Deloitte report tracks the way business leaders were shifting their talent priorities and strategies to meet the challenges of today’s economy and their plans to clear the hurdles to economic recovery.

1. Managing talent
in a turbulent economy
Clearing the hurdles
to recovery
July 2009
Talent

2. Contents
2 Key findings
3 Preparing for an economic upturn?
4 More issues competing with cutting costs for management’s attention
6 Layoffs and headcount reductions still prevalent
8 Talent priorities shift toward retention and training and development
10 Talent managers emphasize experience and leadership
11 Spotlight on talent retention
16 Clearing the hurdles
17 Implementing effective retention tactics
18 Survey participants/demographics
20 Contacts
Managing talent in a turbulent economy – July 2009 1

3. Key findings
Many business executives around the world cautiously • This budding optimism is reflected in the actions
believe the worst of the economic crisis has passed, these executives are taking to prepare for an
based on a recent Deloitte survey. With a more optimistic eventual upturn in the economy. While headcount
outlook on their horizon, they now have new concerns reductions and other cutbacks remain prevalent,
that a “resume tsunami” may be building, ready to hit many surveyed executives are sharpening their
once the economy turns and their employees begin to focus on retention and employee development
consider new opportunities. Are companies devising and initiatives so they can be prepared when the
implementing effective retention strategies to hold onto turnaround begins.
the key talent they will need to prosper when the eventual
recovery comes? • Once the recovery begins to take hold, these
business executives and talent leaders can expect a
To understand how the current economic crisis has “resume tsunami” as unemployment declines and
affected talent, Deloitte has been conducting a voluntary turnover rises. While many of the surveyed
longitudinal survey to gauge how top executives and talent managers appear to be updating retention
talent managers across the global economy are reshaping plans and devising retention strategies in anticipation
their workforces as they confront the most challenging of a turnaround, Deloitte believes the depth and
operating environment in generations. The May 2009 quality of these moves will separate the talent
survey, similar to the January and March editions, tracked “winners” from the talent “losers” when the
the ways select business leaders are shifting their talent economy improves.
strategies and priorities to meet the challenges of today’s
sideways economy and how they plan to clear the hurdles • Surveyed talent managers and executives are most
to economic recovery. The results of the May survey concerned about losing younger employees
revealed the following key findings: from both Generation Y (under age 30) and
Generation X (ages 30-44). To retain these future
• Pessimism about the broader economy has given leaders, many are considering a mix of retention
way to the first hints of optimism. Senior corporate initiatives, including greater financial incentives
leaders surveyed still expect economic conditions to and flexible work arrangements.
remain difficult but, for the first time this year, the
number of executives who predict “the worst is yet • Although retention planning is widespread, one fifth
to come” declined, while those who report “the of executives surveyed report they are doing nothing
worst is behind us” increased significantly. to revise their workforce strategies to prepare for
an eventual recovery. And few of these executives
have a clear understanding of the negative impact
that increased turnover will have on their company’s
ability to perform or on their bottom line.
Managing talent in a turbulent economy – July 2009 2

4. Preparing for an
economic upturn?
In May, 319 senior business leaders—both HR and non-HR For the first time in this longitudinal study, the number of
executives—participated in a survey conducted by Forbes executives who reported the worst is yet to come in terms
Insights on behalf of Deloitte. These executives serve at of the economy declined—and significantly, from 32% in
large businesses (annual sales of $500+ million) across a March to 18% in May (Figure 1). At the same time, the
range of industries and the three major economic regions: group that believes the worst is behind us doubled to 16%
the Americas, Asia Pacific (APAC), and Europe, the Middle from 8% in March and 5% in January. These executives
East, and Africa (EMEA). may not be ready to predict an economic upturn, but
more seem to think they can see the bottom from where
As in the January and March surveys, participants clearly they are today—a decisive departure from previous
recognize the challenges their companies continue to face surveys.
in the broader economy. However, despite a generally
sober economic outlook, there was a marked shift in the
May survey toward a more optimistic view of the future.
Figure 1. Executive outlook on the economy: May vs. March vs. January
66%
Things are tough and will be for a while 58%
64%
18%
The worst is still ahead 32% May
30%
March
16%
The worst is behind us 8% January
5%
As used in this document, “Deloitte” means Deloitte Consulting LLP, a subsidiary of Deloitte LLP. Please see www.deloitte.com/us/about for a detailed description of the legal
structure of Deloitte LLP and its subsidiaries.
Managing talent in a turbulent economy – July 2009 3

