Economic Optimism Reaches its Highest Level: Deloitte Study

Moving Past the Recession and into the Recovery, Many Companies Refocus their Talent Priorities on Retention and Leadership Development

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Deloitte

Jan 27, 2010, 09:00 ET

NEW YORK, Jan. 27 /PRNewswire/ -- Since initiating its year-long study of global talent trends and strategies, Deloitte reveals in its latest research report that economic optimism has reached its highest level among surveyed executives since the study's inception. According to Deloitte's December 2009 survey, more than one-third of the 335 surveyed executives now believe the worst of the recession is behind us as companies look to move forward to find the right balance between offensive and defensive talent strategies.

"Looking into the recovery, companies can no longer depend on the recession as their primary retention strategy for keeping critical employees," said Jeff Schwartz, principal, Human Capital, Deloitte Consulting LLP. "We expect executives to continue to shift their talent portfolios from 'defensive' measures, such as cutting headcount and focusing primarily on costs, to 'offensive' programs, including retention of critical leaders and workers and increased spending on training and development with a focus on leadership. In addition, our research shows that companies committed to world class leadership programs maintained their focus during the recession and are continuing to invest in developing new career paths for their top performers and to cherry-pick the best talent available in the marketplace."

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 results of the December survey -- the final edition in Deloitte's year-long, longitudinal survey of global talent trends and strategies -- revealed the following key findings:

Companies are (Cautiously) Optimistic

In December, more than one-third (35 percent) of the executives surveyed predicted the worst of the economic crisis is behind us -- the highest level of economic confidence since the survey began in January 2009.
Cutting and managing costs remains the top strategic issue for the executives surveyed in December, just as it has in every previous survey. However, 50 percent of surveyed executives named "acquiring/serving/retaining" customers as a strategic issue capturing the most management attention.

Talent Priorities are Shifting, Albeit Slowly

Reducing employee headcount remained the leading current talent priority, ranked No. 1 by 35 percent of the executives and talent managers who participated in this survey, followed by retention (28 percent) and training and development (25 percent).
A ranking of talent priorities over the next three months produced a virtual dead heat, with reducing employee headcount at 31 percent, training and development at 29 percent and retention at 27 percent.
Heading into the first quarter of 2010, only 39 percent of talent managers and executives who participated in this survey anticipate additional layoffs in the next three months, compared to 51 percent who see no layoffs on the horizon.

Training and Development Yield World-Class Talent

More than four in 10 executives surveyed expect their companies to increase programs aimed at developing high potential employees (47 percent) and cultivating corporate leaders (43 percent).
Nearly three-quarters of surveyed executives believe that leadership development was either critically important (27 percent) or very important (45 percent) at their companies. And, an overwhelming eight out of 10 either agreed (55 percent) or strongly agreed (25 percent) that their companies have a clear leadership development strategy.
Despite near universal agreement on the importance of leadership programs, surveyed executives do not have a high sense of confidence about their efforts in this area. Only 10 percent of survey participants describe their leadership initiatives as "world-class across the board."

A copy of this report series and Deloitte's latest information about talent strategies and innovative talent and work solutions are available via Deloitte's Talent Management website. This report is also on the Forbes Insights website. Deloitte will publish a comprehensive study tracking the shifts in talent strategies, trends and tactics throughout the entire 2009 longitudinal survey this spring.

Methodology

In the fifth and final edition of Deloitte's 2009 longitudinal study of talent trends and strategies, Forbes Insights surveyed 335 executives, 44 percent of whom held CEO, CFO, or other C-suite positions. All of these senior executives worked in large companies with revenues of $500 million+ per year, including three-quarters (77 percent) who served in companies larger than $1 billion in revenues and one-third (32 percent) whose companies reported revenues higher than $10 billion. These executives were evenly balanced between the world's three major economic regions: 37 percent in the Americas; 32 percent in Europe/Middle East/Africa; and 31 percent in the Asia Pacific region. A wide range of industries were represented, including Consumer/Industrial Products (22 percent), Technology/Media/Telecommunications (21 percent), Financial Services (19 percent), Life Sciences/Health Care (9 percent) and Energy/Utility (9 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.

SOURCE Deloitte