The last few months turn out to be the worst nightmare for startups where businesses got affected greatly. Amidst the Coronavirus outbreak, employees too faced hardship.
Salary cut, reduced salary and termination become common norms among several firms. Many companies, across sectors, had implemented pay cuts ranging from 5% to 50% and some even entrenched staff during to poor business period during the nationwide lockdown. This has caused a serious iteration rate in employees retention.
“Wage cuts of mid-management and senior staff across export-oriented sectors are likely to be extended for a month or more as these are yet to see sustainable orders from the West, while those across auto components are being reversed,” said Animesh Saxena, President of the Federation of Indian Micro and Small & Medium Enterprises.
Now, the situation is getting better, the festive season turning out to be blessings for many employees. Several prominent firms i.e. TCS, OYO, Zomato, Swiggy, WIPRO, Infosys, Reliance Industries Limited (RIL), ed-tech startups UpGrad and Toppr, construction equipment giant TIL, interior design and home decor company Livspace, engineering major Forbes Marshall and Deki Electronics.
“Unlocking of the economy has had a positive impact on the cash flow position of the companies in many sectors. Some companies have initiated the process of reversing the wage cuts that were introduced earlier this year. This is an encouraging sign,” Dilip Chenoy, Secretary-General of the Federation of Indian Chamber of Commerce and Industry (FICCI)
According to reports, at least half-a-dozen economic indicators, including goods and services tax collections, e-way bills and rail freight loading for September are showing sign of recovery which in turn reveals the economic activities are slowly pacing up. As a result, companies had started restoring salary in a graded manner to achieve pre-Covid-19 level scenario at the same time offering increments and bonuses.
However, worker wages are being restored on priority, export companies are still in a wait-and-watch mode before reinstating salaries of their top management. Companies are trying their best to boost the morale of the employees and hoping this will boost consumption as well.
“Our team took a pay cut starting April to navigate the uncertainty that surrounded us due to the sudden lockdown. Over the next three months, we have been able to restore it after making appropriate cost rationalizations in other areas,” said Zishaan Hayath, Founder of ed-tech firm Toppr.
According to a survey by AON India on HR practices of over 2,000 companies globally and 425 in India, almost 12% of the companies has reinstated the pay and other 20% will soon follow the norm. The process is expected to take place in a phased manner. The hard-hitting industries such as tourism, catering and hotel business can expect a slight delay in salary reinstate process.
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