By Chuang Peck Ming

More employers in Singapore are talking of a hiring freeze in the wake of the US financial crisis, but few have job cuts in mind - at least for now, according to Yvonne Cox, the local managing director of human resource consultancy firm Watson Wyatt.

'We don't have any client at this moment who tell us they are going to make huge and drastic cuts in employees,' she said. 'There certainly will be a number of US- and European-based MNCs that are impacted by overall headcount reductions globally. So maybe that will be felt in all markets, presumably.'

Watson Wyatt, listed on the New York Stock Exchange, is ranked the world's second-largest employee benefit consultant with US$1.4 billion in revenues last year. It has 107 offices in 32 countries and boasts 7,200 'associates' on its payroll.

Bosses here were already careful about taking on more staff before the dramatic events of the past two weeks, which saw bank failures and bailouts on an unprecedented scale in the US and Europe.

'We did a survey a few months ago,' Ms Cox said. 'Essentially, I would say that our clients are approaching any kind of headcount growth very, very cautiously. There's only a very small proportion that were going to grow headcount.'

There was also only a 'fairly small proportion' who indicated that they were going to downsize staff.

'Maintain' was the common answer,' she said.

Companies are not sitting still. Ms Cox said that Watson Wyatt is working with clients to boost productivity through restructuring and employee engagement.

'Employee engagement - that's an area companies cannot forget, particularly in times like these when employees are concerned, worried, nervous about their jobs and this is a time when it's very important to ensure that employees are aligned (with the company), focused on the areas important to the business as opposed to (being) distracted and worried about their jobs,' she said.

Watson Wyatt is also seeing 'continuing and even growing' demand for advice on ways to shape up a company's sales force to get maximum results in these difficult times.

'Our global head of sales effectiveness and compensation is coming to town to speak on this hot topic - it's a sign of the times,' Ms Cox said.

Then there is the talent issue. The tough situation now offers companies both a challenge to retain talent and an opportunity to recruit talent at the same time.

'One of the things you want to do in an economic downturn is to retain your key employees and ensure they will be with you for the long run, because basically they are the ones to help you weather the storm and be successful when the economic picture improves,' Ms Cox said.

So employers must be mindful of frustrated staff when they impose a freeze on hiring - as they intend to do now - because, according to her, the freeze often also applies to internal movements and promotions. Or their employees will lend themselves to poaching by others.

While the scale and speed of what happened in the US and Europe in the past fortnight - and the global stock market collapse that they led to - caught many companies off guard, Mark Birch, Watson Wyatt's local Director & Practice Leader, Insurance & Financial Services, said that they were inevitable. 'These things do tend to move in cycles. At some point in time, there's bound to be a downturn in the market.'

Added Ms Cox: 'There's been a lot of signals, at least for a year or 18 months now. Sub-prime mortgage, credit crunch - all these have been happening for quite a while. The fact is that they have been accelerating and came to a head over the last weeks to heighten the drama. But it's not as if it's brand new.'

According to the Watson Wyatt survey, companies in Singapore and the rest of the Asia-Pacific region seem more prepared for an economic downturn than those in the West.

'Eighty-four per cent of employers (in the survey) in Asia has established contingency plans, compared to 67 per cent in the US and 80 per cent in Europe,' Ms Cox said. 'So definitely there have been some thinking and planning going on - and that also applies to Singapore.'

Nearly one in three companies in the region is contemplating a wage freeze in the face of an economic slump, with the number rising to 70 per cent for Singapore. Other measures on their minds are corporate restructuring and slower pay hikes.

'Layoffs? A lot less,' Ms Cox said. 'In fact, even less in Singapore than in the Asia-Pacific in general.'

This article was first published in The Business Times on October 09, 2008.