MANILA (Philippines) - ASIAN employers are more likely to keep employees during an economic downturn than US companies, for whom layoffs is the top choice for coping with a slump, an international management consulting company said on Monday.
Watson Wyatt Worldwide said a survey of 1,380 employers, including 450 Asian companies, found 61 per cent of Asian employers ranked organisational restructuring - reorganising company operations to make them more efficient - as their top choice in dealing with economic difficulties.
The same percentage said a hiring freeze would be their second choice, and 46 per cent said slowing the rate of salary increases would be a third choice, the survey found, but layoffs were not among the top three choices for Asian firms.
Many Asian companies have learned from their experience during the 1997-1998 financial crisis that knee-jerk reactions like layoffs mean they will scramble and compete to get new talents when the economy recovers, said Ms Rachelle Arcebal, the company's strategic rewards director for Asia Pacific.
'With attraction and retention challenges in Asia Pacific surpassing every other region covered in the survey, companies will naturally explore other options before letting go of their employees particularly their top performers and those possessing skills critical to their business,' Ms Arcebal said.
In contrast, firing workers was the top contingency plan among 52 per cent of US employers surveyed, while 46 per cent said restructuring was their first choice in coping with a downturn.
A third of US companies surveyed for the study, to be fully released later this year, said they have no formal contingency plans - twice more than the 15 per cent of Asian companies without such formal contingency plans, said Ms Laura Sejen, a director of Watson Wyatt Worldwide, a global management consulting company.
If economic conditions continue to weaken as a result of the global financial turmoil, many companies will evaluate their staffing levels, pay programs and overall organizational structures, Ms Sejen said.
'We know from previous recessions and economic slowdowns that those companies that have contingency plans in place will be in a much better position to weather the storm and bounce back when the economy improves,' she said.
Ms Sejen warned that layoffs lead to a loss of the company's institutional memory, and alternative approaches like reduction in the work week could be a better option. -- AP