Sectors such as the aviation and hospitality have already gone in for significant downsizing of operations and with it, reductions in staff salaries/allowances. On Monday evening, flydubai announced it would cut salaries for the next three months, while Abu Dhabi’s Etihad Airways said it would effect between 25-50 per cent cuts in wages for April.
Hotels in the UAE too have been letting go of all non-essential staff, for what looks like an extended period until demand returns to some normalcy.
The retail sector, for now, has not had any major lay-offs, but the ceasing of commercial activity is telling heavily on their bottom-line.
In comparison, banks in the UAE seem to be better prepared, since most of them had already gone through major workforce restructuring in the last year and more. Abu Dhabi Commercial Bank said it would not have any layoffs stemming from the COVID-19 outbreak, which is also what Ajman Bank stressed in a statement it put out this week.
Send a clear message
Companies thinking of downsizing or wanting to cut down their wage-related expenses should make things clear with their workforce.
“Employers must do so only after consulting with the employees and getting them to agree for a salary cut considering the extreme circumstances,” Luke Tapp, Partner and Head of Middle East employment practice at Pinsent Masons, a law firm. “People want their leaders to be honest with what actions are being taken.
“They also want to know what the plan is to eventually return to normal operations."
And businesses are trying to provide as much information as is possible, even though they realise circumstances could change within days or weeks. Danube Properties has halted all recruitment to cope with the current situation. “It’s important for us to take care of the staff and infrastructure rather than expand our workforce,” said Atif Rahman, Director and Partner.
“We are confident that once the market recovers from this global emergency, we will start hiring again. Danube Properties supports thousands of jobs in contracting, sub-contracting, supply, building materials and the furnishings industry.”
The ‘remote’ challenge
Businesses, here and elsewhere, are also learning on the job, so to speak. The restrictions on movements and people contact required businesses to allow their staff to work remotely. Some of the multinationals already had contingency plans in place well ahead of the virus crisis, but local businesses are having to go through a steep learning curve. And with no clue as yet as to what could be on the other side.
A GulfTalent survey found that many were scrambling to get set up technically to allow their staff to sign in from their homes.
Employers are also legally justified in asking employees to isolate themselves while working from home. Besides following the UAE government’s directives for home quarantine, companies also have an obligation towards the health and safety of their employees.
When will things head back to normal?
For now, businesses are intent on surviving the virus outbreak and what it’s been doing to their operations. Getting back into operational health will, of course, depend on how long the shadow of the COVID-19 lasts.
Vijay Gandhi, Regional Director at the recruitment consultancy Korn Ferry Digital, is one of the optimists.
“We anticipate that by early September, the “new hire” job market will be back to normal,” he said. "Companies will be setting budgets and looking ahead to planning for the new financial year.
“They will be returning to normal strategic planning for future growth and market development.”
Whether the future pans out the way Gandhi says it can only be known once the severity of the current crisis starts to taper off. What companies can do now is make sure their short-term reaction doesn’t impact their ability to retain their best employees over the long-term.
