From customer-facing staff, middle managers to executives, most respondents both globally and in India believe that adjustments to rewards and benefits as a result of COVID-19 will likely affect employees throughout the organisation, according to a survey by Korn Ferry (NYSE: KFY). 22 percent of organisations surveyed in APAC expect a serious impact on their business, where the company’s annual business revenue is expected to decline by more than 30 percent, with around half of these respondents expecting that the impact will be at least 50 percent.
In India, the most commonly implemented measures for rewards and benefits are on promotion and salary hike, with 23 percent organizations suspending the promotion increases and 18 percent organizations deferring and/or delaying salary increases. 36 percent of organizations have implemented or are considering implementing a salary freeze to manage costs. Given the government’s extensive requests on avoiding laying-off employees, the majority of companies have not implemented or are not currently considering permanent staff layoff/redundancies (84 percent) or temporary layoff/furlough (83 percent without government subsidy support and 91 percent leveraging government subsidy).
Other India findings from the survey include:
Commenting on the survey, Mr. Roopank Chaudhary, Client Partner, Korn Ferry India said, “Given the current circumstances and uncertainties on the recovery for market conditions, business leaders are trying everything to survive this storm and manage their costs. Among the dozens of ways organisations are taking out labour costs are layoffs, hiring freezes, reduced hours, less reliance on contractors, reducing overtime, delaying bonuses or merit increases, suspending certain benefits like retirement savings/capital accumulation programs, and many others.”
“Communicative and action-oriented leadership is of utmost necessity during this period to make people feel secure and taken care of, and helping the workforce remain focused on preserving operations as best as possible as the outbreak spreads. Managing the challenges of this global pandemic will require innovation and agility amidst unprecedented uncertainty and business leaders will need to balance between implementing short-term measures to address immediate impact and keeping a long-term view on future growth.” he further added.
Global, APAC, ASEAN & ANZ findings from the survey include:
Korn Ferry Recommendations:
As organisations are facing decisions with respect to rewards, Korn Ferry recommends for organisations to consider the following six principles to alleviate the repercussion of the current situation:
In India, the most commonly implemented measures for rewards and benefits are on promotion and salary hike, with 23 percent organizations suspending the promotion increases and 18 percent organizations deferring and/or delaying salary increases. 36 percent of organizations have implemented or are considering implementing a salary freeze to manage costs. Given the government’s extensive requests on avoiding laying-off employees, the majority of companies have not implemented or are not currently considering permanent staff layoff/redundancies (84 percent) or temporary layoff/furlough (83 percent without government subsidy support and 91 percent leveraging government subsidy).
Other India findings from the survey include:
- 51 percent of the companies in India will prioritize employee engagement.
- 54 percent of companies in India will encourage more open, transparent and frequent/always- on two-way employee communication.
- Beyond the pandemic, 55 percent of respondents in India indicated that they will continue to operate more virtually, with 63 percent said that they will be more disciplined about cost management moving forward.
- 55 percent companies said they will operate with a more flexible approach to managing people costs
Commenting on the survey, Mr. Roopank Chaudhary, Client Partner, Korn Ferry India said, “Given the current circumstances and uncertainties on the recovery for market conditions, business leaders are trying everything to survive this storm and manage their costs. Among the dozens of ways organisations are taking out labour costs are layoffs, hiring freezes, reduced hours, less reliance on contractors, reducing overtime, delaying bonuses or merit increases, suspending certain benefits like retirement savings/capital accumulation programs, and many others.”
“Communicative and action-oriented leadership is of utmost necessity during this period to make people feel secure and taken care of, and helping the workforce remain focused on preserving operations as best as possible as the outbreak spreads. Managing the challenges of this global pandemic will require innovation and agility amidst unprecedented uncertainty and business leaders will need to balance between implementing short-term measures to address immediate impact and keeping a long-term view on future growth.” he further added.
Global, APAC, ASEAN & ANZ findings from the survey include:
| % | Global | APAC | ASEAN | ANZ | INDIA |
| Salary cuts effected | 15 | 14 | 11 | 19 | 14 |
| Annual salary increases cancelled/freeze | 21 | 17 | 14 | 19 | 18 |
| Annual salary increases deferred / delayed | 23 | 14 | 12 | 16 | 18 |
| Promotion increases suspended | 22 | 17 | 16 | 15 | 23 |
| Short-term incentive/annual bonus reduced, deferred or delayed | 14 | 13 | 10 | 18 | 15 |
| Temporary layoff/furlough (without government subsidy) effected or currently considering | 18 | 15 | 10 | 18 | 17 |
| Permanent staff layoffs/redundancies effected or currently considering | 23 | 21 | 14 | 33 | 16 |
Korn Ferry Recommendations:
As organisations are facing decisions with respect to rewards, Korn Ferry recommends for organisations to consider the following six principles to alleviate the repercussion of the current situation:
- Place employee well-being at the top of your priorities
- Leaders should lead by example
- Treat people like adults (share what you can as soon as you can, be honest, emphasize two-way communication)
- Take a balanced approach (especially when considering labour cost reductions)
- Remember this situation is temporary; avoid drastic near-term actions that could weaken prospects for bouncing back
- Tailor actions to fit individual company/industry/regional circumstances; “best practices” are what is best for you
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