INTOUCH: Business Behaviour Remains Hopeful

Pessimistic sentiment runs high in the findings of the latest Sheffield Salary Review Survey, but that is not flowing through to dramatic cuts in pay, staff numbers or revenue expectations.
The survey, which was conducted over November and December last year, questioned 182 organisations in public and private sectors. It reveals that 76 percent expect the economy to worsen in the next year.
“Only once in the 18-year history of this survey, have we seen anything close to that level of pessimism,” says Sheffield reward manager Jarrod Moyle. “Three years ago, in 2006, 66 percent of organisations expected the economy to worsen, with much of that pessimism unfounded. In early 1998, in the midst of the Asian economic crisis, only 36 percent were expecting things to get worse.”
However, surprising finding of the survey was that despite the pessimism, only 29 percent believe their sales revenue will decrease during 2009. The rest expect sales levels to stay the same, or increase – in about equal proportions. Removing the public sector response from this, the results change little, says Moyle.
Another unexpected result was the number of organisations still planning salary increases during 2009 – 82 percent predict increases for senior management pay, and 84 percent predict increases for middle managers and other staff.
“The predicted increases are lower than the 4-4.5 percent we have seen over the past four years, but they are still within what we would see as normal range of 3-3.5 percent.”
There is more good news in the survey, with the majority of respondents saying they don’t plan to cut staff this year.
Though 30 percent do expect to reduce staff numbers, 53 percent plan no change and 17 percent plan to increase staff.
“It’s clear that staff retention is important over the next year,” says Moyle. “Organisations seem to accept the economy will get worse, but are maintaining focus on the upturn.”