Coping With COVID-19: Companies Implementing Pay Cut, Voluntary Unpaid Leave Etc.
Save Costs in Order to Save Jobs
The coronavirus outbreak has caused an impact on our economy. The impact is believed to be worse than that of Sars, or severe acute respiratory syndrome, in the year 2003.
While Budget 2020 includes setting aside a fund of $800 million for ministries to deal with COVID-19, and a further $4 billion package to help workers and companies, we are seeing some extreme measures taken by local companies as we get by this tough time.
Sats Offering No Pay Leave, Early Retirement; Vps and Above to Take 10% Pay Cut
SATS provides food solutions and gateway services solution to the aviation industry. With the travel industry taking a big hit from COVID-19, SATS Ltd is suffering the impact of lesser flights across the Asia market.
Titled “Save Costs in Order to Save Jobs“, you can check it out on the forum.
To give a quick summary, SATS Ltd is taking a few measures to weather this tough period of time:
- The management team of SATS Ltd will be taking a 10% pay cut
- Arrangement for employees who wish to go on voluntary unpaid leave. Their job will not be replaced.
- Employees above the age of 55 can consider the option of early retirement. Employee Assistant Payments (EAP) will be provided.
Measures like this seem inevitable. Just last week, Temasek also went through similar measures.
Temasek Freezes Staff Salaries, Senior Management to Take Partial Cut in Bonuses
For its upcoming compensation exercise which will happen in April, Temasek took up these measures:
- Senior management may take a voluntary pay cut of up to 5% for up to a year
- Senior management team which includes managing directors and above will experience a partial cut in their annual bonuses
- Company-wide salary and promotion freeze
Singapore Airlines (SIA), SilkAir and Scoot Stop Recruiting
With the travel and aviation industry taking the most hit from COVID-19, Singapore Airlines (SIA) and SilkAir were made to cut costs too.
With the number of flights required significantly lesser, the SIA Group, making up of SIA, SilkAir and budget carrier Scoot will be:
- Freezing their recruitment
- Possible unpaid leave schemes
SMRT Cuts Wages For Managerial Staff
SMRT will also be implementing a salary reduction for its management staff this year.
- SMRT will impose a salary reduction of up to 5% and a 0.5-month reduction in bonus for its management staff this year.
CapitaLand Board Members To Take Pay Cut
Here’s the message sent out by CapitaLand:
To fight through this difficult period, CapitaLand took up certain measures on their compensation front too.
- Salary freeze for all staff at managerial level and above
- Board members and senior management will take a 5 to 15% reduction in their board fee and base salary
To better support the retail partners of CapitaLand, a portion of the compensation for its managerial staff in Singapore will be paid in the form of CapitaVouchers.
Political Office Holders To Take A One-month Pay Cut
All Members of Parliament and political office holders will be taking a one-month salary cut. Senior public service officers will take a half month pay cut.
Bonus For Public Officers On Front Line
In the battle against COVID-19, the public officers on the front line play an important role.
The Government will award public officers on the front line with a special bonus of up to one month.
Sars and The Financial Crisis
If you are wondering if this means that Singapore is going to SH*T, and we are in an all hell breaks loose situation, you need to calm down.
Similar situations have happened in the year 2003 during the Sars outbreak and the financial crisis in 2007. Back then, measures such as salary cut and voluntary unpaid leave were implemented too.
Let’s Not Let Fear Get The Better of You
We see media houses jump on the fear of this unique event of COVID-19 and covering it as if it is the end of the world. Some even made COVID-19 related content a premium one to make some quick money out of it.
We, on the other hand, see hope and smarter personal finance decisions being put into practice.
That Rainy Day Fund
Over the years we touched on the importance of Rainy Day fund when it comes to allocating your monthly salary. Rainy day fund should be able to help you stay afloat for at least six months without any income.
COVID-19 is a perfect example of a possible use case of your emergency fund.
For some people with a huge amount of savings, they see this time as the perfect investment opportunity. Jump on any investment forums to see the term, “time to buy cheap” getting repeated constantly.