SALARY INCREASE COST-CONTAINMENT MEASURES SURVEY TOWERS PERRIN
Asia Pacific - While cost-containment measures are still taking place, Kevin Ong, consulting leader of Towers Perrin Singapore believes companies are more prepared this time compared to the previous economic crisis.
In the Asia Pacific Compensation Planning Pulse survey from Towers Perrin that was conducted in April, an overwhelming majority of companies in the region report that they have completed or have planned a recruitment freeze or reduction. They also report a reduction in training and/or employee events.
A quarter of the 1,172 companies polled have completed or planned headcount reductions, a further 11% are still considering doing so for the next two years. Ong feels the 11% of companies that are considering such an action are those who might not have been immediately hit financially. "Some might still go ahead with the planned headcount reduction until there is evidence of sustained recovery."
Fifty percent of respondents say they have frozen, reduced or delayed salary increases. Ong believes the percentage is sector dependent. While export-oriented sectors like finance and manufacturing are adversely impacted, "industries that have a largely domestic market, like public transportation, appear to be less impacted".
"Generally, pay cuts have been restricted to senior management level, and in some cases middle management level. Pay freezes are more commonly implemented across all levels of the organisation," says Ong.
With the recession keeping employees on their toes to sustain their jobs, voluntary turnover is also expected to fall almost 30% this year, as compared to 2008. Contrastingly, involuntary turnover is expected to be up by over 30%.
Communication is key, says Ong. "Employees appreciate open and frequent communication from company leadership. Companies would do well to involve and engage their employees, especially the group targeted for retention, in initiatives that help companies tide over this period."
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