April 2020, usually at this time of the year, companies would be computing salary increments. The situation could not be more different. Business owners are contemplating salary cuts, layoffs and other methods of cutting costs. This webinar addresses questions around managing Employee cost by using innovative compensation strategies. The speakers are business and HR specialists from the Engineering sector and the focus will be to learn from their experience and insights on managing a business crisis situations by controlling employee cost.

1. Managing Employee Cost during
Covid-19 Crisis
13th April, 2020

2. Speakers
1
Girish Trivedi
Business Transformation Specialist
With over 45+ years of work-experience (US and India),
Girish Trivedi has seen practically every aspect of
manufacturing and operations management. Even as an
engineer, he took charge as a Finance Director of a
medium sized company (Thermax Ltd) and floated its IPO.
This gave him a unique ability to marry the disciplines of
engineering and finance. He is an independent
management consultant with interests in business turn-
arounds, operations management and PIP (Profit
Improvement plans).
Amit Choudhary
Head HR @Thermax Babcock Wilcox Energy
Solutions
With over 20 years of industry experience Amit has
successfully management various facets of HR at
Themax Ltd. A specialist in Compensation and
Benefits, he has led successful business
transformation initiatives at the company with people
at the core.

3. • This is in webinar mode so all attendees are muted.
• Please use the Q&A section to submit your questions. Your question will be
visible only to you and the host.
• Panelists will speak for 45 mins on the topic followed by Q&A. Please keep
adding your questions during the session. The host will ask the questions on
your behalf at the end of 45 mins.
• The session is being recorded and the recording will be sent to all attendees.
• In case of any internet interruptions, we have planned backups. Please be
patient.
Social Rules
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4. • As per UN report, as against the expected GDP growth of 6%, India’s GDP
growth is expected to slow down to 4.8%. The World Bank has predicted that
India will see growth of just 1.5-2.8 per cent.
• “11,000 industrial units struggle to meet salary bill in Pune” ET Pune 8th April
2020
• These was no time for planning for the situation that we are in today.
Context
4

5. How do you think the Engineering sector will be
impacted by the Covid- 19 crisis?
Should we prepare for Q1, Q1 & Q2 or more?
5

6. 6

7. 7
What are some of the good compensation practices
that can reduce employee cost and yet be fair to the
employees?

8. 1. Ease out poor performers
2. Defer rather deprive
3. Recovery-milestone based payments
4. Graded Cut – Insulate the lowest rung. Ask for volunteers.
5. Look at ESOPs as an option.
6. Worker Exchange Program
7. Leave without Pay, Sabbaticals
8. Evaluate every non essential perk. Revisit compensation structure to
introduce variable performance based pay.
9. Renegotiate with benefits providers e.g. hospitalization premium
10. Focus on efficiency
11. Employee reassignments. Re look at your operating model.
To Summarize
8

9. 9
How should compensation changes be communicated
to employees? The morale is already low, how to
cushion the impact?

10. • Communicate with Compassion (Employee & Enterprise)
• Compelling goals
• Collaborative mechanism to look at Cost
• Commitment from self
• Celebrate & Compensate
To Summarize
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11. 1
When the economy recovers,
will the approach change?
How do we balance long
term growth plans with
short term survival
challenges?

12. • Keep this management philosophy alive. Help employees to get into this
mindset. Let them know in business nothing is given. As the world gets more
global, you never know when the next "virus" will be lurking say in the form of
some geo-politcal turmoil or currency wars or regional conflicts.
• Employee productivity based compensation structure – Individual and team
To Summarize
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12

13. 1
3
What is the single most
important advice that you
would like to give to the
audience ?

14. • After all is said and done, the single most important thing that matters
is LEADERSHIP.
• This too shall pass
To Summarize
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15. AUDIENCE QUESTIONS
15
Audience Questions Responses
The company like us with the monthly turnover of 2.5crore with 225nos of
manpower company 180 & contract 45nos. How to maintain salary cost for
the month of April & May 2020 in this pandemic situation. Currently our
manpower cost is 21% monthly on and average. How can we manage the
salary cost of April & May?
Please review your business model. That is a very high employee cost as
compared to turnover even in normal circumstances. Use this crisis as an
opportunity to review business strategy.
Possibly, ESIC can be looked at for making up pay losses.
What are the options which are available to employers to manage
employee costs? Are the 11 points on your slides post lockdown option
only?
Please refer slide 8 and also session highlights published here. The options
can be exercised during lockdown as well as post lockdown.
As I understand government has released the order to keep paying all
types of employees during lock down , how employers will manage? Is
there any package ?If there is no package companies will get bankrupt
..what do you think ?
Government is still planning packages and issuing advisories. Will pay outs
during lockdown will be statutory or a moral obligation is still being
debated. We will have to wait and watch.
Even if we close down for 45 days ,post lock down everything will be
streamlined in couple of months ..so do we really need so many actions
?Is it not that every business should have sustainability of 2-3 months to
survive in such situation ?
At present it is predicted that full economic recovery will take over 1-2
years. It will also depend on the nature of business. It is essential to
prepare yourself for the long haul.
If we defer the salary, there are high chances that employees leave us and
join the competitor. What's your say on managing it?
Please remember that your competition is also managing similar
challenges.
Besides the short-term impact for 1-2 quarters, what do you think will
impact on the little long term basis, say 1-2 years. Don’t you think, some
business from China will shift to India….and may be Make-in-India will be
in real growth mood. What is your thinking on this?
Business don’t just move. They are almost extracted . China had to work
hard to reach where they are. India need to look at its business culture,
practices as well as infrastructure to reach their level.
Can core employees to come to work in initial phase and those non-core
or those who can work from home have separate salary cut formula? As
business activity picks up, those working from home or sitting on bench
can be called back?
Yes you can. But also remember that people working from home for full
eight hours are also deserving of their pay dues.

16. Thank you for joining us. You can send your feedback
or any answered questions or comments to
info@peoplewizconsulting.com.
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