COVID-19 may be taking its toll on businesses in APAC, but a majority still won't consider layoffs

COVID-19 may be taking its toll on businesses in APAC, but a majority still won't consider layoffs

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With COVID-19 taking a toll on businesses around the world, many employers are undoubtedly turning to cost-saving measures as a means to cope with the impact.

In Asia Pacific (APAC), for instance, a recent Korn Ferry survey revealed three commonly-implemented measures across industries - permanent staff layoffs and redundancies (21%), suspension of promotion increases (17%) and cancellation or freezing of annual salary increases (17%).

That said, permanent staff layoffs and redundancies are still not being considered by 79% of organisations surveyed in the region, as part of efforts to reduce costs.

Pay-cuts more common for top executives, salary freezes for the rest

When it comes to salary containment measures, salary cuts (70%) and bonus reductions (71%) are more commonly deployed for top executives, while salary freezes are most commonly adopted for the rest of the staff levels (from 58% for clerical roles, to 71% for middle-managers).

The survey also further broke down the APAC findings into two smaller regions - ASEAN, and ANZ (Australia and New Zealand), with ANZ having taken tougher measures.

For instance, just 14% of companies in ASEAN have either implemented or are considering permanent staff layoffs or redundancies, versus 33% in ANZ.

Mary Chua, Korn Ferry's APAC Rewards & Benefits Leader, said this could be attributed to differences in employment relationships, where ASEAN companies are "more paternalistic and hesitant to take tough people measures."

"Further, most economies in ASEAN have a large proportion of the lower-income group and to effect a material reduction in people costs will require a sizeable reduction in the wage bill or workforce, both of which are difficult to effect without significant impact to staff engagement and business continuity post-COVID-19."

Employers in Malaysia are feeling the greatest impact on their business

Among the APAC countries, organisations in Malaysia were found to be experiencing the greatest impact of COVID-19 on their business. In fact, a little over three in 10 (31%) of businesses are expecting their revenue in 2020 to decline by more than 30%.

At the same time, across the straits in Singapore, the most common cost-containment measures implemented in terms of benefits were related to annual salaries; 18% of respondents in the country are either cancelling or freezing pay increases, while 17% are deferring or delaying such increases.

Additionally, 18% of companies are looking to suspend promotion increases while on the other hand, with the government's support measures in helping cope with cash flow, close to nine in 10 (88%) of companies have not implemented or are not currently considering staff layoffs or redundancies.

Apart from the above, more than seven in 10 (70%) of companies in the region said they will continue with their current work arrangements even once the crisis ends, with voluntary work-from-home, social distancing, and increased safety measures at work as the top three arrangements chosen.

In fact, beyond the pandemic, 58% of respondents in APAC indicated that they will continue to operate more virtually, with 49% said that they will be more disciplined about cost management moving forward.

[ALSO READ: Headcount freezes, layoffs, pay-cuts, and more: Malaysian employers on the impact of the MCO]

Photo / 123RF

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