5. More issues competing with cutting
costs for management’s attention
Both the challenges of the tough economy and the hints In May, more than half of executives (56%) ranked
of optimism about a better future ahead are reflected in cutting and managing costs as their top strategic
the strategic priorities that compete for attention among issue—still the highest of any category, but down seven
the top executives and talent managers surveyed. Cost percentage points from March (Figure 2). In March, cost
cutting remains a paramount concern, yet there are signs cutting outranked the next closest management priority,
that austerity measures may be abating. acquiring/serving/retaining customers, by 23 points (63%
to 40%); however, by May, the margin was down to 13
points (56% to 43%).
Figure 2. Current strategic issues: May vs. March
Cutting and managing costs 56%
63%
Acquiring/serving/retaining customers 43%
40%
33%
Managing human capital
30%
Improving top and bottom 30%
line performance 30%
Developing new products and services 28%
21%
Addressing risk and regulation 20%
challenges May
16%
March
Expanding into global and new markets 16%
12%
Capitalizing on M&A/divestiture/ 14%
restructuring 12%
Leveraging technology 12%
12%
Investing in innovation/research 9%
and development 7%
Other 1%
1%
Digging Deeper: Strategic priorities differ depending on whether a company has
already taken steps to align its workforce with today’s economic realities. Surveyed
executives who are not expecting more layoffs are more likely to be looking at new
opportunities compared to those who are expecting more layoffs in the coming
quarter—those who are not expecting more layoffs are more likely to be
expanding into new and global markets (23% vs. 10%), investing in innovation
and research and development (15% vs. 4%), and acquiring and serving new
customers (52% vs. 38%).
Managing talent in a turbulent economy – July 2009 4

6. In a sign that these executives are also focused on the Digging Deeper: Across a range of industries,
future, developing new products and services rose by surveyed executives are predominantly focused on
seven points on the management agenda, with 28% cutting and managing costs and acquiring and serv-
of executives ranking it a top priority. Managing human ing customers. However, examining the full range
capital has also been a consistent strategic priority for of strategic issues shows some significant variations
these business leaders—ranging from 27% in January to (Figure 3). Executives at Financial Services firms were
30% in March to 33% in May. more than twice as likely to list “addressing risk and
regulation challenges” as a top strategic priority
(41% compared to 20% overall). Nearly one-third
(30%) of Technology/Media/Telecom (TMT)
Surveyed executives who are not companies are focused on expanding into new mar-
expecting more layoffs in the quarter kets vs. 16% overall.
ahead are more likely to be expanding
into new markets, investing in
innovation, and signing-up new
customers.
Figure 3. Current strategic issues by industry
Consumer/ Life Sciences/ Technology/
Ranking Industrial Products Health Care Media/Telecom Energy/Utilities Financial Services
1 Cutting and managing Cutting and managing Cutting and managing Improving top Cutting and managing
costs costs costs and bottom line costs
performance
2 Acquiring/serving/ Acquiring/serving/ Acquiring/serving/ Cutting and managing Addressing risk and
retaining customers retaining customers retaining customers costs regulation challenges
3 Developing new Managing human Developing new Acquiring/serving/ Acquiring/serving/
products and services capital products and services retaining customers retaining customers
Managing human Managing human
capital capital
(2-way tie) (2-way tie)
Managing talent in a turbulent economy – July 2009 5

7. Layoffs and headcount
reductions still prevalent
With layoffs continuing to capture headlines and for all three surveys and a 19-point jump over January
unemployment rates rising worldwide, it is not surprising (42%) and 14 points higher than March (47%) (Figure 5).
that reducing headcount remains a significant focus for For the first time in the three surveys, a greater percentage
surveyed executives when it comes to managing talent. of executives see layoffs ahead (50%) compared to those
When asked to rank their current talent priorities, 42% of who do not (43%).
respondents in May put reducing employee headcount at
the top of the list—on par with both March (39%) and As in past surveys, it seems that layoffs are difficult to
January (38%) (Figure 4). Measured against other talent anticipate. In March, 42% of executives predicted layoffs
priorities, reducing headcount outpolled the next highest over the next three months, yet 61% of executives report
by an 18-point margin (42% to 24%). they actually experienced layoffs in May. Layoffs also
appear to be concentrated among certain companies.
Talent managers who are focused on reducing Three-quarters (75%) of those who report they had layoffs
headcount usually report layoffs and the May survey in the last three months expect more layoffs in the next
was no exception. More than six in ten executives who three months; however, only 11% of those who have not
participated in the survey (61%) indicate their companies had layoffs in the last three months expect to conduct
had laid off workers during the last three months—a high layoffs in the next three months.
Figure 4. Current talent priorities: May
Reducing employee headcount 42% 16% 16% 26%
Top priority
Medium priority
Training and development 24% 34% 30% 12%
Low priority
Retention 22% 34% 28% 16% Lowest priority
Recruitment 12% 16% 26% 46%
Figure 5. Organizations conducting layoffs: Digging Deeper: Participating companies in the
May vs. March vs. January
Energy/Utilities sector were least likely to
61% experience layoffs: 33% reported layoffs in the
May
past three months and 27% anticipate layoffs during
March
the next quarter. Consumer/Industrial Product compa-
50% January
47% nies were the most likely to experience layoffs in the
42% previous quarter (67%). Going forward, Financial
42%
38% Services executives were the most likely to anticipate
layoffs with 53% reporting layoffs were likely in the
coming quarter.
Experienced layoffs Anticipating layoffs
past three months next three months
Managing talent in a turbulent economy – July 2009 6

