(From BUSINESS WIRE) -- Companies must put their people first in the recovery or risk experiencing deep talent erosion and sustained underperformance, StepStone Solutions warns businesses in a new report - Companies at the Crossroads - published today and available at www.stepstonesolutions.com/eiu. According to a worldwide survey of senior managers, sponsored by StepStone Solutions, two years of cut-backs have undermined workplace trust. Combined with increasing demand for executive talent and a sharp drop in graduate recruitment, the survey has found that companies without the right talent strategies risk developing a major skills shortage just when they need employees' energy and commitment the most. The survey, undertaken in December 2009, covered over 400 senior managers primarily in major corporations in the US, Europe, and Asia-Pacific.

Matthew Parker, Group Managing Director at StepStone Solutions, said: "Right now, businesses are at a crossroads when it comes to their talent. They can either take steps to create, maintain and develop global talent pools, or ignore the warning signs from this survey and suffer a gradual talent erosion at all levels that will inevitably lead to underperformance."

According to Companies at the Crossroads, researched and written by the Economist Intelligence Unit, nearly one third (29%) of the business executives surveyed said employee engagement is low and they expect to lose key people as talent demand grows. At the same time, graduate recruitment has also been dramatically affected, with just six per cent of respondents saying graduate recruitment would be a focus for their organisation in 2010 - compared with 50% of respondents in 2009. Meanwhile, the survey has found talent has moved fast up the boardroom agenda. The availability of talent has risen to overall third as a driver of growth (voiced by 46% of respondents), sitting behind only economic recovery and credit availability.

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