Concurrently, the majority of private companies surveyed (57 percent) reported being affected by reductions in their companies’ workforces as a result of the economic crisis. While most employment areas were affected, there was a particular emphasis on middle management and skilled labor. In contrast, of those surveyed, 40 percent reported no layoffs or reductions as a result of strain economic conditions.
“We’re seeing the leading private companies looking to hire new workers or increase the compensation of existing employees, reinforcing Trendsetter Barometer data that CEOs are planning for an upturn,” says Ken Esch, partner with PricewaterhouseCoopers Private Company Services practice. “While many are simply looking to fill skills gaps or retain their qualified workforce, this is a clear signal that CEOs believe the tide is turning.”
Despite workforce reductions, 61 percent of Trendsetter CEO’s believe their companies’ current workforce is well aligned to business objectives that must be met over the next 12-24 months. Thirty-four percent believe they are only somewhat aligned, and only two percent believe their company is not well aligned. Sixty-one percent believes their organization has the right skills at the management level to effectively lead their company over the next 12-24 months. However, 35 percent believe they will have skill gaps.
Filling in Skills Gaps
Interestingly, among the 35 percent of leading private companies that believe they will have to fill in some skills gaps, 82 percent are planning to fill the gap by hiring new talent. Additionally, 68 percent plan to train/develop existing talent, 32 percent plan to redeploy talent and 22 percent plan to use contractors as means to fill skills gaps at their companies.
“Because of recent layoffs, there’s talent in the marketplace that may not have been available a few years ago at current salary levels. Private companies should be looking for catalyst hires – employees who will join the business, share their experience and move the company forward at a faster pace than otherwise would have been possible,” adds Esch.
Investment in Talent Management Programs and ROI
Over the next 12 months, 39 percent of private company CEOs also plan to invest or are currently investing in talent management programs, while approximately 54 percent reported they have no plans to invest. The goal of the talent management programs as highlighted by 88 percent of those currently investing or planning to invest in these programs, is to better capitalize on existing workforces. One-in-five (20 percent) reported their goal is to better position their company from a recruiting perspective as an employee of choice as the economy recovers.
“Many companies are analyzing their salary and benefit programs to attract and retain the best talent. Some are restoring salary reductions and/or benefits cut during the recession. Others are training and developing existing employees to work in other areas of the business - overall, it's important to have the right number of people and have those people in the right seats," says Esch.
Only 8 percent of private companies’ CEOs claim to know what return their companies are currently getting from their investment in critical talent. Overall, 67 percent do not know; creating a unique opportunity for companies to understand and communicate the cost associated with talent development.
“In a tight economy like today, businesses should take a close look at every expense to ensure the money being spent will move their business forward. The same is true for new hires; it’s imperative to decide what a new employee’s impact on the business will be and map that back to how they’re being compensated,” adds Esch.
PricewaterhouseCoopers works with a majority of the leading private companies in the U.S. Our 2,000 private company individuals focus on understanding the strategy and business objectives of private companies and their owners, working together to add value while reducing risk. Our professionals are provided with cross training to enable them to connect the dots across a number of private company issues such as compliance, controls, access to cash flow, expansion, exit strategies, succession, wealth management and the many areas that can help build or diminish long term success and value. For more information about PwC's private companies services please visit www.pwc.com/pcs.
PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 163,000 people in 151 countries across out network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
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