8. A global perspective: Regional differences
For a global perspective on talent trends and attitudes, This regional variance in strategies is also reflected in
Deloitte’s study canvassed the views of top executives how international executives ranked their current talent
and talent managers in the three major economic priorities. Reducing employee headcount remains the
regions: the Americas, Asia Pacific (APAC), and Europe, top current talent concern for surveyed executives in
the Middle East, and Africa (EMEA). the Americas (48%) and the EMEA region (51%), but
ranks lower for APAC executives—only 26% of APAC
While the May survey revealed cautious optimism talent managers called it their top concern, compared
among business leaders that the worst of the economic to 38% of APAC executives who listed training and
crisis is behind us, this opinion is not universally shared development. Less focused on headcount reductions,
from region to region. Executives in the Americas, in APAC executives also foresee fewer layoffs, with only
particular, appear somewhat more hopeful about 37% of APAC respondents predicting layoffs in the
their economic futures than their counterparts in next quarter compared to 58% in EMEA and 54% in
APAC and EMEA. According to the survey, only 11% the Americas.
of EMEA executives and 15% of APAC executives
believe the worst is behind us, compared to 21% of When it comes to trends in recruiting and hiring,
Americas executives. EMEA executives appear to be trailing their colleagues
around the world. Just 26% of EMEA executives who
Executives in different regions of the global economy participated in the May survey expect to increase
also appear to be employing different strategies to experienced hires in the year ahead, compared
survive difficult times. By a 14-point margin (61% to to 47% in the Americas and 39% in APAC. EMEA
47%), executives in the Americas were more likely executives also report they are less likely than their
to name cutting costs as a top management priority global counterparts to recruit more critical talent in
compared to APAC executives. light of the economic climate, trailing both Americas
executives and APAC executives by double digit
margins (40% for EMEA vs. 50% for APAC vs. 51%
for Americas).
A major focus of the May survey is the “resume
tsunami” that will likely hit when the economy
eventually turns, resulting in heightened competition
among companies to keep and recruit critical talent.
The study suggests that APAC executives have already
gotten a jump on their competitors: 48% of APAC
talent leaders report their company has a retention
plan ready for the economic rebound, a greater
percentage than companies in both the Americas
(30%) and EMEA (29%).
Managing talent in a turbulent economy – July 2009 7

9. Talent priorities shift toward retention
and training and development
While the data suggests that surveyed executives cannot Almost two out of three executives surveyed (64%) expect
predict with certainty when the recovery will take hold, training and development to be their number one or
there are clear indications that their companies are putting number two talent priority during the coming quarter,
plans in place to capitalize when the recession ends. compared to 50% who rank reducing headcount high
One significant development in the May survey was how on their list. Nearly half of executives (47%) also report
executives expect to shift talent priorities over the next that their companies plan to invest in building new skills
three months. in their workforces, another sign that companies are
preparing for the future.
Looking forward to the coming quarter, surveyed
executives and talent managers predict that employee
Digging Deeper: Surveyed executives in TMT are
development and training initiatives will rival headcount
particularly focused on training and development as
reductions as their top talent priority. When asked to
a top talent priority in the next quarter: 47% list it
anticipate their company’s talent priorities three months
as their number one concern compared to 31% of
from now, 34% of survey participants rank reducing
overall respondents who report it is their number one
headcount first, closely followed by training and
concern. Financial Services executives rank training
development at 31% (Figure 6).
and development very low on their list of priorities—
only 17% report it is a number one concern.
Figure 6. Talent priorities: Next three months
Reducing employee headcount 34% 16% 17% 33%
Top priority
Medium priority
Training and development 31% 33% 26% 10%
Low priority
Retention 24% 30% 26% 20% Lowest priority
Recruitment 11% 21% 31% 37%
Managing talent in a turbulent economy – July 2009 8

10. As employee development efforts take on additional This renewed emphasis on developing employees can be
importance over the coming months, many surveyed seen most clearly when comparing May’s survey results
executives are ramping up specific training programs with past surveys. Compared to March, the percentage
within their companies. More than four in ten executives of executives who anticipate an increase in leadership/
report they plan to increase training and development management development training jumped by 15 points
programs related to high-potential employee development (42% to 27%), with double-digit increases also occuring
(46%) and leadership/management development (42%), in high-potential employee development training (46% to
while 35% are expanding onboarding initiatives and 33% 34%) and onboarding programs (35% to 25%).
anticipate greater investments in regulatory, security, and
risk training (Figure 7).
Figure 7. Areas of increased focus on training and development over the next 12 months: May vs. March
High-potential employee development 46%
34%
Leadership/management development 42%
27%
Onboarding, orientation 35%
25%
33%
Regulatory, security and risk training
24%
30% May
Job-specific – sales, customer service
24% March
26%
Job-specific – operations 23%
24%
Job-specific – IT, finance, HR
22%
Digging Deeper: Faced with greater regulatory scrutiny, Financial Services firms
are stepping up their training efforts, with 47% reporting they plan to increase
regulatory, security, and risk training over the next year. One in four executives in
Life Sciences/Health Care (39%) and Energy/Utilities (40%) sectors also plan to
increase regulatory, security, and risk training.
Managing talent in a turbulent economy – July 2009 9

