COVID-19 and changing workforce strategies: Aon

Fewer contractors. Cutbacks to training. Hiring freezes. Delayed salary increases. And, inevitably, layoffs on the horizon. This is the COVID-19 pandemic's impact on workforce strategies in Singapore and around the world, according to the results of Aon's latest pulse survey conducted in early April.

The survey results, released on April 29, show that companies are targeting their workforce spend as part of cost control measures. They are most commonly reducing the amount of outsourced work: 59 percent of companies in Singapore responded that they were reducing or completely eliminating their spend on contractors.

Hiring is also heavily impacted, with companies either freezing or shrinking their workforce. 46 percent are taking an extremely cautious approach, hiring only for critical roles or replacements; 30 percent have frozen hiring altogether. And a quarter of all companies have either implemented furloughs or layoffs, or are actively considering it.

Salaries have also been hit. 20.4 percent of companies are either delaying or outright cancelling salary increases, while a total of 21.4 percent had implemented either voluntary or involuntary pay reductions.

And, perhaps ironically considering that the Singapore government has been urging workers to use this downturn for upskilling and reskilling, training and development has fallen victim to the cost control measures, with 42 percent of companies saying they have cancelled or postponed employee development programs.

It is not all negative, however. Health and benefits plans and retirement programs have not been significantly affected, with only a single-digit minority of employers targeting these for cost reduction. And companies that have implemented pay reductions are more likely to have done so only for their executive teams, leaving the salaries of regular workers largely untouched. It's a good sign, according to Na Boon Chong, managing director and partner for Aon's human capital solutions business in Southeast Asia:

“Among Singapore survey respondents, pay reduction starts at the top levels while protecting the rank and file as much as possible,” he said. “COVID-19, in all likelihood, will accentuate the movement towards stakeholder capitalism where employees, customers, suppliers, and community receive as much consideration as shareholders.”

This determination to protect the livelihood of ordinary workers remains in line with the government's message—sent from the beginning, and backed up with government subsidies for local employees' wages—that jobs must be preserved.