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View Poll Results: As an employee or a boss, what kind of salary cost-cutting are you okay with?
Salary cut 179 30.65%
Unpaid leave / furloughs 97 16.61%
Layoffs 14 2.40%
4-day work weeks 124 21.23%
Lower salary to continue work-from-home 153 26.20%
No bonus for a foreseeable future 319 54.62%
No increments 327 55.99%
Reduction in perks (company cars, allowances etc.) 278 47.60%
Other (please specify in your post) 17 2.91%
Multiple Choice Poll. Voters: 584. You may not vote on this poll

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Old 14th April 2020, 15:23   #46
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

These options seem to be based on private firms/business as the axiom. I understand the issues faced by small business but what big is this big business if it cannot manage a two or three months lay off on its own?

There are other sectors, such as the government, public sector undertakings, cooperative sectors, etc, where the logic of "management" will be very different from the logic that gives these options. Of course, deferring salary by 30% etc is an option weighed by certain states like Karnataka and Maharashtra. The Kerala govt was asking for an entire month's salary, which is certainly way too much. The central government takes one-day salary, to begin with. But those in the Union govt has set a model by accepting 30% cut in salaries of the ministers for the entire coming year. They did so first, i.e. before eyeing on the salaries of the employees. That, of course, is commendable.

The governments have other options too, such as slowing down temporarily many infrastructure and developmental projects which are not that urgent, cutting down defense allocations, cutting down concessions to yet-to-come corporates, increasing recoveries, etc. These may impede new employment opportunities for a time, but will not affect the existing workforce and those who are dependent on this workforce. It can cut on foreign travel expenses of ministers wherever possible, and send only a limited set of civil servants. Look at how much the union ministry had decided to spend on closing Air India's debt -- a whopping Rs. 45000 crores (one would wonder what the need is to sell Air India then). See the amount of stressed assets in the state banks that are written off. The first bullet train will ply only when we spend more than a lac crores. For comparison, we can see India's overall economic package for Covid-19 crisis: it is only 1 Lac 75000 crores. Consider the gains the govt would make by the increase of tax/cess on fuel (at the time of a fall of crude oil price) once the lockdown is lifted.

So, if we go in for a prudent management of the economy, there is no doubt that such economic emergency can be overcome; and the state can bail out even small private business sectors. For the future, it can reorient our investment priorities to agriculture (where there can never be a dearth of demand/need for production), in place of people looking at auto and entertainment industries as fields worth making the investment. The fragility of these latter is something we seem to miss totally.

There are also big sectors but quite unorganized, non-urban and self-reliant. Look at the vegetable markets that appear on the roadsides in evenings. Look at their economy. We also look at those who work as maids, agri-labourers, coolies, and so on, in sectors people employ themselves and earn everyday -- what about their income... is there an option to think of what kind of deduction has to be made in their case?

In short, my view is that, as a state, our demands and options should be restructured. And, we should be raising such messages to the state rather than thinking locally, within the internal economy of a business. We may take this opportunity to think of what the term business could mean in the post-Covid 19 world, say in Italy or in USA, and subsequently in India.

I am particularly perturbed by the US eagerness to lift the lockdown, exhibited last night, at the peak of the Covid-19 death rate there. The worry is about economy, and the justification is that Covid-19, anyway, will run through most of its population regardless of whether you can help it. This is the limits of the logic of doing business and building economy on the basis of that logic. It seem to expose, in a nation, how little this grand logic can bother about its own people's lives. India, by extending the lockdown, as the number of cases is on the rise (despite at a somewhat relieving rate of double the number in every seven days at present), has done much better. Thankfully, the US logic is not a reigning one here.

Deferring of salary is the least damaging among the bad options, but only for most of the organized sectors. This too, provided that there is deferment of payments too, as offered by the RBI/banks, schools, etc. We need to be concerned for the large others, outside such sectors too.

Last edited by Vipin Kumar : 14th April 2020 at 15:47.
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Old 14th April 2020, 15:24   #47
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I voted for no bonus / perks, 4 day work week, reduced salary in that order.

For me layoffs should be a last resort as to the employee it turn their world upside down and to the employer there is a high reputation risk attached in the current scenario.

Hope we come out of this smarter, if poorer with out too much permanent damage.
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Old 14th April 2020, 15:51   #48
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I'm not usually pro-business in my views (quite the opposite most of the time), but gotta respect any business that can keep it's employees on the rolls during this time with whatever means necessary, pay cuts, deferment of bonus whatever.

