HRSINGAPORE Community Discussions
Dear HR Community,
Due to the current recession, we have decided to implement a salary reduction exercise.
As this is the first time that we are carrying this out I appreciate any advice or thoughts on how to effect this well.
And if you have sample templates on how to communicate salary reduction for all employees, that will be useful as well.
Here are some ideas on how to implement salary reduction:
1. Explain why it is necessary for a pay cut to be undertaken at this time.
2. Make sure you inform everyone about the duration of the salary reduction i.e. for how long is it expected to last before a review.
3. If the management is also having a pay cut, it will be good to mention that.
4. For those who are not affected by the salary reduction, explain how others are trying to save their jobs.
5. Decide if you wish to make the pay cut a voluntary exercise.
Are you aware that there is a Job Support Scheme (JSS) which will help companies co-fund salaries of local workers?
Hence, you may not need to consider reducing salaries.
If, however, your situation does require a salary reduction exercise, consider the following:
1. The quantum of the reduction
2. How will it be applied e.g. job levels, departments or functions
3. The rationale for the salary reduction i.e. due to a decrease in the working hours or volume of work etc
4. Communicate in a way that increases understanding and support.
I think the template can only be created after you have had an in-depth discussion with your management.
Lastly, check with MOM if you need to submit any documents when you implement salary reduction.
Hope the above helps.