BOSSES and senior managers here are prepared to freeze or cut their own pay first as the financial crisis deepens.
Top executives at six leading companies contacted by The Straits Times said that management will lead the way if cost-cutting measures need to be put in place.
Retrenchment will be the last resort, they said. This is in line with the guidelines issued on Wednesday by the Manpower Ministry, National Trades Union Congress and Singapore National Employers Federation (Snef) on managing excess manpower.
The six firms were Singapore Airlines, transport group ComfortDelGro, accounting firm PricewaterhouseCoopers Singapore, OCBC Bank, Maybank Singapore and the Crescendas Group, whose businesses include real estate and manufacturing.
Said SIA chief executive officer Chew Choon Seng: 'Should the situation become so bad that sacrifices have to be made, management will take the lead and the process will start from the top.'
During the 2003 Sars outbreak, SIA's management took pay cuts of up to 27.5 per cent, while the cuts among staff were between 5 per cent and 16.5 per cent.
Such cuts are a feature of the flexible wage system accepted by the airline's 14,700 employees.
Half or more of senior management's annual salary is variable - dependent on the performance of the individual and the company. This is compared to 30 per cent for junior ranks.
A further 10 per cent of monthly salary can also be suspended if SIA incurs losses for successive quarters, Mr Chew said.
'Because of this cooperation by the staff and the unions...Singapore Airlines will indeed contemplate retrenchment only as a last resort, after exhausting all other means of avoiding losses and keeping everyone on the payroll.'
The guidelines on Wednesday urged bosses to save jobs through steps such as reducing variable wages, sending staff for training or having shorter work weeks.
Some bosses are already cutting costs this way, according to a poll earlier this month by Snef, of 131 companies which hire a total of 53,000 workers.
Two out of every 10 companies polled said they had implemented a shorter work week. Seven in 10 have cut spending on travel, entertainment and major capital purchases.
The guidelines also urged senior management to lead by example. They could reduce their own salaries earlier or accept similar or deeper cuts.
The Straits Times asked bosses of 30 firms what they and senior management were prepared to do to take the lead.
Six affirmed that management would lead by example, nine declined to comment, and 15 did not respond.
United Overseas Bank, PSA Corp, accounting firm KPMG, law firm Rajah and Tann, and Keppel Corp said that it was either premature to comment on such moves or that they preferred not to do so at the moment.
Philips Electronics Singapore, law firm Wong Partnership, Singapore Food Industries and SembCorp Industries said they could not provide immediate responses as their bosses were either busy or abroad.
Among those who responded was ComfortDelGro, which employs 22,000 people worldwide, including 10,000 here.
Said spokesman Tammy Tan: 'In difficult times such as these, one of the first things we have done is look at our cost structures and made sure that we do things better and more efficiently. And in such instances, senior management definitely takes the lead.'
This was also the case for Maybank Singapore, which has 1,400 workers here. Said head of human resource Wong Keng Fye: 'Should there be a need for wage reductions, the bank will trigger the cut via the Monthly Variable Component... and senior management will take the lead.'
And responding from Sydney where he is attending meetings, Mr Gautam Banerjee, executive chairman of accounting firm PricewaterhouseCoopers Singapore, which has 2,000 employees, said: 'Our philosophy is not to make any knee-jerk reaction and cut jobs. The first (step) is to cut our flexible pay, and more senior people will have to take a bigger burden.'
This article was first published in The Straits Times on November 21, 2008.
