Nearly half of firms in Singapore plan to cut hirings, but hardly any lay-offs reported: poll

Singapore

WHILE jobs so far are not a big casualty of the Coronavirus pandemic, with hardly any lay-offs reported, close to half of the employers polled in a survey in the first half of March planned to reduce spending on hirings this year.

Only one per cent of the employers had retrenchments in mind, according to management consulting firm Mercer's Pay and Bonus Pulse Survey done in March 9 to 15 which covered 232 responses from 12 industries in Singapore. There were indications that firms were starting to heed the plea to protect jobs and make the most of the government's multi-billion-dollar support package to cope with the fallout of the Covid-19 outbreak.

Some 12 per cent of the respondents were stepping up expenditure on training and development for workers, while 13 per cent were boosting work-life balance programmes to put in place flexible and adaptive work arrangements.

BT understands that in the luxury watch sector, while the Swatch group has trimmed a few jobs in Singapore, most of the Swiss watch brands have not let go of any staff here, though there may be a freeze on hiring.

Local retail chain The Hour Glass, known to provide life-long employment for its employees, told staff this week that they would be no lay-offs or pay cuts at least for now. Its sales staff are now split into working every other two days to meet the social distancing requirement, their leave entitlements unaffected.

According to the Mercer survey, 47 per cent of the firms are likely to cut recruitment budgets in 2020. Over half - 51 per cent - said they would only hire for replacement, while another 22 per cent are thinking of imposing a freeze on hiring.

Some 14 per cent were still planning to expand hirings, according to the survey. "With the impact of Covid-19 outbreak on the economy, it is not surprising that manpower costs can be a key target for cuts when companies are heading into a downturn," says Kulapalee Tobing, Mercer Singapore's Career Products Leader.

"Our survey has shown that while recruitment budgets are set to reduce, companies remain committed to protecting the livelihood of their employees," she noted. Ms Tobing said this is a reflection of the government's "stringent standards for responsible retrenchment" and the impact of its job support measures.

Only 3.0 per cent of the employers have cut pay, while 5.0 per cent were mulling over it. But one in five of the firms - 22 per cent - could go for a cut in salary increments and 11 per cent have already gone ahead with it.

Real estate, construction and engineering sectors - the hardest hit by the fallout of Covid-19 - saw the deepest cut in salary increments - by 0.8 per cent, from an average of 4.1 to 3.3 per cent. This is followed by the transportation equipment (0.5 per cent) and retail and wholesale (0.4 per cent) and logistics (0.4 per cent) sectors.

More than half - 59 per cent - of the firms have already dished out salary increments by the time of the survey. Of the remaining who have not, 4.0 per cent were going to delay the increments while 4.0 per cent were still considering; 7.0 per cent per cent have decided to freeze pay.

The rest of the firms polled were adopting a wait-and-see approach as they have payout cycles later in the year. "Given the fluidity of the Covid-19 outbreak, it is not surprising that most companies are adopting a wait-and-see approach for any future salary and bonus payouts," Ms Tobing said. "Any escalation of the situation could further impact business decisions and dampen the pay and reward of employees, especially across sectors that are worst hit by the outbreak."

The survey showed that 78 per cent of the firms have already paid out variable bonus, with only 11 per cent paying below the average variable bonus of 14.5 to 15.8 per cent.

The retail and whole sector made the biggest cut in variable bonus, from 9.5 to 8.0 per cent.