The country's top companies are seeking innovative ways to manage their costs rather than cut jobs, according to remuneration specialists dsd Consulting.
The Auckland-based company has surveyed 92 of the country's top businesses, with employees of 50 up to more than 5000, about their strategies for managing people-related costs in
the current climate.
"Although 52 per cent of organisations are decreasing salary review budgets, the heartening finding is that most employers are genuinely seeking innovative ways to save costs before cutting jobs," says Susan Doughty, director of dsd Consulting. "The number one priority is supporting sustainable business and safeguarding jobs.
"These organisations are asking for ideas in a range of ways including staff focus groups and open forums. One company reported cost savings of $500,000 as a direct result of staff input and feedback. Another innovative organisation has a hotline to the CEO which is open to all staff," says Doughty.
So where are the savings going to be made?
First cab off the rank is the immediate reduction in the use of temporary and contract staff to safeguard permanent jobs. Over 60 per cent of companies are adopting this strategy, and implementing a freeze on recruitment. In contrast, only a third plans to make staff redundant.
A freeze on travel is also high on the list at 52 per cent, with many companies encouraging the use of in-house video conferencing facilities.
"Although there has also been a lot of 'noise' about compulsory reduced hours of work and four-day weeks, only 15 per cent have actually implemented these policies," says Doughty.
The broader focus of these organisations is on reducing overheads such as overtime, extraneous benefits and back-filling staff on leave or covering vacant positions within current staff levels, rather than hiring new staff.
Of the companies surveyed, 9.2 per cent are planning no increases for all staff in the next year. Executives are in the spotlight with 23 per cent of organisations placing a freeze on executive salary increases in 2009.
None of the 92 companies surveyed have, or plan to implement, wage cuts for general staff at this time.
