About a quarter of businesses in America have frozen workers' salaries for 2009 in the wake of a pessimistic economic outlook, according to a new survey.
Outsourcing and consulting firm Mercer in a survey released Monday said 25 percent of organizations surveyed said they have already decided not to raise their employees' pay, and another 20 percent are considering a salary freeze this year.
A year ago, just 5 percent of companies planned to suspend raises for their staff. Mercer predicted that one in three companies will have frozen wages at 2008 levels by the end of 2009.
"It's not an easy message to communicate to employees, but we think managers will be aided by the unprecedented context of these difficult decisions - including low inflation and high unemployment," said Steve Gross of Mercer.
Those companies that plan on offering raises to their employees will give smaller-than-expected pay increases, Mercer said. The average expected salary bump at those businesses was just 3.2 percent, down from a planned 3.6 percent according to an October study.
The news comes as many employers are opting to slash jobs rather than reduce or freeze pay. Announced layoffs so far this year have already topped 300,000, and the Labour Department reported Friday that employers slashed 598,000 jobs in January - the single highest monthly job-loss total since December 1974.
Mercer also reported that executives are far less likely to get a salary increase than other employees in 2009. According to the survey, just 61 percent of companies are planning to raise their executives' pay, and 77 percent of respondents plan to decrease the level of executive compensation from their October projections.
Only 69 percent of employers plan to raise salaries for employees in managerial positions.
"Given lacklustre corporate performance and recent pressure from regulators, shareholders and the president (Barack Obama), it's not surprising to see that over the past few months, more than one-third of participants who reported executive salary data went from a 2009 planned base-salary increase for their executives to a freeze," said Gross.
Agencies
Showing posts with label freeze. Show all posts
Showing posts with label freeze. Show all posts
Tuesday, February 10, 2009
Wednesday, January 21, 2009
TCS may go slow on lateral hiring
The country's largest software company, Tata Consultancy Services (TCS), plans to go slow on lateral hiring. According to a report in a leading business daily, faced with the current tough business environment, TCS will be focusing more on trainees.
The company, however, is not planning any freeze on salary hike, though it said that the next year's salary hike would be in single digit per cent range.
TCS has been very controlled about the numbers that we take from here. The focus is on trainees as from cost management perspective this will balance out, said, Ajoy Mukherjee, VP and head, global HR, TCS, in the report.
TCS which reported net additions of 8,692 employees in third quarter, the highest in any of the last five quarters, however, assured that it will honour its commitment on hiring 24,800 people during financial year 2009-10.
Mukherjee added that while I am not saying that we will not hire experienced people, but it will be based more on domain expertise and business need. Besides, for off-campus recruitment, which we did in the fourth quarter to fill on gaps due to attrition, is also clearly ruled out this year. The other focus area also is shift from onsite to offshore.
Further, despite troubles in the US economy, TCS reported a robust 32 percent Y-o-Y growth in business in the region with 320 bps improvement in operating margin at 33.4 per cent in the just ended third quarter. Growth in the European market was lower at 23.4 per cent and came on 180 bps lower margin of 29.2 per cent.
TCS, however, reported lower utilisation rate including trainees during the OND quarter. The company's utilisation rate fell from 74.7 percent in the last quarter to 71. per cent.
Agencies
The company, however, is not planning any freeze on salary hike, though it said that the next year's salary hike would be in single digit per cent range.
TCS has been very controlled about the numbers that we take from here. The focus is on trainees as from cost management perspective this will balance out, said, Ajoy Mukherjee, VP and head, global HR, TCS, in the report.
TCS which reported net additions of 8,692 employees in third quarter, the highest in any of the last five quarters, however, assured that it will honour its commitment on hiring 24,800 people during financial year 2009-10.
Mukherjee added that while I am not saying that we will not hire experienced people, but it will be based more on domain expertise and business need. Besides, for off-campus recruitment, which we did in the fourth quarter to fill on gaps due to attrition, is also clearly ruled out this year. The other focus area also is shift from onsite to offshore.
