Covid-19 has severely impacted businesses across the globe, and amid lock down, supply chains going off and customer demand dried up a number of businesses have had to undertake drastic measures including salary cuts, furloughs, as well as job cuts. The impact has been seen globally and for businesses across industries.
To understand the impact of COVID-19 on business and human capital management practices, Korn Ferry conducted a pulse survey from 15th to 24th April 2020 on almost 4,000 respondents from 99 countries. The survey has captured the measures companies are taking as the pandemic evolves.
A key finding from the survey presents a picture that organisations in India are experiencing great business impact but fewer organisations are adopting drastic people cost measures, when compared to global organisations.
Some key findings:
- 84 percent of organisations in India say they are not currently considering permanent staff layoffs or redundancies
- Only 14 percent organizations in India have implemented salary cuts
- Only 18 percent organizations have implemented salary increment freeze
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.
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, organisations have deferred and cut back on promotion increases, salary hikes.
- 23 percent organizations are suspending their promotion increases and 18 percent organizations are 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 findings from the survey, about employer actions in India:
- 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
On the survey findings, Roopank Chaudhary, Client Partner, Korn Ferry India said, “ .. 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.”
“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.
Source: Korn Ferry, Edited by HRN Research & Insights