Corporate Leaders Preemptively Leaning into the Recovery: Deloitte Study

NEW YORK, November 11, 2009 — A new research report from Deloitte reveals, for the first time since initiating its longitudinal study of global talent trends and strategies in January, surveyed executives are more inclined to believe the worst of the economic crisis has passed. Moreover, while many of these leaders look to adopt talent strategies to prevent key employees from leaving for better opportunities, others may be at risk for not implementing talent or innovation strategies needed to seize the opportunities presented by a recovering economy.

“Companies may soon find themselves in a fight for talent as the recovery takes hold,” said Jeff Schwartz, principal, Human Capital, Deloitte Consulting LLP. “A defensive strategy of hunkering down with cost cutting and headcount reductions may very well prove to be a losing strategy for weathering the impending resume tsunami. To excel during changing times and the economic recovery, we believe organizations must take an ‘offensive’ approach, implementing talent strategies dedicated to driving innovation.”

The survey of 325 executives revealed the following key findings:

• The worst may be behind us. For the first time since this study was launched in January 2009, more surveyed executives now believe the worst of the economic downturn is over as opposed to impending by a decisive 31 percent to 7 percent margin.
• Reducing headcount is secondary to training and retention as a top talent priority.
  • Less than half (48 percent) of surveyed executives reported layoffs in the last quarter, down from 61 percent in May.
  • When asked to rank top talent priorities three months from now, for the first time, survey participants pushed headcount reductions down to a clear third, with just 22 percent ranking it highest, behind both training and development (32 percent) and retention (30 percent).
• Surveyed executives are ramping up retention initiatives to keep key leaders and high-potential employees on board.
  • Nearly one-in-three executives surveyed (31 percent) reported they are increasing career path opportunities — a jump of 11 percent from January (20 percent).
  • After nearly a year of austerity, even compensation is back on the table, with 28 percent reporting they plan to increase compensation levels over the next 12 months, up from 15 percent in January.
  • Talent managers also see flexible work arrangements as an effective retention tactic; 35 percent of those surveyed plan to increase their focus on this area.
• Surveyed executives clearly understand innovation will help navigate today’s difficult economy, but they are not prepared.
  • By overwhelming margins, executives surveyed responded that innovation is either very important or important to their company now (84 percent) and will continue to be important one year after the recession ends (82 percent) and three years in the future (85 percent).
  • However, more than six out of ten survey participants (61 percent) acknowledged they either had no talent strategy currently in place to drive innovation or did not know if they had one.
  • An overwhelming majority of surveyed executives (88 percent) fear they will not have the necessary talent to lead their innovation programs after the recession ends.

A copy of the report and Deloitte’s latest information about talent strategies and innovative talent and work solutions are available via Deloitte’s Talent Management website. The report is also on the Forbes Insights website. The fifth edition in Deloitte’s longitudinal survey will be published in January 2010, completing a year-long study tracking talent trends and attitudes from the depths of the recession through the emerging economic recovery.

Methodology
In this fourth edition of Deloitte’s longitudinal study of talent trends and strategies, 325 international executives participated in the survey conducted by Forbes Insights on behalf of Deloitte. Survey participants were typically senior leaders within their organizations, with 42 percent occupying the chief executive officer, chief financial officer or other C-suite position. Another 22 percent served as senior vice president, vice president or a director at their companies. Both human resources (HR) and non-HR executives were represented. All executives who participated in the September survey worked at large corporations with annual revenues above $500 million; nearly 20 percent at companies above $20 billion. Participants included executives and talent managers at both publicly traded and privately held companies. Geographically, the survey was well balanced between companies in three major economic regions: the Americas (37 percent); Europe, the Middle East, and Africa (31 percent); and Asia Pacific (32 percent). A wide range of industries was represented in the September survey, including: Consumer/Industrial Products (26 percent); Financial Services (21 percent); Technology/Media/Telecommunications (20 percent); Life Sciences/Health Care (12 percent); and Energy/Utilities (8 percent).

These reports are part of ongoing research and Deloitte’s commitment to collaborating with business and public sector leaders to help them in their efforts to address their most pressing talent challenges. The focus of Deloitte’s integrated talent and work related services includes support for such activities as talent strategies and solutions, metrics and analytics, talent innovations such as career customization, and talent infrastructure.

About Deloitte
As used in this document, “Deloitte” means Deloitte Consulting LLP and Deloitte Services LP, which are separate subsidiaries of Deloitte LLP. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries.

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