Further, despite troubles in the US economy, TCS reported a robust 32 percent Y-o-Y growth in business in the region with 320 bps improvement in operating margin at 33.4 per cent in the just ended third quarter. Growth in the European market was lower at 23.4 per cent and came on 180 bps lower margin of 29.2 per cent.
TCS, however, reported lower utilisation rate including trainees during the OND quarter. The company's utilisation rate fell from 74.7 percent in the last quarter to 71. per cent.
Agencies
Thursday, December 4, 2008
Infosys Technologies will freeze new recruitments
Infosys Technologies will freeze recruitment after meeting this fiscal year's target of hiring 25,000 staff, a telling sign the Infosys global downturn is hitting India's $52 billion outsourcing sector.
India's second largest software services firm however has no plans to cut jobs and is sticking with its third quarter outlook, CEO Kris Gopalakrishnan told reporters.
He said the outsourcing sector's growth rate would halve next year as some customers delay orders.
"Last year the IT industry grew more than 30 percent, this year it is looking at somewhere in the region of 15 percent," Gopalakrishnan said.
India's export-driven IT sector, used to a scorching pace of growth, has been hit by the financial crisis and recession in the United States, which contributes more than half their revenue.
In the last few years, the outsourcing industry has created tens of thousands of jobs, mainly attracting young workers, as global companies look to trim labour costs.
Infosys hired 16,000-17,000 employees in the first half of the fiscal year that began in April and would honour commitments to 6,000 under training, Gopalakrishnan said.
Infosys, which counts Goldman Sachs and Philips Electronics among its clients, cut its full-year dollar revenue outlook in October due to the worsening global downturn.
Gopalakrishnan said on Thursday the company would freeze fresh recruitment, apart from meeting specific skill needs.
"We will have to look at controlling our cost, controlling our expenses making sure that we run an optimised business. We will have to look at what are things we need to do in order to prepare ourselves for the recovery."
"Growth is coming more and more from emerging markets so hese are the things we need to prepare ourselves. We should not lose momentum in this slowdown," he said.
But Infosys still expects its strong client base and a weakening rupee to help it meet a forecast for December quarter earnings of $0.57 a share. The rupee has fallen nearly six percent so far this quarter against the dollar.
"Infosys is seeing further degradation of the demand environment, with headwinds from leadership changes at customers, a shrinking large deal pipeline .... Pricing pressure has emerged," CLSA Asia-Pacific said in a report this week.
India's second largest software services firm however has no plans to cut jobs and is sticking with its third quarter outlook, CEO Kris Gopalakrishnan told reporters.
He said the outsourcing sector's growth rate would halve next year as some customers delay orders.
"Last year the IT industry grew more than 30 percent, this year it is looking at somewhere in the region of 15 percent," Gopalakrishnan said.
India's export-driven IT sector, used to a scorching pace of growth, has been hit by the financial crisis and recession in the United States, which contributes more than half their revenue.
In the last few years, the outsourcing industry has created tens of thousands of jobs, mainly attracting young workers, as global companies look to trim labour costs.
Infosys hired 16,000-17,000 employees in the first half of the fiscal year that began in April and would honour commitments to 6,000 under training, Gopalakrishnan said.
Infosys, which counts Goldman Sachs and Philips Electronics among its clients, cut its full-year dollar revenue outlook in October due to the worsening global downturn.
Gopalakrishnan said on Thursday the company would freeze fresh recruitment, apart from meeting specific skill needs.
"We will have to look at controlling our cost, controlling our expenses making sure that we run an optimised business. We will have to look at what are things we need to do in order to prepare ourselves for the recovery."
"Growth is coming more and more from emerging markets so hese are the things we need to prepare ourselves. We should not lose momentum in this slowdown," he said.
But Infosys still expects its strong client base and a weakening rupee to help it meet a forecast for December quarter earnings of $0.57 a share. The rupee has fallen nearly six percent so far this quarter against the dollar.
"Infosys is seeing further degradation of the demand environment, with headwinds from leadership changes at customers, a shrinking large deal pipeline .... Pricing pressure has emerged," CLSA Asia-Pacific said in a report this week.
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