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COVID-19 will Impact Rewards & Benefits in India negatively: Korn Ferry Survey

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:

  • 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