In times when companies are laying off employees and reducing salaries, Asian Paints has said that it will go ahead with annual increments. In an attempt to boost employee morale and strengthen the bond with its employees, the company has decided to not lay off any employees and give them their annual salary raise.
Citing that layoffs in such a crisis is not a part of “Asian Paints’ culture,” a company spokesperson said, “We will go ahead with the increments for this year across the board to boost employee morale during these times. Despite the challenging environment due to COVID-19, we haven’t laid off people. Firing people is not the Asian Paints culture.”
In an interview to CNBC TV-18, company Managing Director and CEO Amit Syngle said, “I see this as a big opportunity to step in and interact with every single employee and assuage their concerns in an uncertain marketplace. We are not in the hire and fire business and as a mature brand have reassured employees that we all are together in this.
“We have been debt free for years and are quite comfortably placed even if the uncertainty goes on for the next four or five months. The company had announced a huge dividend payout in March and shareholder return is our top priority,” said Syngle.
The increase in salaries and the scope of assistance to the sales channel includes hospitalisation and insurance, full sanitisation facilities for partner stores, and direct cash support. Further the company also transferred Rs 40 crore into the accounts of its contractors.
To maintain the cash flows Asian Paints would still look to cut some costs but for that they are paying more focus in identifying other options that do not compromise employees’ well-being. The leadership is hence keeping a watch on cash flows and deferring expenses where it can.
The company has also asked for extended payment terms from its vendors to manage its working capital cycle, but has extended the concessions to dealers. In a letter to dealers last week, Asian Paints offered free sanitization of paint shops, free medical insurance of shop attendants and painters, a 45- day extension on payments due to the company and a 2% discount if payment made within 45 Days.
Interestingly, Asian Paints has also started making sanitizers to aid the nation’s fight against the virus. Expanding its product range into sanitizers would allow Asian Paints to have a greater share of the customer wallet, with a range of sanitizers for various surfaces. The staff will also be productive and engaged. It is a wise move that serves the needs of both internal and external communities.
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