11. Talent managers emphasize
experience and leadership
As training programs ramp up, surveyed executives are Looking at the numbers, 38% of executives surveyed in
also looking to add experience and leadership to the ranks May plan to increase recruiting of experienced hires—
of their workforces. While graduating college students, an 11-point jump from March’s 27% (Figure 8). In fact,
part-timers, contract hires, and outsourced hires can all experienced hires are still the only category that can
expect the tight job market to continue, employees with expect a net increase in recruiting attention by surveyed
experience and leadership are in demand at many of the companies over the next year—a trend evident in all three
surveyed companies. surveys. Overall, recruiters at these companies plan a net
decrease of campus hires, contract hires, part-time hires,
and offshore/outsourced hires.
47% of all executives surveyed plan to Nearly half of executives and talent managers (47%)
surveyed report their companies plan to recruit
recruit more critical talent to manage the more critical talent to manage the current economic
current economic environment—up environment—a significant jump since March when the
figure was 34%. About four in ten executives (41%)
13 points from 34% in the March survey. expect to acquire hard-to-find leaders, compared to 29%
in March and 30% in January (Figure 9).
Figure 8. Areas of increased focus on recruitment over the next 12 months: May vs. March vs. January
38%
Experienced hires 27%
28%
26%
Part-time hires 26%
26% May
25% March
Campus hires 15% January
15%
25%
Contract hires 22%
27%
25%
Offshore or outsourced hires 16%
17%
Figure 9. Actions anticipated due to economic climate: May
Recruit more critical talent 47%
Invest in building new skills
47%
in your workforce
Focus on product development 44%
and innovation
Recruit more critical leaders 41%
None 14%
Other 1%
Managing talent in a turbulent economy – July 2009 10

12. Spotlight on
talent retention
The coming “resume tsunami” Nearly three out of four executives (73%) report that their
Following previous recessions, many companies company either has a retention plan in place now or is
experienced a “resume tsunami” as employees with actively developing one. Despite this strong evidence of
the desire to move on took increased confidence from retention planning, a significant 20% of business leaders
the improving economy. Voluntary turnover rises as and talent managers admit they are doing nothing to
unemployment falls, and talent once again becomes a manage their workforces in preparation for better times
scarce commodity.* Have business leaders learned from (Figure 10).
past experience? That remains to be seen.
Despite today’s tight employment market—where layoffs Figure 10. Updated plan in place to guide retention once
the economy turns around
remain prevalent and recruiting is down—many talent
managers are currently preparing workforce plans to get Don’t know
in front of the economic upturn that will eventually come. 7%
Yet a surprisingly significant number are at risk of being Yes
35%
blindsided when the talent market heats up again.
No
As part of the May survey, we shined a spotlight on talent 20%
retention—the plans executives are making to retain key
employees, the potential hurdles they see to keeping their
core workforces intact, and the specific tactics they are
using to meet their overall retention goals. These efforts
will help determine whether a company is positioned to
charge ahead during a recovery or whether that company
finds itself on the defensive as its top talent and leaders
head for the door. Working on one now
38%
Digging Deeper: In the race for talent, many employers attempt to separate
themselves by offering an employee value proposition that distinguishes the unique
advantages of their companies. Yet 47% of survey participants report their
organization either does not offer a specific employee value proposition or they
do not know what an employee value proposition is.
*Bill Chafetz, Robin Adair Erickson, and Josh Ensell, “Where did our employees go? Examining the rise in voluntary turnover
during economic recoveries,“ Deloitte Review, Deloitte Development LLC, 2009.
Managing talent in a turbulent economy – July 2009 11

