Amid increasing concern over COVID-19, companies in India expect negative impact on their business in the next 12 months, and for some the adverse impact may last longer, driving organisations to consider “workforce optimisation”, a survey said on Tuesday.
According to the Willis Towers Watson survey, 57 per cent of organisations in India expect a “moderate-to-large” negative impact on their business in the next six months, while 46 per cent expect this to last over a 12-months period.
The survey titled, COVID-19 India Readiness Survey, noted that 19 per cent expect an adverse impact to last over a two-year period, while only 5 per cent of organisations expect a positive business impact within the next 12 to 24 months.
“The tough economic conditions and anticipated business impact could drive organisations to consider workforce optimisation,” said Rohit Jain, Head of India, Willis Towers Watson.
As per the survey, almost one in three respondents anticipate that their 2020 annual bonus for executives and employees will be impacted, while 17 per cent expect an impact on their 2020 Long Term Incentive plans.
“March to April is the performance review period and we’re seeing organisations adopting a wait-and-see approach.
” Most organisations are likely to consider the options of selective increments for critical skill staff, defer staff increments by three to six months, or even do away with increments altogether if the adverse circumstances prevail,” said Rajul Mathur, Consulting Head, Talent and Rewards, Willis Towers Watson, India.
The survey found that 42 per cent of respondents have not taken a decision on salary increment budgets for this year, while 33 per cent indicated that performance appraisals and bonus pay-outs will happen as planned.
Moreover, 77 per cent said that there will be no reduction in salaries and 53 per cent responded that there have been no adjustments to the sales incentive pay-outs.
“Employers should take an emphatic and considerate approach and evaluate options such as staff redeployment, reduced working hours/days, long service leave, sabbatical, furlough, hiring freeze and voluntary pay cuts, before any serious consideration of a workforce reduction,” Jain said.
The survey was conducted from March 20 to 31, 2020 and data was collected from nearly 417,000 employees working across sectors such as Financial Services, Healthcare, IT & Telecom, Manufacturing, Public Sector & Education and Wholesale & Retail.