Employees question sustainability of recession driven "lean & mean" corporate model, concludes Towers Perrin analysis

    Employee Engagement and Morale Remain High Despite Cost Cutting &
    Headcount Reduction Measures, Yet Employees Perceive Organizations as
    Less Efficient

    TORONTO, Sept. 10 /CNW/ - While many organizations took aggressive action
to reduce costs and improve efficiency during the recession, these gains may
be at risk, according to Towers Perrin's Workplace Watch, a quarterly review
of employee opinions across large global organizations. A first quarter spike
in positive perceptions of corporate efficiency dropped noticeably in the
second quarter: Only 58% of the more than 610,000 employee responses included
in the second quarter's analysis agreed that their company's current structure
facilitates efficient operations, a decline of 16 percentage points in just
three months. Furthermore, the percentage of those who believe their
organization continually works to ensure processes are as efficient as
possible dropped to 73% from a high of 81% just last quarter.
    "On the advent of Labour Day 2009, with encouraging signs of improved
economic prospects, companies face a stark reality check," said Kevin
Aselstine, Managing Principal at Towers Perrin in Toronto. "To what extent
will cost cutting and restructuring measures improve long-term efficiency,
versus being a panicked reaction to financial pressures? Have companies lost a
real opportunity to make meaningful long-term improvements in structure and
operations? Based on views from the people doing the work, the jury is still

    Employees think their organizations efficiency has slackened

    Towers Perrin analysis indicates that while the majority of employees
were initially reassured that budget and headcount cuts supported their
organizations efficiency, as working life 'normality' resumes, employees have
begun to perceive that efficiency has actually slackened. In the first quarter
of 2009, 74% of employees believed their organization's structure facilitated
efficient operations compared to only 58% in the second quarter.
    Towers Perrin points to three factors that may be at play in terms of
employees' perceptions of their organization's efficiency: Firstly, companies
have eased off on the frequency and intensity of messages about their
efficiency. Secondly, product and service demand is still inhibited by reduced
purchasing power, so even though there are fewer employees, they may feel
underutilized in many organizations. And thirdly, companies often cut costs
and layers of management without aligning the underlying organization
structure or fixing how work gets done and how decisions are made, so
inefficiencies start to creep back into the system.

    Employee morale and engagement remains high

    This may also explain, in part, one of the more surprising findings from
the second quarter analysis: that employees are not feeling undue job-related
stress right now and that employee engagement remains steady. Just under
two-thirds (63%) reported they could balance work and personal
responsibilities, up from 55% in the first quarter of 2009, which was the
lowest percentage recorded for this item since the end of 2007. Furthermore,
despite extensive cost reduction, restructuring and headcount reduction
measures, employee engagement levels have held steady. On average over the
last four quarters: 87% of employees fully support the values for which their
company stands; 84% feel proud to be associated with their company; 88% work
beyond what is required to help their organization succeed.

    Employees have strong clarity around organizations goals and strategic

    Another factor, beyond shifts in workload, in maintaining employee morale
and engagement is greater clarity around organizational goals. This quarter's
Workforce Watch study shows 83% said they have a clear understanding of their
company's goals, up dramatically from 69% in the first quarter of 2009. And
69% agree their management is providing them with a clear sense of direction.

    Fundamental questions about organizations future prospects

    Beneath the current calm, however, lie fundamental questions about the
future. While the analysis shows that employee engagement levels have held
steady through the most recent quarter, perceptions that companies aren't
sustaining efficiency could change that scenario as the economy turns around.
In addition, organizations could face increased swings in employee turnover as
the job market opens up again. While just 12% of employees in this quarter's
analysis said they were seriously considering leaving their company in spite
of the difficult job market, 21% agreed it would not take a lot to make them
look for a job elsewhere.
    "While some of our Workplace Watch second quarter findings are
encouraging - there are significant areas of concern for the longer-term
health of organizations," concludes Aselstine. How much muscle has the
organization lost? Are short-term efficiency gains sustainable? Is there a
risk that strong performers will leave when the economy picks up again? These
are real concerns that should be on the minds of business leaders."


    The second quarterly edition of Towers Perrin's Workplace Watch study
compares data from April through June 2009 with the six preceding quarters to
evaluate how the economic downturn is affecting employees' attitudes about
work and levels of engagement. The second quarter 2009 data cover more than
610,000 employees working in 69 companies worldwide.

    About Towers Perrin

    Towers Perrin is a global professional services firm that helps
organizations improve performance through effective people, risk and financial
management. The firm provides innovative solutions in the areas of human
capital strategy, program design and management, and in the areas of risk and
capital management, insurance and reinsurance intermediary services, and
actuarial consulting. Towers Perrin has offices and alliance partners in the
United States, Canada, Europe, Asia, Latin America, South Africa, Australia,
New Zealand and the Middle East. More information about Towers Perrin is
available at www.towersperrin.com.

For further information:

For further information: Towers Perrin, Emma Capombassis,
emma.capombassis@ketchum.com, (416) 355-7408; Or Laura Snell,
laura.snell@ketchum.com, (416) 355-7406

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