Asian employers retaining workers during downturn

"We know from previous recessions and economic slowdowns that those companies that have contingency plans in place will be in a much better position to weather the storm and bounce back when the economy improves," said Laura Sejen, a director of Watson Wyatt Worldwide, a global management consulting company.

Sejen told a news conference that if economic conditions continue to weaken, many companies will evaluate their staffing levels, pay programs and overall organizational structures.

She warned that layoffs lead to a loss of a company's institutional memory, and alternative approaches, like cutting the work week, could be a better option.

Watson Wyatt said it surveyed 1,380 employers and found 61 percent of the 450 Asian employers ranked organizational restructuring and a hiring freeze as their first two contingency plans, with slowing the rate of salary increases ranked third, by 46 percent.

Meanwhile, some 52 percent of the U.S. employers surveyed ranked layoffs as the top choice to cope with economic difficulties, followed by 46 percent listing organizational restructuring and 39 percent opting for a hiring freeze.

A third of U.S. companies surveyed for the study, to be released later this year, said they have no formal contingency plans, Sejen added.

Rachelle Arcebal, another Watson Wyatt director, said many Asian companies learned from the Asian financial crisis in the late 1990s that knee-jerk reactions like layoffs mean they will scramble and compete to get talent when the economy recovers.

"With attraction and retention challenges in Asia Pacific surpassing every other region covered in the survey, companies will naturally explore other options before letting go of their employees particularly their top performers and those possessing skills critical to their business," Arcebal said.

The margin of error for the study was not immediately available.