Covid-19: 46% Businesses in India Expect Negative Impact in the Next Six Months

April 29, 20205:11 pm1082 views
Covid-19: 46% Businesses in India Expect Negative Impact in the Next Six Months
Covid-19: 46% Businesses in India Expect Negative Impact in the Next Six Months

Amid the growing concern over COVID-19, 57 percent of organisations in India expect a moderate to large negative impact on their business in the next six months, while 46 percent expect this to last over a 12-month period. Signalling the long-term business impact of the coronavirus, 19 percent expect such an adverse impact to last over a two-year period, according to a ‘COVID-19 India Readiness Survey’ by Willis Towers Watson, a leading advisory, broking and solutions company. Only 5 percent 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. 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. In a post-COVID-19 world, some companies may need to re-hire and potential employees will factor in the consideration of organisational culture and how companies have treated their employees during the crisis”, said Rohit Jain, Head of India, Willis Towers Watson. 

Salary increments, performance appraisals and incentives

The survey found that 42 percent of respondents have not taken a decision on salary increment budgets for this year, while 33 percent indicated that performance appraisals and bonus pay-outs will happen as planned. Furthermore, 77 percent said that there will be no reduction in salaries and 53 percent responded that there have been no adjustments to the sales incentive pay-outs. Almost one in three respondents anticipate that their 2020 annual bonus for executives and employees will be impacted, while 17 percent expect an impact on their 2020 Long Term Incentive plans.

“We expect compassionate short-term and realistic long-term implications on pay and compensation. For a majority of Indian organisations, the timing of this outbreak has a significant bearing on the annual performance management and rewards exercise. 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. For those employers who plan to proceed, they will likely plan a low to moderate increment in salaries so as to ensure liquidity and protect cash-flow,” said Rajul Mathur, Consulting Head, Talent and Rewards, Willis Towers Watson, India.

See also: HR Top Priority during COVID-19

Remote working, leveraging technology and effective communication

Eighty-three percent of organisations plan to review their work-from-home policy, and 46 percent indicated that they would reimburse employees the expenses incurred for setting up their home internet for work purposes. Employers are also taking several measures to keep employees engaged in the new scheme of things. These include team-based virtual or social engagement initiatives, regular company-wide or department level communications, and town halls organised to address employee concerns.

Measures employers are taking to keep employees engaged

“Employers need to communicate optimally by choosing the channel and frequency carefully while keeping the communication simple, in a way that every message adds value to the employees by providing critical information or alleviating stress. Given the information overload, especially on social media and multiple sources, educating employees and guiding them towards a few reliable sources including those launched by the government is recommended,” said Jain.

“The rate at which corporates and employees have adopted technology in the last couple of weeks is truly remarkable. This combined with large numbers of employees working remotely, also leaves organisations vulnerable to cyber-attacks. It is therefore important for organisations to also invest in employee awareness and education while reviewing cyber insurance adequacy,” added Jain.

Employer response and preparedness

Over the past weeks, organisations in India have also initiated several measures to take care of their employees as a result of COVID-19. Most prevalent amongst these are increased access to hand sanitisers, provision of masks and other protective equipment, introduction of alternate work arrangements, increased communication on prevention, disinfection of worksites and increased access to counselling.

“As employers try to protect their most valued asset, i.e. people, this unprecedented situation has brought forward the critical role of HR. Employers must urgently address issues around employee health & safety and business continuity, while simultaneously readying plans around employee engagement, productivity, performance management and rewards,” said Rajul.

Top actions organisations have taken or are planning to take for their employees as a result of COVID-19

Read also: Return to Work Practices during the COVID-19 Outbreak

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