee further painful layoff decisions, companies that have committed themselves to retaining top talent, and companies that are investing in "world-class" leadership programmes to build robust pipelines of emerging and senior leaders, the report said.

Competitors poaching high potential employees was emerging as a big concern among executives.

"More than half, 54 per cent, of the executives surveyed expressed a high or very high concern about competitors poaching high- potential employees. This may explain the revival of several key retention initiatives that remained dormant during the recession."

Looking forward, the survey highlighted the need for companies to adopt a new approach related to retention this year.

While some talent managers may be tempted to neglect retention efforts in a period of high unemployment, companies that follow this course risk losing critical talent and being left behind by competitors as organisations move up the recovery curve, it said.

Even as cutting and managing costs remained the top strategic issue for the executives surveyed in December, half of the surveyed executives said "acquiring, serving, retaining" customers was a strategic issue capturing the most management attention.

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