Widespread recruitment freezes are expected in 2009 as the recession continues to bite, a human capital consulting firm has warned.
Financial services companies will stop hiring and are due to implement organisation-wide restructuring to cope with the tough financial climate, according to Watson Wyatt. But they are less likely to introduce pay freezes, according to a survey of 50 HR practitioners in the financial services industry.
The news comes as unemployment figures reached a 10-year high, with the number of people out of work expected to reach two million in January.
Nearly a third (29%) of survey participants said they were restructuring across their organisation, and 27% were implementing hiring freezes. Other plans include increasing restrictions on company travel (15%), restructuring the HR function (13%) and eliminating or reducing training programmes (8%).
One undisclosed company in the survey was planning to introduce a pay freeze. But more than 80% of companies forecast their pay review budget to increase in 2009 by 3% or more.
Iain Nichols, a senior consultant at Watson Wyatt, said: “In 2008 financial services companies have been facing the twin pressures of high inflation forcing up pay settlements and uncertain economic times reducing available budgets.”
“Far from the ‘wait and see’ attitude that was adopted by some companies when the financial crisis first broke developed, companies have now taken contingency steps and are developing their plans for next year’s business,” he added.