Singapore - In addition to salary freezes, companies have taken other measures to contain costs, such as downgrading airline class for business travel.
In a Hewitt Compensation Watch Survey which polled 53 participants across all general industries, 37% of companies have implemented a recruitment freeze, and another 33% say they have plans to do so in the coming three months. Although 66% of overall companies reported no layoffs, the service sector saw 18.2% looking to retrench staff.
Salaries have also taken a hit, as 37% of companies have already undertaken a salary freeze for all employees, and 39% anticipate this action to be taken in the next three months. Other actions taken include reducing year end variable bonus payouts and overtime salary control.
For example, 75% of companies in the chemical sector report reducing year end bonuses. In addition, the 2009 projected salary increment of 5.4% which was derived from survey results between June to September 2008 dropped to 2.1% in March.
Retention bonuses, training expenses and business travel budgets have also been reduced, as business travel expenses for 2009 have fallen by 21% since 2008 and companies are downgrading the class of airlines.
However, while companies are cutting costs across the board, Hewitt Associates’ senior consultant Samir Bedi says organisations should ensure that the actions they are taking "will not have a direct impact on revenues or client satisfaction".