13. Turnover concerns: The flip side of retention Digging Deeper: By a ten-point margin (17% to
An effective retention plan calls for analyzing more 7%), companies that expect to conduct more layoffs
than just what causes employees to jump ship—talent in the coming quarter are more likely than those
managers must also understand which employees they not anticipating layoffs to believe their voluntary
are most at risk of losing. Many talent managers know turnover rate will significantly increase in the year af-
from experience that when the economy heats up again, ter the current economic downturn ends. 72% of ex-
they risk losing key employees to competitors. About half ecutives at these companies are especially concerned
(46%) of executives recalled that voluntary turnover at about losing critical talent—an 11-point margin over
their companies either increased or increased significantly those who do not expect layoffs (61%).
after the 2001-2002 recession ended.
Looking ahead to the end of the current recession, 52% about retaining high-potential talent and leadership in the
of surveyed executives predict an increase in voluntary year after the recession ends, and an identical number are
turnover at their companies, while just 13% predict a either highly or very highly concerned about losing critical
decrease. Not surprisingly, executives exhibited the highest talent.
levels of concern about losing “high-potential talent
and leadership” and “critical talent.” Specifically, 65% of Talent managers and business executives see greater
executives report they have a high or very high concern turnover potential among younger employees. Generation
Y (under age 30) workers are considered most likely to
be on the move, with 63% of executives predicting an
increase or a significant increase in turnover among this
Nearly two-thirds of executives (65%) group, followed by Generation X (ages 30-44) at 46%.
Only one in four expect an increase in departures by
are highly or very highly concerned Baby Boomers (ages 45-64) or Veterans (over age 65)
about losing high-potential and critical (Figure 11).
talent in the year after the recession ends.
Figure 11. Expected change in organizations’ voluntary turnover rates among different generations 12 months
after recession ends: Increase/increase significantly vs. decrease/decrease significantly
24% 39%
Gen Y (under age 30)
7% 1%
9% 37% Increase significantly
Gen X (ages 30-44)
8% 2% Increase
Decrease
Decrease significantly
9% 16%
Baby boomers (ages 45-64)
21% 3%
9% 16%
Veterans (over age 65)
19% 12%
Managing talent in a turbulent economy – July 2009 12

14. For some companies, this concern is becoming a reality, Digging Deeper: Post-recession, surveyed Life
with many executives already seeing their competitors Sciences/Health Care executives appear to be much
poach their best talent. More than one in four executives more concerned about voluntary turnover than any
(26%) report an increase in turnover of high-potential other industry. 68% of these Life Sciences/Health
employees during the last three months—the highest Care executives predict such turnover will increase or
percentage in any edition of the survey by a ten-point significantly increase—12 points higher than the next
margin (Figure 12). Overall turnover was also up, with closest industry (TMT at 56%) and 16 points higher
25% of survey participants reporting their companies than the overall average of 52%.
experienced an increase—again the highest percentage in
the three surveys.
Turnover of high-potential employees
is on the rise: 26% of executives report
an increase, the highest response rate
from previous editions of the Deloitte
survey series.
Figure 12. Impact of the economic climate on turnover: Companies reporting an increase in May vs. March vs. January
33%
Retirements 25%
15%
26% May
High-potential voluntary turnover
(not including retirements) 16% March
16%
January
Voluntary turnover 25%
(not including retirements) 18%
16%
Managing talent in a turbulent economy – July 2009 13

15. Identifying the hurdles to retention According to survey participants, the economic downturn
Effective retention planning starts with a hard-headed is clearly taking a toll on retention. When asked to list the
analysis of a company’s assets and liabilities when it most significant barriers to retaining employees today,
comes to attracting and keeping key employees— survey respondents rank financial issues highest, including
including a catalogue of each company’s retention the lack of compensation increases (44%) and the lack
barriers. The survey suggests that, at a time when of adequate bonus or other financial incentives (28%)
executives are clearly worried about competitors poaching (Figure 13). Managers pressured to do more with less in a
high-potential employees and company leaders, their difficult economy also cite excessive workload (30%) as a
talent managers have a pretty clear idea where their significant hurdle to retaining employees.
companies currently fall short.
Figure 13. Top barriers to retaining employees: Today vs. 12 months after recession ends
Lack of compensation increases 44%
27%
Excessive workload 30%
21%
Lack of adequate bonus or other 28%
financial incentive 25%
28%
Lack of job security
15%
Lack of career progress 21% Today
22%
12 months after
Inadequate or reduction in benefits 14% recession ends
(i.e., health and pensions) 13%
14%
New opportunities in market
39%
Dissatisfaction with supervisor 13%
or manager 14%
11%
Lack of challenge in the job
15%
Biggest retention barrier today:
10% Lack of compensation increases (44%)
Lack of trust in leadership 12%
Biggest retention barrier 12 months
Poor employee treatment during 8% after recession:
downturn 8% New opportunities in market (39%)
8%
Too much travel
8%
8%
Declining perception of company
8%
Lack of training and development 7%
opportunities 9%
7%
Lack of flexible work arrangements
9%
Limitations due to new government 6%
regulations (e.g., TARP) 4%
7%
Don’t know
8%
Managing talent in a turbulent economy – July 2009 14

