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While the humanitarian and economic toll of the COVID-19 global pandemic continues to grow, many organizations have shifted their focus from crisis management and business continuity to planning for a safe return to the workplace and a new normal for business operations. This also means planning for an inevitable economic downturn and controlling costs in an unstable environment. Against this backdrop, a key question has risen to the forefront — how do we navigate incentive decisions during times of uncertainty?
Many large, leading companies across Southeast Asia are making headlines regarding recent pay cuts and delayed bonuses in response to the COVID-19 pandemic, which has created pressure for other firms to take similar actions. However, finding the right compensation method for your firm can be challenging. It’s important to look beyond the noise of the media and what the said “majority” are doing and respond based on the unique circumstances, data and facts that are relevant to your business.
Within the Asia-Pacific (APAC) region, results from Aon’s third COVID-19 pulse survey, published on May 6, 2020, revealed that 80% of companies are moving away from the crisis management phase and are now focusing on business continuity or planning for the future. Among these companies, 14% have adjusted their short-term incentive (STI) targets and 25% of companies are making adjustment to their long-term incentive (LTI) plans. We further explored these issues during our recent webcast, Navigating Pay Decisions During Uncertainty.
This article takes a closer look at the implications of an uncertain economic outlook and shares tips for how to recalibrate your short- and long-term incentive strategies to position your firm for future success.
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