Macro Economy

8 of 10 companies will pay full wages for lockdown period, says survey

Our Bureau Chennai | Updated on April 20, 2020 Published on April 20, 2020

2.4% of firms surveyed will cut jobs while 10.6% will cut salaries

Although the pandemic has dealt a severe blow to businesses, eight out of 10 companies have decided to pay their employees full wages for the lockdown period, according to a nationwide survey conducted by executive search firm Sapphire Human Solutions.

The survey was conducted with human resources leaders, chairmen, managing directors, CEOs and founders of over 150 top corporate houses across industries to gauge the market mood and trends post the lockdown and to also understand the impact it would have on employees’ job security and salaries.

According to the survey, 82 per cent of the companies said they will pay full wages for the lockdown while 11 per cent said they will pay 50 per cent or less. Only 0.9 per cent of the employers said they will not pay their employees during the lockdown period while 6.5 per cent were undecided.

Almost 88 per cent of the companies said the pandemic and the subsequent lockdown have hit business hard, out of which 44.3 per cent said they are adversely impacted and 26.2 per cent are severely impacted. While 17.2 per cent of the companies surveyed said the impact isn’t much right now, but will affect them later, only 12.3 per cent have not felt much of an impact.

To overcome the challenges posed by Covid-19, 2.4 per cent of the companies said they will retrench people while 10.6 per cent will cut salaries. Although 42.3 per cent said they haven’t decided yet, a larger share (44.7 per cent) said they have not opted for any of these options.

Increment plans

The survey also said that 41 per cent the companies have not yet decided whether they will pay increments this year but 24.6 per cent are certain they will not. About 17.2 per cent will reduce the increments while an equal number will continue with increments like before.

One of the key highlights of the report is that almost 70 per cent of the companies surveyed already have Covid-19 covered in their group medical policies. Also, 16.3 per cent will bear the medical expenses as a special case if their employees get infected, as against 10.5 per cent who will support the employees with leave with pay but not foot the medical cost. Only 3.3 per cent will neither bear the medical expenses nor give leave with pay if required.

About 20.5 per cent of the companies have also hinted that they might move employees from payroll status to contractual agreements post lockdown; 42.6 per cent said they wouldn’t.

On companies’ outlook post pandemic, 27 per cent feel entirely negative about the future while 47.5 per cent are cautiously optimistic. About 17.2 per cent are neutral in their outlook at this stage and 8.2 per cent continue to be positive.

Published on April 20, 2020

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