Source: Media Outreach
4% of companies report layoffs, while another 21% actively considering such actions.
20.4% of companies are delaying or cancelling salary increases for employees.
30% of companies report hiring freezes.
SINGAPORE – Media OutReach – 29 April 2020 – A new pulse survey from Aon plc (NYSE: AON), a leading global professional services firm providing a broad range of risk, retirement and health solutions, shows how companies in Singapore and around the world are accelerating changes to their total rewards programmes and workforce strategies in response to the deepening humanitarian and economic impact of the COVID-19 pandemic.
Aon conducted the survey, “Adjusting Total Rewards Programs and Workforce Strategies in Response to COVID-19,” between April 7-10, 2020. This followed an initial study conducted between March 17-20, 2020.
Managing the Cost of Total Rewards Programmes
Between Aon’s March and April pulse surveys, a span of three weeks, the prevalence of companies in Singapore delaying or cancelling salary increases for employees grew from 8.2% to 20.4%. However, this trend is lower than North America, where the same figures grew from 14% to 32% and in Europe, from 17% to 35% over the same period.
The prevalence of companies in Singapore asking employees to take reduced salaries on a voluntary basis reached 10.7%. Involuntary pay reductions were also at 10.7%. Executive officers are most likely to be covered by these actions. Roughly 33% of firms cutting pay are doing so across their full workforce. Some firms reported a mix of voluntary and involuntary actions.
“As Singapore grapples with the economic impact of the COVID-19 outbreak, businesses are under tremendous pressure to manage costs while supporting their employees,” said Alexander Krasavin, partner and chief commercial officer, human capital solutions, APAC & MEA at Aon. “In coordination with the government’s efforts, the top priority for companies is surviving the pandemic with no or minimum lay-offs. Our study found that the outbreak has accelerated the future workforce strategy of companies towards work from home and flexible hours, workforce agility and a digital transformation agenda.”
While companies continue to explore ways to manage or reduce total rewards costs through changes to health and benefits plans and retirement programmes, few of them have executed cost-saving measures in these areas. Only 1% of companies have suspended employer matches, profit sharing, or other non-elective employer contributions for defined contribution retirement plans. Additionally, only 4.1% of companies have reduced paid leave benefits.
Other common actions to manage total rewards costs include reducing or eliminating spend on contractors and cancelling or postponing employee training programmes, which 59% and 42% of companies, respectively, reported.
“Among Singapore survey respondents, pay reduction starts at the top levels while protecting the rank and file as much as possible,” says Na Boon Chong, managing director and partner, human capital solutions, southeast Asia at Aon. “COVID-19, in all likelihood, will accentuate the movement towards stakeholder capitalism where employees, customers, suppliers, and community receive as much consideration as shareholders.”
Layoffs and Furloughs
While 4% of companies reported layoffs, another 21% of them are actively considering such actions. Similarly, 8% of the companies have furloughed employees and 21% are actively considering it.
The State of Hiring
Furthermore, 30% of companies now report the implementation of hiring freezes, followed by 6% with delayed hiring approaches. Another 46% of companies report very selective or cautious hiring, usually for critical roles and key replacements only.
Only 16% of companies report normal hiring plans, followed by 1% of firms with accelerated hiring. Among companies with normal or accelerated hiring, 60% provide essential products and services in the context of stay-at-home and lockdown regulations.
In contrast to the cost management actions described above, companies are moving swiftly to supplement support programmes and leave benefits for employees.
69% of companies are providing additional scheduling flexibility to employees with children.
63% of companies are providing as-needed payments or equipment purchases to assist employees with work-from-home arrangements.
30% of companies are providing temporary increases in sick leave entitlements (e.g., special “pandemic leave”).
33% of companies are allowing employees to use sick leave for COVID-19-related quarantines (in addition to what is required by law).
16% of companies are allowing employees to use sick leave to care for children when they are off from school (in addition to what is required by law).
Additional Compensation and Support for Employees
Only 12% of companies now have additional compensation programmes in place, with another 15% of firms actively considering such actions. Among companies offering additional compensation to employees in higher-risk roles, 83% identified themselves as offering essential products and services in the context of stay-at-home and circuit-breaker regulations.
When asked how the experience of responding to COVID-19 might change future workforce strategies, 56% of companies in Singapore expect their digital transformation agendas to accelerate following their initial response to COVID-19. Eighty-nine percent of companies anticipate their exploration of different working models, such as expanded working from home and increased flexible hours approaches, will accelerate as well.
– Published and distributed with permission of Media-Outreach.com.