While 94% of HR professionals do not believe that the worst of the recession is over yet, two thirds expect to see an upturn in business over the next 12 months.
As a result, according to a new online poll undertaken by management consultancy the Hay Group, nearly three fifths of respondents expect business performance to be on or above targeted 2010 levels. A huge 71% of HR professionals working in the public sector do not anticipate benefiting from any recovery for more than 18 months, however.
The fact that business confidence is starting to return, meanwhile, will see pay freezes beginning to thaw. Three quarters of organisations that introduced such measures in 2009 plan to lift them within the next 12 months, although 23% are considering a second round.
About 79% of those questioned also intend to increase salaries over the next 12 months compared with only 57% in 2009. The median expected increase is about 2%, an improvement on predictions of a mere one per cent in March last year.
The situation is reversed in the public sector, however. This year pay increases here are anticipated to be more like 1% compared with expectations of 2% in April 2009.
About the same number of employers are likewise planning to pay bonuses over the year ahead, although the level of payout is likely to vary considerably from sector to sector. Retail and fast moving consumer goods industries are anticipated to pay out the full wack, while financial services and manufacturing are expecting them to be below target.
Claudia Canavesio, the Hay Group’s reward expert, said: "With tighter reward budgets, paying and motivating employees -particularly high performers – is a difficult task. It is important for organisations to explore the full breadth of the reward spectrum, offering a competitive total reward package."
This package should focus on non-financial elements such as career development, work-life balance and job security in order to engage and retain staff, she added.
Some 70% of respondents appeared to understand the issues, however, saying that they saw employee engagement and talent management as their key priorities for the year ahead.
The study was conducted among 134 organisations last November and was followed up by further qualitative research with 65 of them.
