Temporary salary cut may have been better solution than resorting to retrenchments: former presidential candidate suggests to SPH

4425

Former presidential candidate Tan Kin Lian has suggested that imposing temporary salary cuts may have been a better solution to cut costs than resorting to mass retrenchments, in a Facebook post aimed at Singapore Press Holdings (SPH).

SPH cut 230 jobs recently, with 130 of them being retrenchments. There was an outcry from certain quarters when it was leaked that the media company intended to hire foreign correspondents after the retrenchments.

Sharing his experience of having to cut costs during the economic recession in the early 2000s, Tan shared that he chose to cut every staff member’s salary by 10% instead of retrenching 10% of the staff.

The salary cut was imposed on each staff member, including the CEO of the company.

Tan also gave the staff one month of paid leave every three years, during the recession.

The businessman who ran NTUC Income for 30 years said:

“My approach was to share the pain equally. I did not wish to have to retrench some of the staff, because they have families to feed.
“When the economy recovered, the salary cut was restored. And the one month of paid leave was removed.”

Tan added that his staff was able to cope with the salary cut, since the cost of living went down during the recession. He further said that while some staff chose to leave and secure better positions with better compensation, a majority of his staff chose to stay on.

Ending his post urging big companies to consider this model of cutting costs, Tan suggested that SPH specifically could have utilised this approach instead of resorting to mass retrenchment.

Tan further asserted in response to a Facebook comment on his post, that suggested that SPH is different since some jobs have become obsolete due to social media and digitisation, that:

“It does not matter what is the cause of the excess manpower. It is better to cut salary and working hours. Spread the pain. Over time, some employees will find new jobs or the economy will recover, and things will get back to normal.”

During the dotcom burst and the economic recession in the early 2000s, I have to cut down expenses by 10%. Instead of…

Posted by Tan Kin Lian on Sunday, 22 October 2017

We re-publish his post in full, in case you cannot read it above:

During the dotcom burst and the economic recession in the early 2000s, I have to cut down expenses by 10%.
Instead of retrenching 10% of the staff, I cut everybody’s salary by 10%, from the CEO down. i gave the staff one month of paid leave every three years.
I cannot remember if the salary cut was 5% or 10%, but my approach was to share the pain equally. I did not wish to have to retrench some of the staff, because they have families to feed.
When the economy recovered, the salary cut was restored. And the one month of paid leave was removed.
Fortunately, during a recession, the cost of living went down. So, the staff was able to cope with the the salary cut.
Some staff were able to find other jobs on their own at better pay. So, they were not worse off. But the majority stayed on and rode through the tough times.
I hope that big companies can consider this method of cutting cost, instead of resorting to retrenchment. Perhaps SPH could have adopted this approach?

Is SPH planning to hire 10 new foreign correspondents after retrenching 130 staff members?

42 COMMENTS

    • Tai Lo Chun , the pain he is refering to is to carry the problem with profit falling. So, the best thing for him to stop the pain of not doing anything is to stop the pain of expectaton on him to show a differential is by reducing the cost ie reduc the workforce.
      I am sorry; he does not and cannot see any pain for the workers; that’s never on his mind. It’s his paiin he is easing. That’s how an elite function.

    • My Friend working in sph says yes they are working on it and it makes sense that they retrench older people because they are offered good and high salary contracts when sph was doing well , if by reducing their salary many would kpkb more so sph retrench before they start to make loss as they foresee their printing services etc all going downwards

    • Yes , so that’s why they took action now and everyone is blaming them , having a pay cut might be a better solution but look at the people they retrench , I believe 30% wouldn’t be happy and will have a half hearted working attitude so might as well just lay them off

    • Tai Lo Chun A better solution is for the all the top management to cut their pays by 25% . The number one paper general should not be employed as he just made a miraculous escape from a sinking ship. For one who has lost billions, won’t have experience and calibre to save another sinking paper ship.

  1. What works before may not work again . At the same time , retrenchment exercises are basically a housekeeping exercise tool. That’s why u see sometimes an immediate replacement ….

