COVID-19: Only 1% of employers considering retrenchment

Companies in Singapore are focusing on employee training and support

COVID-19: Only 1% of employers considering retrenchment

Over half of companies (47%) in Singapore are likely to reduce spending on recruitment this year considering the COVID-19 pandemic.

More than half (51%) will only hire for replacements, while another 22% are planning a hiring freeze.

Only 1% are considering retrenchment, according to a new pulse survey by Mercer.

Instead, companies are planning to offer more training and development opportunities to employees amid the downturn:

  • 12% are planning to increase their L&D budget
  • 13% are enhancing work-life balance programs to enable flexible work arrangements

READ MORE: COVID-19: HR's main challenges revealed

The Pay and Bonus survey also looked at the impact of COVID-19 on salary increment and found that only 3% of companies have implemented a pay cut, while 5% are considering the option.

More than half (59%) of companies have already given out their salary increments to employees. Of those who have not implemented their increments, 8% have decided to delay or are considering delaying their increment cycle by three months, while 7% have indicated a salary freeze.

The remaining companies are adopting a wait and see approach as they have payout cycles later in the year. Overall, about 22% of companies are considering a reduction of increment and 11% have already done so.

Across industries, companies in the hardest-hit sectors such as real estate, construction and engineering have indicated the largest reduction in salary increment by 0.8%, from an average of 4.1% to 3.3%.

The trend was also observed for variable bonus strategies: 78% of companies have given out their planned bonuses. Only 11% have revised down their budget, from the average variable bonus of 15.8% to 14.5%.

“Employee-centric measures such as enhanced training and flexible health and wellness initiatives can put companies in a better position ahead of recovery,” said Peta Latimer, CEO at Mercer Singapore.

“Listening to employee concerns and providing support during these challenging times is a good way to build loyalty and goodwill, and we have an opportunity to drive collaboration and creativity with the introduction of split team arrangements and adaptive working. Seeing and taking advantages of such opportunities will pay dividends when business demand returns.”

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