Asia Pacific – Companies in Asia may be taking cost-containment measures, but they are not overlooking the importance of retaining talent and are reviewing their short and long-term incentive goals.
In a Towers Perrin survey which polled 1,161 respondents from 13 countries, 40% of companies have already reduced or frozen hiring in response to the financial downturn. It also found that 38% of companies cutting back on travel and entertainment budgets and scaling back on employee events (30%).
However, only 9% of respondents admitted to reducing headcount, while an additional 10% have plans to reduce and 15% are considering it. And yet, over 75% of companies say they are also not considering reductions in fixed pay, providing lump sums instead of merit increases, or unpaid leave.
Interestingly, more than 40% of respondents reported offering retention cash or stock awards to top-performing employees and employees in critical roles in order to retain them. Many companies are looking at their short and long-term incentive goals, as over 60% of respondents reported an impact on their short-term incentive goal setting approach, while 25% reported an impact on their long-term approach.
While performance bonuses are expected to be lower for most companies, less than 5% of companies say they will not be paying bonuses in 2009. However, about 30% of respondents said their values for their long-term incentives will be lower this year compared to 2008.
Despite concern with underwater stock options, only 6% of companies have reset performance goals for outstanding long-term incentive awards or are planning to do so in the future (7.7%).
“Closing the engagement gap is more crucial than ever because companies are trying to do more with less as they cut their budgets and sometimes their staff to adjust to the global downturn,” says Brent Ruge, group leader of Towers Perrin-ISR Singapore. In a recession with inevitable cost-containment measures, managers must do as much as possible to allay fears of retrenchment by being transparent, adds Ruge.
“If everyone is aligned with a common purpose and has knowledge of the results of their efforts, it could pull them closer together and away from the depressing effects of retrenchments.”
| Actions companies take to retain high-performing employees |
| Retention awards in cash | 23% |
| Retention awards in stocks | 20% |
| Salary increases | 37% |
| Higher bonus payouts | 34% |
| Other | 22% |
Source: Compensation in Crisis Pulse Survey (Asia-Pacific)
Stress levels go through the roof
Singapore – As the downturn plays a toll on businesses, cost-containment measures and ineffective management practices have led to increased stress levels in the workplace.
In a recent Robert Half survey which polled 202 human resources and finance and accounting managers in Singapore, 59% of respondents reported that bonuses have been cut or lowered, making this the highest across 20 countries. Other measures taken by companies in Singapore to reduce costs include a hiring freeze (55%), cuts to employee benefits (36%) and staff layoffs (31%).
But as companies reduce costs, 72% of respondents said their companies do not offer shorter work-weeks, and 55% felt their companies will not even consider that option as an alternative work arrangement.
As cost-cutting measures increase and there is a lack of adequate measures to help employees cope with heavier workloads, there is a heightened level of stress in the workplace. Sixty-nine percent of respondents expected workplace stress to increase this year, second to Japan globally. According to the respondents, the top three effects of increased stress are lower staff morale (64%), lower work and service quality (37%) and a larger number of applied sick days (37%).
Increased work stress also affects employees’ personal lives, with 26% of respondents reported checking their work emails for 30 to 44 minutes a day. Also, employees tend to report to work despite sick for fear of repercussion. Sixty-one percent of respondents cited fear of falling behind their workloads as their biggest concern, while 52% feared that too many sick days could count against them and 50% did not want to be perceived negatively by superiors and peers.
Tim Hird, managing director of Robert Half Singapore, says organisations need to understand the impact of ineffective management practices and their effects on staff welfare and businesses. “Employees, who are understandably jittery about job prospects in this current climate, should also try to strike a balance between work effectiveness and avoiding a burnout which could jeopardise work quality. Clearly, the way forward would be to establish honest and open communication between companies and employees to work together through the downturn,” says Hird.
| Ways employee morale is affected most positively |
| Open, honest communication with their managers | 34% |
| Manageable staff workloads | 19% |
| Monetary rewards for exceptional performance | 17% |
Source: Impact of ineffective management practices on employees during troubled times
