Recession – an employer’s perspective

The saying that “When America sneezes the whole world catches cold” has once again proved to be correct. Wall Street giants fell like a pack of cards. We were assured by our Harvard educated Finance Minister that India was insulated from such catastrophes and also from the resultant recession. But in India Astronomical salaries, business class travel, luncheons at five stars have paved way to cost cutting, hiring freeze, lay offs and pay cuts. Recently a newspaper carried an article which read that a company had stopped purchasing toilet paper as a cost cutting measure. This leads us to a logical question? Is the situation that bad to warrant such drastic measures or is it a knee jerk reaction from the corporates? A million dollar question.

An economist remarked “Cash is the oil of the 21st century”. Corporates are faced with plummeting sales, piling up of inventories, increasing input costs and to add fuel to the fire, interest rates are sky rocketing.

Sales not improving the only measure left with the corporates are to cut the costs. As Mr.Azim premji has remarked all discretionary costs need to be cut. But what are they? Foreign travel, lavish parties, entertainment costs, certain staff welfare costs and last but not the least employee costs. From an employer’s perspective this looks extremely logical. Employees need to stand by their employers during these trying times rather than throw stones at them. Remember employees benefited the most during the boom.

It’s the darkest before dawn and tough people stay, tough times don’t!!!!