  2. Easy to say. I am sure any big organisation would have thought through it. This is not your SPH mamak shop lah! Look at Kodak/Eastman colour. They were once industrial giant but they refused to see what the digital age is all about. They failed to adapt. If SPH is facing just a cyclical downturn, cutting salaries and cost surely help. However, we all know digital age will cause the demise of printing business. I am a good example. I have been a subscriber of ST for years but with the advent of internet specially after 2000, I have dumped the printed papers for online news. I am sure many like me did it too! Perhaps SPH can re-train those affected but training takes time. The only way modern men and women stay employable is to be multi-skill. Yes, it takes effort and determination but it ensures you are on top of the game. Please take advantage of the government SkillsFuture courses!

  3. Those SPH retrencehed staff didn’t upgrade themselves with skillfuture courses to keep in pace with developing job requirement?

    isn’t that what the SPH has been telling the people?

  4. It reflects on the type of leadership SPH suffers from…a better leadership team would have considered the option TKL suggests…better everyone suffers a little than a few made to suffer a lot by themselves. Particularly since a viable plan or solution has been decided upon. Boo SPH, Boo!

  5. The government cannot base on present system. It’s old system which must change.
    We cannot have majority controlling and doing whatever they like.
    They cannot just put so many Incapable people in the ministry and government putting whoever they like.
    We must have the right to evaluate these people.
    We can get ripe of Incapable people.
    Salaries must be what the government says, “of world standard.”
    Not their “Heavenly Standard.”

  6. Dato Leond SAYS REPLACING DEADWOOD WITH CHEAP FOREIGN TRASH DULY SECONDED BY NTUC.

    DO YOU KNOW THAT NTUC IS ROTTON GOVT’S CRONY AGENCIY WHICH SUPPLIES ALOT OF CRONY MIW MP AND MINISTERS INTO THEIR WAYANG PERFORMANCE STAGE IN THE PARLIAMENT?

  7. The CEO and the TOP mgmt ought to be retrenched cause they failed to meet the target.. when u do spring cleaning u start from the TOP of the house and not bottom up.. this is Singapore where the TOP is most of the time safe ? Iron bowl… retrenchment should be done when the company is losing $$$ not making less profit.. crap..system.

  8. Time changes, old Systems must change.
    There must be “levels” to make sure everything is done properly.
    We have to move with the world not with monopolies and cronies.
    We cannot let “passing batons” in Government.
    Other countries are moving forward we cannot just stay put.
    Lagging behind.
    Like in indonesia, I have told my Indonesian friends, one protest a day.
    The country is losing a lot.
    Nobody dares to invest.
    Protest brings the country lag by at least 2 to 3 years.
    Not happy, write a petition and make sure the government look into it.

  9. In today’s world there are no such thing as “Monopoly”.
    Work for your money when we are young.
    Enjoy our fruits of labor when we are old.
    We deserve it.
    Lead the correct way of life.
    Teach our children and generations to come to be good and contented.
    Be kind and respectful.

  10. If this retrenchment is a restructuring exercise, then those retrenched should be given the opportunity to reapply for positions made available.

    Retrenching and then turn around to hire foreign workers; that’s plain bullshit.

  11. Not sure whether he understood the biz challenges facing SPH in the digital world. The present and past executives of SPH had been extremely well paid to do “nothing” and were not concern about
    the future direction of SPH and the challenges of the digital and social media world. This chap “Tan” obviously commented without comprehending 2 things; a. How to change the scope and types of media, news and social communications tools to make SPH relevant to Singaporean new generation, and b. Retrenchment or “Downsizing” is a must as SPH is over-staffed from top to bottom – who and when to downsize is a separate issue. Seen several corporate restructuring – there is a tendency to retrench “junior staff” to meet the headcount number of 10% reduction – sadly, that does not fix the inherent problem of “ineffective and useless top management”. I think SPH should seriously review that top talent it has in the executive level and also its editorial staffing. Pointlessly if you retrench a secretary or a printing operator…… it will change the day!

  12. Why do they even have to resort to salary cut? The company is still profitable. Retrenchment and salary cut only make the Board happy and secure the salary of the Paper General.

Comments are closed.