More than 30% of organisations are freezing or considering freezing base salaries as a direct result of recent economic conditions.
These are the findings of global management consultancy Hay Group, which, even more alarmingly, reported that 15% of organisations globally claimed they were freezing salaries for all employees.
The study, which spanned 1,003 companies in 80 countries, also showed that whilst a majority of companies have not fully felt the impact of current economic events, 16% expect business results to be significantly worse than budgeted levels.
Tom McMullen, vice president at Hay Group and one of the leaders of the study, said: "Short of layoffs or salary cuts, this is as serious as you can get in terms of sending out distress signals."
In addition, the study found that 20% of organisations would be freezing or decreasing staffing levels in the near future.
Yet when companies were asked about their primary concerns regarding engaging and retaining key employees during challenging economic periods, they identified retaining and motivating key contributors as their number one concern, with 38% of companies indicating that they have either made changes or are making changes to their high performer retention programmes.
"An analysis of the forecast for next quarter, coupled with the impact of this report, could be the catalyst for much more serious economic measures," said McMullen.
Benefits are also being scrutinised, especially healthcare – 27% reported they have either made changes or are making changes to healthcare benefits; plus 21% of respondents indicated that they either have changes implemented or planned for retirement/pension benefits, whilst 38% of respondents indicated the same for training and development programmes.