West cuts down on jobs, while Asia on pay
As a global recession starts to spread, employees in the west, from bankers to factory staff, face the gloomy future of losing their jobs. For the people facing the same prospect in the East, the suffering comes more from the pay cut.
Human resource experts explain culture differences is the reason for Asian firms’ efforts to preserve jobs in difficult times, which may lead to unemployment or may keep Asian economies up under the situation of slowing exports.
The East culture may also help firms recover quickly from the recession since they will not need to reemploy or train new staff, making a prediction of a Western shift to Eastern thinking pattern.
“In the Confucian mindset, the right thing to do is to share the burden. There’s that sense of collective responsibility whereas in the West, it’s more about individual survival,” said Michael Benoliet, associate professor of organizational behavior at Singapore Management University (SMU).
In Hong Kong, senior staffs at CLSA, the Asian brokerage branch of Credit Agricole, have voluntarily agreed to a pay cut of up to 25 percent to resist the danger of redundancy. CLSA made similar cuts in 2003 under the gloomy business caused by SARS.
A Western CLSA employee told Reuters disguisedly that he accept the cut in fear that he may be viewed as “scum” if he did not agree.
Singapore’s chartered Semi-conductor also practiced temporary salary reduction of 5 to 20 percent after suffering a loss, putting most hit on senior management. And in Japan, chipmaker Elpida’s chief executive suffers a pay reduction of 50 percent.
Steven Pang, Asia regional director for Aquent, a head hunting firm, said in many East Asian companies there was a sense of obligation to “take care of members of the family and go through the pain together” even if that lead to losses.
In contrast, Western companies often felt compelled to show clearly to the investors that they were making serious efforts to cut cost, Pang said.
US firms from General Motors to Goldman Sachs make plans to lay off workers by the thousands, but in their Asian branches the jobs cut will probably less severe.
Firms have to adapt to various labor practices of the countries or regions they operate in, which means they may be restrained in cutting jobs fearing that its popularity may be hurt.
Mark Ellwood, who heads the Singapore, Malaysian and Thai operations of Robert Walters, an executive search firm, said labor laws in most Western nations are in favor of employees, making it difficult for firms to cut salary without incurring lawsuits from upset employees.
“In many cases, it’s easier to make the retrenchments.”
Labor law in Easter Asia more favors employers, making them able to be more creative ant there was also the government and public support for saving job.
Japan’s unemployment rate was 4 percent in September, up from 3.8 percent in January, while Hong Kong witnessed a flat rate of 3.4 percent. But US jobless is predicted to have jumped to 6.3 percent last month from below 5 percent in January.
Experts say that while there are apparent differences in labor practices between East and West, the gap will narrow with the growth of multinational companies and the forced adoption of most beneficial practices form competitions from rivals from abroad.
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