Most employers can actually let a lot of people go at this time citing a dramatic lack of demand, which is undeniable. It's not like those employees will get other jobs with the competition. And once economic activity does pick up, whenever that is, there will be more than enough people in dire need of jobs to fill those roles again.

So gotta respect those who are keeping their employees during this period.

Last edited by am1m : 14th April 2020 at 15:52.
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Old 14th April 2020, 16:16   #49
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

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Originally Posted by am1m View Post
I'm not usually pro-business in my views (quite the opposite most of the time), but gotta respect any business that can keep it's employees on the rolls during this time with whatever means necessary, pay cuts, deferment of bonus whatever.

Most employers can actually let a lot of people go at this time citing a dramatic lack of demand, which is undeniable. It's not like those employees will get other jobs with the competition. And once economic activity does pick up, whenever that is, there will be more than enough people in dire need of jobs to fill those roles again.

So gotta respect those who are keeping their employees during this period.
Need to also look at this the other way. How many of those employees will remain loyal when things are booming ( If!! ) next year and take a lower increase when a startup offers some crazy hike?
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Old 14th April 2020, 16:25   #50
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

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How many of those employees will remain loyal when things are booming ( If!! ) next year and take a lower increase when a startup offers some crazy hike?
Not many I guess.

Actually, what made me post that was because of the surprising number of negative reactions I saw online when my company announced that there would be no bonuses for this year. I think I was one of the few people who was grateful that there were no layoffs and no salary cuts (yet). Most of the others seemed to think that no bonuses was a bad deal. I was wondering what they had in mind, did they think it would be business as usual? Are they planning to get another job? Jump to the competition? Who is going to be hiring now?
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Old 14th April 2020, 16:29   #51
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

Voted for : salary cut, no bonus for a foreseeable future, no increments, reduction in perks and 4 day weeks

I work for an IT company which specializes in Digital Out of Home Advertising (DOOH) and all of our major clients have been impacted by this so it badly imapcts us.

My appraisal was due in march but it has been put on hold indefinitely now. We also had a liberal expense account and we have been advised not to spend anything on it.
I am okay with 4-day week, Salary cut, No Hikes and bonuses till everything settles down if it is meant to save the company from going belly up. Fortunately our higher management has been transparent to all the employees and keep us updated on any developments.

New jobs also have been impacted very badly, my wife had 3 interviews lined up last time and all of them have been cancelled now.
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Old 14th April 2020, 16:31   #52
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I'm a first-gen Entrepreneur, we just completed 5 years in business!! We have 50+ staffs who work with me. We have decided not to layoff any one, even the last newcomer, who is only 1 month into the employment.



We will hold on the increment for at least 6 months, to see how the business is going to overcome this difficult times. We have been giving a Bonus every year during Diwali, should wait and watch for this year, as its another 6 months from now. For me, the irony is all our major clients are from Germany, Italy and Spain


When the going gets tough, the tough get going !!
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Old 14th April 2020, 16:59   #53
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I am part of the senior HR Leadership in my firm. One of the things we are trying to drive is to ensure that relevant strategies are put in place to increase liquidity. One key thing we are driving is requesting our Employees to utilize their leave balances in a responsible manner without affecting their productivity beyond acceptable levels. This will help us to avoid leave encasement payouts which is a significant amount.
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Old 14th April 2020, 17:03   #54
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

There is no one solution that fits all. The only rule in my opinion that needs to be followed is good ethics. If a firm can sustain jobs by reducing salaries, benefits, etc they should do it. For some, it would also mean some layoffs or else they would go out of business completely. But there will be many who will try to cut jobs in order to maintain profitability, keep stock prices high, etc. Those kind of firms should not be supported.
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Old 14th April 2020, 17:12   #55
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I would love to go away only with salary cuts. But consider the situation, currently we have some products, which is not going to be existent after 6 month, then what do we do . Other than completely closing that team. This is the reality is what I am foreseeing .
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Old 14th April 2020, 17:53   #56
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

Voted for others.

I am a wholesale pharmaceutical distributor and in my line of work you just cant work from home. Being a distribution business it is quite labour intensive as well as an essential service and my employees have shown tremendous spirit and risen to the occasion of meeting this challenge head on. Attendance is around 80- 83%

In appreciation and acknowledgement of their efforts I have instituted a fixed daily allowance during the lock down period which is to be paid monthly based on the number of days each employee is present. This allowance roughly translates into anywhere between 40-60% of their monthly salary.

