US employment scene may cheer up in 2010, says survey

The employment scene in the US is likely to get better this year, with a majority of the firms planning to hire, a survey by global professional services firm Towers Watson says.

According to the survey of 118 large employers in the US and 459 firms globally, on the hiring front things are picking up and the percentage of firms planning to continue workforce reduction has reduced since the beginning of the financial crisis.

The survey found that 92 per cent of the respondents were planning to hire in 2010.

Moreover, the percentage of firms surveyed, which are planning targeted workforce reductions, has reduced to 36 per cent from 58 per cent.

While the survey found signs of optimism, especially predictions that employee productivity and engagement would improve over the next year, it also cautioned that the trend could result in slower hiring.

"While it's heartening - and a testament to employer focus and employee commitment - that productivity has increased, that's also part of the reason for slower hiring and more caution about increased investments in workforce programs," Towers Watson global rewards practice leader Laura Sejen said.

"As always, the question is how lean can companies run - especially as demand for products and services rises? Those slower to reinvest in their workforce could find themselves at a competitive disadvantage," Sejen added.

Moreover, given the employment patterns both pre and post crisis, 41 per cent of the survey respondents agree that it's easier to retain talent now than it was before the financial crisis, the Towers Watson survey stated.

However, 51 per cent firms covered in the survey think that retention would be more difficult a year from now.

Respondents also noted a rise in productivity over the past year, with over half (55 per cent) agreeing that employee productivity had risen compared with pre-financial crisis levels, and 48 per cent expecting it would continue to rise by next year.

Interestingly, the recession's impact on employee engagement has also been mixed, as 30 per cent report lower engagement, while 28 per cent believe employee engagement has risen since before the financial crisis.

For 2010, far more companies expect engagement to rise (39 per cent) than decline (5 per cent), the survey revealed.

The Towers Watson survey reasserted that past year had impacted employees severely in terms of pay and benefit cuts.

For instance, more than half (52 per cent) of respondents said percentage of their employees working past their desired retirement age is higher than it was before the financial crisis and 31 per cent expect it to be even higher next year.

About 32 per cent firms said their employees cost of health care coverage is higher now than it was before the financial crisis.