16. Interestingly, surveyed executives anticipate the barriers A red flag for talent managers and
to retention will shift when the recession subsides. These business executives
talent managers are evidently worried that employees are The retention spotlight raised one big red flag:
simply biding their time until the upturn comes, with 39% Few surveyed executives seem to have a clear
reporting that new opportunities in the job market will understanding of the negative impact that
be the biggest hurdle to retaining employees in the 12 increased turnover will have on their company’s
months following the end of the recession. ability to perform or on its bottom line.
There was also significant concern that the lingering Replacing employees—particularly critical talent
effects of a poor economy will make it difficult to offer and high-potential employees who are the biggest
the financial incentives talent managers need to keep departure risks—is extremely costly. After taking
employees on board: One-quarter of survey participants into account the loss of intellectual capital, client
report lack of compensation increases (27%) and lack of relationships, productivity, experience, and other
bonuses (25%) will pose a significant barrier to retention job skills, plus the cost of recruiting a new hire,
after the recession ends. companies can expect the cost of replacing a
lost employee to be 2-3 times that employee’s
annual salary.
Digging Deeper: Surveyed Energy/Utilities talent
managers appear concerned that they will not be
Despite these costs—or perhaps unaware of
able to keep pace with other industries once the
them—nearly half (44%) of surveyed managers
recovery begins. More than half (53%) predict that
believe voluntary turnover will actually increase
new opportunities in the job market will be their
their company’s profitability. Only 17% report
number one barrier to retention—well above 39%
it would decrease profitability.
overall—and 43% of Energy/Utilities leaders report
that an inability to provide adequate bonuses or
Clearly retention will be a major focus as these
other financial incentives will make it harder to
companies prepare their talent strategies and
retain employees, 18 points higher than the overall
programs for an expected revival of economic
response (25%).
growth somewhere down the line. And just as
clearly, the actions their executives take to retain
critical talent over the next 12 months will have
a significant impact on the companies’ financial
performance.
Managing talent in a turbulent economy – July 2009 15

17. Clearing the hurdles
In the May survey, Deloitte asked the participating By a fairly significant margin, these executives believe
executives (most of whom likely come from the ranks that Gen Y and Gen X employees would respond
of the Generation X and the Baby Boomer generations) most favorably to financial incentives such as greater
what retention tactics would be most effective in retaining compensation and larger bonuses (Figure 14). According
employees from the Y, X, Baby Boomer, and Veteran to survey participants, workers from the Baby Boomer and
generations. Veteran generations would prefer an increase in other
benefits, such as health care and pensions. Interestingly,
surveyed business executives and talent managers rank
flexible work arrangements high on the list of retention
Surveyed executives believe that tactics for all generations.
retention priorities should be driven
by generational differences.
Figure 14. Executive perceptions of most effective retention initiatives by generation
Gen Y Gen X Baby Boomers Veterans
Ranking (under age 30) (ages 30-44) (ages 45-64) (over age 65)
1 Additional Additional bonuses Additional benefits Additional benefits
compensation (46%) or financial incentives (i.e., health and (i.e., health and
(37%) pensions) (42%) pensions) (36%)
2 Additional bonuses Additional Additional bonuses Flexible work
or financial incentives compensation (33%) or financial incentives arrangements (26%)
(30%) (30%)
3 Flexible work Flexible work Flexible work Additional
arrangements (29%) arrangements (25%) arrangements (28%) compensation (22%)
Managing talent in a turbulent economy – July 2009 16

18. Implementing effective
retention tactics
The survey also suggests that some talent managers are Digging Deeper: Nearly half (48%) of Consumer/
already looking at ways to reshape retention initiatives Industrial Products executives report they will focus
as part of an overall effort to prepare for an eventual on flexible work initiatives in the next 12 months,
economic recovery. closely followed by 44% of Life Sciences/Health Care
talent managers.
For the first time since this longitudinal study began in
January, more executives report they are focusing on
Deloitte believes the actions companies take today will
increasing rather than decreasing compensation levels.
separate the talent winners from the talent losers once the
While the majority (59%) expects compensation levels
economy begins to rebound. Retention promises to be a
to remain unchanged, talent managers who anticipate
growing challenge when more employees feel confident
raising compensation levels outpoll those planning to
enough in the economy to test the job market again.
reduce compensation by 11 percentage points (25%
Ultimately, the effectiveness of your company’s retention
to 14%)—a near reversal from March when 15%
strategies will determine whether your high-potential
predicted compensation increases vs. 25% who predicted
employees become your future leaders—or the future
compensation decreases. The number of executives who
leaders of your competitors.
are looking to increase benefit levels has also been on
the rise—from 13% in January to 21% in May—although
slightly more still anticipate decreasing benefits (23%).
Digging Deeper: Leaders in a range of industries reported that they are
more likely to increase compensation than decrease compensation in the year
ahead, including Consumer/Industrial Products, Life Sciences/Health Care, and
even the hard-hit Financial Services industry.
Few surveyed executives ranked flexible work
arrangements as a major hurdle to retaining employees,
with just seven percent reporting it is currently an issue
at their company. Nevertheless, surveyed talent managers
believe that each generation highly values flexible work
arrangements such as telecommuting and reduced
workweeks. This may explain why 37% of executives plan
to increase their focus on workplace flexibility in the year
ahead, compared to just 23% in March.
Managing talent in a turbulent economy – July 2009 17

