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Published on April 3, 2008

"Even more alarming, 33 per cent of Asian organisations (compared to 15 per cent globally) reported that they were freezing salaries for all employees," said Charlotte Park, managing director of reward information services in Asia for Hay Group.

"Short of lay-offs or salary cuts, this is as serious as you can get in terms of sending out distress signals," she said.

The results go against the finding that most companies in Asia have not yet fully felt the impact of the current economic events with only 8 per cent of them not confident of hitting their business targets, compared to 16 per cent globally, the international consulting firm said.

The study, covering 1,003 companies in 80 countries, found that 81 per cent of organisations would be freezing or decreasing staffing levels in the near future.

However, when companies were asked about their primary concerns regarding engaging and retaining key employees during challenging economic periods, they identified retaining and motivating their key contributors as their top concern.

About 48 per cent of companies indicated they had either made changes or were making changes to their retention programmes for high-performers.

"An analysis of the forecast for next quarter, coupled with the impact of this report, could be the catalyst for much more serious economic measures," Park said.

The Nation