ASIAN employers are starting to brace themselves for the economic downturn. This is according to a survey by global management consultancy Hay Group released last Friday.
It found that 81 per cent of Asian companies polled are planning to freeze or decrease headcount in 2008.
About 33 per cent of the 140 Asian companies polled are also currently freezing or looking to freeze their employees' base salaries. In comparison only 15 per cent of the 863 non-Asian companies polled are preparing to do the same.
In total, 1,003 companies were surveyed. The firms, mostly multinational corporations across sectors such as energy, retail, healthcare, and finance and banking, were from 80 countries worldwide.
The non-Asian respondents included 250 companies from Europe, 370 North American companies and 150 companies from Africa and the Middle East. There are no statistics available on the number of Singaporean companies polled.
"Short of layoffs or salary cuts, this is as serious as you can get in terms of sending out distress signals," said Ms Charlotte Park, Hay Group's managing director of reward information services in Asia.
She added that it is not surprising that Asian employers, in anticipation of the region's economic slowdown, are becoming more cautious when it comes to salary and headcount increases.
A survey of 1,413 executives by the McKinsey Quarterly for the first quarter of 2008 also found that 65 per cent of workers in the Asia-Pacific region expect their companies' workforce to downsize or remain the same over the next six months.
About 89 per cent of these employees in the Asia-Pacific region felt that the economic situation in the United States would have a very negative effect on their economies, compared to the 68 per cent of respondents elsewhere who felt the same.
Local human resource experts, however, were reluctant to toll such loud alarm bells. Mr Victor Lai, head of business development at human resource consultancy Achieve Group, advised companies against adopting such "short-sighted" remedy measures.
He said that employers should focus on retaining well-performing current staff to cut costs in the long run. Hiring and training new recruits to fill their ranks will cost employers at least three to four times more than rewarding current staff appropriately, Mr Lai estimated.
Ms Huang Shao Ning, director of online recruitment portal Jobsfactory, expressed surprise at the survey results.
She cited the Monthly Variable Component (MVC) scheme in Singapore as a buffer measure for employers. The MVC, typically 10 per cent of a worker's wages as recommended by the Singapore government, allows businesses to adjust wage costs to deal with cyclical downturns.