19. Survey participants/
demographics
In this third edition of Deloitte’s longitudinal study of All respondents served at large organizations (all above
talent trends and strategies, 319 international executives $500 million in annual revenue, a majority with more than
participated in an on-line survey conducted by Forbes 5,000 employees, and 34% more than 10,000) (Figure
Insights. Survey participants were typically senior leaders 16). These executives came from a mix of publicly traded,
in their companies, with 40% occupying the CEO, CFO, or privately owned, and non-profit organizations.
other C-suite position (Figure 15).
Figure 15. Respondents by job titles
SVP/VP/director 19%
Head of department 17%
Other HR or talent executive 11%
CIO/technology director 10%
Head of business unit 10%
CEO/president/managing director 9%
CHRO/human resources director 9%
CFO/treasurer/comptroller 7%
Other C-level executive 5%
Board member 3%
Figure 16. Company revenues
29%
21%
19%
18%
14%
$500 million – $1 billion – $5 billion – $10 billion – Greater than
$999 million $4.9 billion $9.9 billion $20 billion $20 billion
Managing talent in a turbulent economy – July 2009 18

20. The survey was well balanced geographically, with 37% of Figure 18. Company industries
participants located in the Americas, 33% in Europe, the
Other
Middle East and Africa, and 30% in the Asia Pacific region 17% Consumer/
(Figure 17). Industrial
Products
28%
A wide range of industries were represented, including
Consumer/Industrial Products (28%), Financial Services Energy/
Utilities
(22%), Technology/Media/Telecom (14%), Life Sciences/ 9%
Health Care (10%), Energy/Utilities (9%) (Figure 18).
The fourth edition of Deloitte’s longitudinal Life Sciences/
Health Care
survey will be published in October. Deloitte also 10%
plans to publish a fifth edition in January 2010
Financial
in order to complete a year-long study designed
Services
to track talent trends and attitudes through the Technology/Media/ 22%
depth of the recession and into the first hints of Telecom
14%
economic recovery.
Figure 17. Respondents by region
Americas Europe/Middle East/Africa Asia Pacific
37% 33% 30%
Managing talent in a turbulent economy – July 2009 19

21. Contacts
Global Human Capital Human Capital–Asia Pacific Human Capital–EMEA Petr Kymlicka
Dr. Sabri Challah* Richard Kleinert Brett C. Walsh National Practice Leader
Global Practice Leader Regional Practice Leader Regional Practice Leader Human Capital
Human Capital Human Capital Human Capital Deloitte Advisory s.r.o.
Deloitte MCS Ltd. Deloitte Consulting LLP Deloitte MCS Limited Central Europe
United Kingdom United States United Kingdom + 420 2 246042260
+44 20 7303 6286 +1 213 688 3368 + 44 20 7007 2985 pkymlicka@deloittece.com
schallah@deloitte.co.uk rkleinert@deloitte.com bcwalsh@deloitte.co.uk
Gilbert Renel*
Jeff Schwartz* Lisa Barry* Dr. Udo Bohdal* National Practice Leader
Global Practice Leader National Practice Leader National Practice Leader Human Capital
Organization and Change Human Capital Human Capital Deloitte S.A.
Deloitte Consulting LLP Deloitte Consulting Deloitte Consulting GmbH Luxembourg
United States Australia Germany +35 24 5145 2544
+1 703 251 1501 +61 3 9208 7248 +49 69 97137 350 grenel@deloitte.lu
jeffschwartz@deloitte.com lisabarry@deloitte.com.au ubohdal@deloitte.de
Ardie van Berkel
Tim Phoenix* Kenji Hamada Gert De Beer National Practice Leader
Global Practice Leader National Practice Leader National Practice Leader Human Capital
Total Rewards Human Capital Human Capital Deloitte Consulting B.V.
Deloitte Consulting LLP Tohmatsu Consulting Co., Ltd. Deloitte Consulting The Netherlands
United States Japan South Africa +31653733271
+1 512 226 4272 +81 3 4218 7504 +27 11 806 5995 AvanBerkel@deloitte.nl
tphoenix@deloitte.com kehamada@tohmatsu.co.jp gedebeer@deloitte.co.za
David Yana
Margot Thom* Byung Jeon Kim Enrique de la Villa National Practice Leader
Global Practice Leader National Practice Leader National Practice Leader Human Capital
HR Transformation Human Capital Human Capital Deloitte Consulting
Deloitte Inc. Deloitte Consulting Korea Deloitte S.L. France
Canada Korea Spain +33 1 58 37 96 04
+1 416 874 3198 +82 2 6676 3830 +34 9151 45000 dyana@deloitte.fr
mathom@deloitte.ca bjkim@deloitte.com edelavilla@deloitte.es
Alexander Zabuzov*
Human Capital–Americas P. Thiruvengadam Rolf Driesen National Practice Leader
Michael Fucci National Practice Leader National Practice Leader Human Capital
National Practice Leader Human Capital Human Capital Deloitte CIS
Human Capital Deloitte Touche Tohmatsu Deloitte Consulting Russia
Deloitte Consulting LLP India Pvt. Ltd. Belgium +7 495 787 0600
Americas and United States India +32 2 749 57 21 azabuzov@deloitte.ru
+1 973 602 6870 +91 80 6627 6108 rodriesen@deloitte.com
mfucci@deloitte.com pthiruvengadam@deloitte.com
Christian Havranek*
Margot Thom* Hugo Walkinshaw National Practice Leader
National Practice Leader Practice Leader Human Capital
Human Capital Human Capital Deloitte Consulting
Deloitte Inc. Deloitte Consulting Singapore Austria
Canada Pte. Ltd. +43 1 537 00 2600
+1 416 874 3198 Singapore and South East Asia chavranek@deloitte.com
mathom@deloitte.ca +65 6232 7112
hwalkinshaw@deloitte.com Feargus Mitchell
Vicente Picarelli National Practice Leader
Regional Practice Leader Jungle Wong Human Capital
Human Capital National Practice Leader Deloitte MCS Limited
Deloitte Consulting Human Capital United Kingdom
Latin America and Caribbean Deloitte Touche Tohmatsu +44 20 7007 3698
+55 11 5186 1043 CPA Ltd. fmitchell@deloitte.co.uk
vpicarelli@deloitte.com China
+86 10 8520 7807
junglewong@deloitte.com.cn
*Member of Deloitte’s Global Talent Steering Group
Managing talent in a turbulent economy – July 2009 20

