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Kuala Lumpur: Malaysian organisations are experiencing a greater business impact due to Covid-19 pandemic but fewer are adopting people cost reduction when compared to Asia-Pacific (Apac) findings.

According to a recent survey by Korn Ferry, 31 per cent of Malaysian companies are expecting their 2020 revenue to decline by over 30 per cent, compared to 22 per cent of companies surveyed in Apac.

The global consulting firm said of the 31 per cent, around two in five organisations anticipated that their revenue will decline by more than 50 per cent which is one of the highest in the region, signifying the economic costs the global pandemic has on the country.

Despite the outlook, 83 per cent of organisations in Malaysia said they are not currently considering permanent staff layoffs or redundancies, with the most commonly implemented measures for people cost management focused on pay vehicles like salaries, short-term incentives and annual bonuses, it said.

 “In Malaysia, 17 per cent of organisations are cancelling or delaying annual increases and 13 per cent reducing or delaying short-term incentives and annual bonuses. 13 per cent of companies are also looking at a suspension of promotion increases to manage costs,” said Korn Ferry in a statement Tuesday.

Apac rewards and benefits leader, Mary Chua said the ability to limit the impact from this global pandemic has severely stress-tested organisations in the last few months.

 “Malaysia was one of the earliest countries to introduce lockdown measures which are still in place with conditions.

 “One of its key economic pillars – the oil & gas industry – has also been considerably impacted by the sharp decline in global oil prices. Naturally, this has greater revenue implications for many organisations in Malaysia,” she said.

While companies are doing everything they can to contain people costs, they are also looking at how to provide additional work support to staff as most of their workforce is working from home.

For instance, 40 per cent of Malaysian companies have or are considering to provide allowances or to cover Wi-Fi and/or utility expenses for office-based employees who now work from home.

Within Apac, the research found that there are differences in people-related cost-containment approaches between firms in Asean and Australia and New Zealand (ANZ), with the latter taking tougher measures.

For example, only 14 per cent of Asean respondents have implemented or are considering permanent staff layoffs/redundancies, compared to 33 per cent in ANZ, it said.

 “This can be attributed to differences in the employment relationship, where Asean companies are more paternalistic and hesitant to take tough people measures.

 “Further, most economies in Asean have a large proportion of the lower-income group and to affect a material reduction in people costs will require a sizeable reduction in the wage bill or workforce, both of which are difficult to effect without significant impact to staff engagement and business continuity post Covid-19,” said Chua.