Oct. 27 (Bloomberg) -- CLSA Asia-Pacific Markets, the regional brokerage unit of Credit Agricole SA, asked 500 senior bankers and executives to accept pay cuts of as much as 25 percent next year to avoid getting rid of jobs.
The voluntary salary reduction program that was proposed for one-third of the staff last week would reduce basic pay by 15 percent to 25 percent starting in January, according to Chief Executive Officer Jonathan Slone. The participating employees would be paid the salary they forgo and may also receive a bonus payment when profit meets certain targets, he said.
``We think it's the right way to keep our team intact, maintain client service and allow us to expand our offering during a difficult time,'' Slone said in an interview. ``We face challenges like this crisis as a team and when conditions turn, we all share in the benefits as well.''
COMMENT BY TAN KIN LIAN:
This is an excellent way to deal with the recession. It is different from the American approach of retrenching employees.
mr tan, i think it's better to retrench..
ReplyDeletegiven that banking and finance was a bubble industry over the past few years, human resources was foolishly diverted to the banks, hedge funds, as RMs, financial engineers, inv bankers etc..
we need to free-up these employees and it's time for them to find work that actually ADDs value to the economy..
naturally its a painful process and merely a symptom of the past economic misallocations..
but it's a necessary process to rebuild the economy..
In the 1970s & 1986 recessions, spore companies & GLCs cut pay and work together with one heart to overcome the crisis.
ReplyDeleteThe bond among people become stronger.
During asian fin. crisis, many were retrenched. Quite a number of them, especially the older ones, still cannot find proper employment until now, after so many "good years".
Chief and Senior Executives of a German Bank forgo their 2008 bonuses.
ReplyDeletehttp://www.wealth-bulletin.com/home/content/2452219687/
YM,
ReplyDeletei absolutely agree with you that the people who do not add value to the economy or their cleints like RMs, insurance agents and consultants should be freed up for deployment to other indsutry like food or the cleaning industry. The freed up insurance agents can fill up the hard work jobs in toilet cleaning and seawage cleaning so that the old people can have a lighter job in the service industry.
The ministers should set example by cutting their multi million dollars salary by 50% or more based on their needs. They should not be paid more than they need. This freed up money can go to help the needy and those affected by the recession. Cut down unnecessary oversea eat air trips and preferably no meetings at all.use technology like teleconferencing.
American approach is quick and sharp. After the retrenchment, the moral of employees (who are retained) will improve significantly.
ReplyDeleteThere are pros and cons in each approach.
sorry to bust your balloons
ReplyDeletethis is ROUND ONE, its 25%
you havent got to ROUND TWO, which would be in another 3 months time
just like First Aid, the paramedic first priority is to stop the bleeding
whether the patient die on the way to the hospital is the emergency team problem
whether the patient die IN the hospital is the doctors and nurses problem
whether the patient make it thru ICU is the ICU team problem
they are segregating the responsibilities by tiers where they could, when they could, its up to the next team to save the patient UNTIL hes out discharged.
then that would be the patient's family problem
so this is not the end, but the beginning obviously
i think all banks should take measures to safe the jobs of their staff. c'mon, you hire them when you need them and fire them when you don't need them - too American-ise!
ReplyDeletei've seen staff who are in their forties being retrenched - and they havent found a job yet. What do you expect them to do?
The measures taken by CLSA is great b/c they offered the cut to minimise retrenchment. And of course, if they still see red, then other measures will need to be taken (eg: no bonus, increment across the board, work in shift rotation-3day work) There will be alot of measures for banks to take, the answer is - DO THEY WANT TO TAKE THAT APPRAOCH or JUST AXE THE STAFF!