22. Global Talent Steering Global Talent Steering Global Mobility Talent and Risk
Group–Americas Group–Asia Pacific Gardiner Hempel Michael Fuchs
Robin Erickson Satoshi Ota Global Mobility Transformation Human Capital
Human Capital Human Capital Leader, Global Employer Deloitte Consulting LLP
Deloitte Consulting LLP Deloitte Tohmatsu Consulting Services United States
United States Co., Ltd. Deloitte Tax LLP +1 212 618 4370
+1 312 486 5368 Japan United States mfuchs@deloitte.com
rerickson@deloitte.com +81 3 4218 7439 +1 212 436 2294
sota@deloitte.com ghempel@deloitte.com Timothy Lupfer
Marc Kaplan Human Capital
Human Capital Global Talent Steering Andrew Hodge Deloitte Consulting LLP
Deloitte Consulting LLP Group–EMEA UK Practice Leader United States
United States Dr. Eddie Barrett Global Employer Services +1 212 618 4523
+1 212 618 4421 Human Capital Deloitte & Touche LLP tlupfer@deloitte.com
mkaplan@deloitte.com Deloitte MCS Ltd. United Kingdom
United Kingdom +44 207 007 2555 Workplace Transformation
Alice Kwan +44 7789 006 243 ahodge@deloitte.co.uk George Bouri
Human Capital edbarrett@deloitte.co.uk National Practice Leader
Deloitte Consulting LLP Anne Shih Capital and Real Estate
United States David Conradie Deputy Managing Partner Transformation
+1 212 618 4504 Human Capital Global Employer Services Deloitte Consulting LLP
akwan@deloitte.com Deloitte Consulting (Pty) Ltd. Deloitte Touche Tohmatsu United States
South Africa Hong Kong +1 973 602 5322
Andrew Liakopoulos +27 11 517 4207 +852 2852 1652 gbouri@deloitte.com
Human Capital dconradie@deloitte.co.za annshih@deloitte.com.hk
Deloitte Consulting LLP Martin Laws
United States Kees Flink Lead Partner
+1 312 486 2777 Human Capital Real Estate Solutions
aliakopoulos@deloitte.com Deloitte Consulting B.V. Deloitte & Touche LLP
The Netherlands United Kingdom
David Rizzo +31612344741 +44 207 007 7919
Human Capital kflink@deloitte.nl mlaws@deloitte.co.uk
Deloitte Consulting LLP
United States Anne-Marie Malley
+1 973 602 5348 Human Capital
darizzo@deloitte.com Deloitte MCS Ltd.
United Kingdom
Christie Smith +44 207 007 8075
Human Capital amalley@deloitte.co.uk
Deloitte Consulting LLP
United States Gabi Savini
+1 973 602 5430 Human Capital
christiesmith@deloitte.com Deloitte Consulting (Pty) Ltd.
South Africa
Heather Stockton +27 11 517 4274
Human Capital gsavini@deloitte.co.za
Deloitte Inc.
Canada
+1 416 601 6483
hstockton@deloitte.ca
Gregory Stoskopf
Human Capital
Deloitte Consulting LLP
United States
+1 212 618 4627
gstoskopf@deloitte.com
Managing talent in a turbulent economy – July 2009 21

23. About the survey
This survey—the third in a five-part longitudinal study—was conducted for Deloitte by
Forbes Insights. This third report features results from a May 2009 survey that polled 319
senior business leaders and human resource executives at large businesses worldwide in
the Americas, Asia/Pacific, and Europe/Middle East/Africa. A more detailed demographic
profile about the respondents can be found at the end of this report.
This publication contains general information only and is based on the experiences and research of Deloitte practitioners. Deloitte is not,
by means of this publication, rendering business, financial, investment, or other professional advice or services. This publication is not a
substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business.
Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte,
its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this publication.
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