New Delhi: About 54 per cent organisations expect to see a moderate-to-serious impact on their annual revenue with business declining by over 15 per cent due to the COVID-19 pandemic, according to a report by Korn Ferry.
The study – undertaken to understand the impact of COVID-19 on business and HR practices – found most respondents saying rewards and benefits will be affected amid the ongoing crisis.
According to the report, 27 per cent respondents said they expect small impact (5-15 per cent) on annual business revenue. Another 32 per cent said they expect moderate (15-30 per cent), while 22 per cent foresee a serious effect (over 30 per cent).
Only four per cent respondents said they expect to see an over 10 per cent rise in revenue, or it being in line with budget.
Not all industry sectors are impacted equally. Sectors like transportation, retail, hospitality, manufacturing and services organization expect “substantial” negative impact on business, while banks, healthcare, high technology, consumer products, utilities and public sector establishments expect less serious impact.
The report emphasised that we are still in an early phase of this pandemic, and the findings will “undoubtedly change over the coming weeks”.
Interestingly, 61 per cent respondents said they had a Business Continuity Plan (BCP) in place with plan to adjust.
“When threats becomes a reality, companies with BCP can adapt to the crisis and adjust any strategy necessary to avoid more significant losses to the organisation and to its people,” the report noted.
Most respondents were of the view that adjustments to rewards – in the form of salary cuts and delay in hikes – will likely include employees throughout the organisation.
About 29 per cent said they have, or are considering, salary cuts, while 49 per cent said they have either frozen or are considering freezing of salary hikes.
Also, 75 per cent said they have, or are considering, a deferral of annual merit increases, the report said.
Interestingly, active leave management has been considered and even implemented by firms.
About 14 per cent organizations have put unpaid voluntary leave in place, and a further 16 per cent are considering it.
Involuntary leave has been considered by 8 per cent, while only 11 per cent have taken such action.
Lockdowns and mandates of social distancing has forced organisations to accelerate work from home arrangements.
However, uncertainty around business environment is also prompting businesses to halt hiring processes.
About 53 per cent organisations are already freezing hiring with another 20 per cent saying they are considering it. Organisations are looking at options like reduction of overtime pay (41 per cent) and even temporary layoff or redundancy (13 per cent).
However, 74 per cent organizations said they are not currently considering permanent staff layoffs or redundancies, the report said.
(PTI)