Staff Benefits: Should we review it again?

The current global downturn has forced companies to start looking for cost-cutting measures. Among them, job cuts appear to be one of the hot favorites. Job cuts, however, is not a silver bullet. While it helps companies save costs, it also causes unemployment-related social issues: loan-defaults and suicides are just some of them.

To be socially responsible, I believe that companies should look at other measures and use job cuts only as a last resort. One measure that comes to my mind is review of staff benefits. For a long period of time, companies have literally been showering luxurious benefits on their staffs: business class travel, 5-star hotel stay, S$40 meal, etc. Many of you may think my proposed measure comes a bit too late and companies with logical management would probably have implemented it long before I propose it. I have to admit I thought the same initially.

However, many of you will be surprised to find that most of those luxurious benefits are still in place, even for some that have completed the supposedly rigorous review process. Worse, they exist in organizations that have been largely blamed for the current situation: banks. I have a friend who works with an international investment bank and will be traveling to London on a fully-sponsored S$7500 business class. The same friend is also staying in a 5-star hotel, courtesy of the bank, for one week prior to his departure. The only thing that hurt him is the reduction of his meal allowance from S$40 to S$20 per meal, which is still a lot considering the packets of chicken rice he can get from hawker centers or super-value meals he can get from McDonald’s. My point is: how many people on the street spend $20 for a meal everyday?

Banks have said there is a limit to the reduction of staff benefits that they can implement because of the need for talent retention. But clearly this reason is not strong enough to justify retrenchments. Is it morally okay to retrench people so that you can then use the cost savings to sustain your extravagant life? Surely, more adjustments to the staff benefits could be done. In my friend’s case, the bank could have let him fly economy and put him up in a 3-star hotel instead. The amount of savings, estimated at S$6000, could have been used to prevent another employee from losing his job for 2 months (assuming his salary is S$3000 a month). The meal allowance could have been further reduced. After all, a full meal in an average place such as food courts and hawker centers only costs between S$3-10.

To companies: Please be socially responsible. Sacrificing those luxuries to save jobs is much better than job cuts and its related social issues.