Yes, business is down but having any business is always better than no business. Planning to go ahead with the increments as of now. Bonus is a few months ahead and is usually given during the month of September (during Onam Festival here in Kerala). So hopefully things will get better by then.

The main challenge now is collecting payments on supplies made. Planning to absorb the hit for now and be there for my employees. Stay Safe!

Last edited by microaubin : 14th April 2020 at 17:55. Reason: forgot to mention voted for
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Old 14th April 2020, 18:20   #57
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

Slightly off topic here but with the government's coffers running dry, I'm sure it will up to the middle class to save this country, yet again .

This means taxes, either income tax or GST will go up, in a way that adversely affects the rich and the middle class.

In other words, with the drowning rupee, increasing taxes (which the government will do) and falling salaries, you're losing more money than you think.
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Old 14th April 2020, 18:36   #58
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

I cannot even believe that people are talking of perks and bonuses in any form. We are staring at a nuclear winter, given our mix of heavy dependence on low-end services, manual labour, and agriculture for employment. I sincerely hope I am wrong. I am pretty much doing whatever it takes to keep things running and not shut down.

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Originally Posted by NiInJa View Post
My mom is not willing to pay the maid anything for the month of May, but I've already told her that I will be paying her in full, whether she likes it or not, as long as I am paid in full. Would be interested to know how others are managing this.
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I had a cook but had informed him to stop his services by end of March as I was relocating to another city (which I couldn't). On 23th March, he stopped coming and called saying Police were harassing in their area. I told him to stay indoors. I found some opportunity in the next few days, went to his place and paid his money for March and have assured him similar support this month and the next even though, technically he doesn't work for me anymore. That's the least I could think of doing.
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The main challenge now is collecting payments on supplies made. Planning to absorb the hit for now and be there for my employees. Stay Safe!
Glad to know that employers and people like you guys exist. There is some hope. Take a bow!


Quote:
Originally Posted by am1m View Post
Actually, what made me post that was because of the surprising number of negative reactions I saw online when my company announced that there would be no bonuses for this year. I think I was one of the few people who was grateful that there were no layoffs and no salary cuts (yet). Most of the others seemed to think that no bonuses was a bad deal. I was wondering what they had in mind, did they think it would be business as usual? Are they planning to get another job? Jump to the competition? Who is going to be hiring now?
People tend to be unintelligent, with their heads buried in the sand. Reality hits them hard when they're thrown under the bus. Then everyone becomes a socialist.
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Old 14th April 2020, 18:47   #59
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

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People tend to be unintelligent, with their heads buried in the sand. Reality hits them hard when they're thrown under the bus. Then everyone becomes a socialist.
Totally true. The same guy who used to job hop every year, will now play the socialist card of how companies are cutting pay or laying off.

The cycle of life or Karma!!
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Old 14th April 2020, 19:07   #60
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Default Re: As an employee or a boss, what kind of salary cost-cutting are you okay with?

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Originally Posted by Rehaan View Post
It might sound harsh, but companies should err on the side of EXTREME frugality:

Keep this in mind. Think absolutes, not percentages.[/indent]
Couldn't agree more. Before getting to employee and payroll costs, companies should :

1) think frugal and disruptive

- Frugal - what other costs can be reduced ? Re-imagining total cost structures (zero based budgeting based - simply put, how would the business and costs look if one were to build business from scratch today)

- Disruptive - restructuring business / operating model (zero based operations approach)

2) distinguish cash flows from profitability and balance sheets - while the argument still holds for M/SMEs and businesses with cash flow issues, a majority of large businesses have good cash flows . Their concern is about profitability and if listed , how the stock market and investors will respond to reduced earnings - this should be the last thing /reason for asking employees to go .

3) If there is still a need to reduce payroll costs, the order should be graded cuts upto a certain absolute salary level.

Top mgmt salary cuts (higher %) >> Mid mgmt salary cuts (lower %) upto a threshold , below which don't cut salaries. a 20% cut for a 10Cr exec vs 20% for XX 20K employees ?? Get the point. Also for the 20k salary person, every penny matters at this stage.

Ideally the govt. should step in - even if they can't reimburse a part of the salaries (like some other countries have done), they should allow companies to make an adjustment against future earnings/taxes for the delta payments made out now.
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