Many industries were hard hit after several governments declared a total lockdown. Prime Minister Narendra Modi addressed the nation and urged Indian business leaders not to reduce their salaries or let employees go through difficult times. A Ministry of Labor and Employment issued an advisory highlighting the importance of continued employment benefits to maintain social stability. The hospitality industry is still unsure whether to reduce salaries or ask employees to take leave.
Millions of jobs are at risk from the current situation. The spread pandemic will cause major changes in people’s lives. According to the National Sample Survey (NSS), more than 136 million jobs outside of agriculture were at risk as of March 31, 2020. The most vulnerable were workers without formal employment contracts, casual laborers, and those who work in small businesses or the self-employed.
Layoff Vs. : What to Choose?
Restaurant owners are faced with deciding whether to cut staff or lay off employees to reduce the risk of losing revenue. Since cash flow is virtually non-existent, it’s imperative to reduce salaries. Restaurant owners and others in the hospitality industry have been hard hit. It is essential to figure out how to maintain their businesses. Uncertainty makes it difficult to plan for the future.
The Current Scenario
The Prime Minister has appealed to businesses not to lay off employees. There has been a conscious decision by the hotel industry to follow his lead. The 25% planned pay cut for hotel employees is being held off.
“Hotel chains are now wary of making announcements without prior notification from the labor department. There have been stating shutdowns and closures due to the outbreak. According to an executive who declined to be identified, “Any immediate announcement by chains at the moment like this will seem counter-intuitive.”
What are Other Restaurateurs Doing
Ranbir Nagpal is a partner at Yazu Pan Asian Supper Club in Mumbai. He stated that the company does not plan to fire anyone until April 15. However, if the current situation persists, the firm may have to fire some employees.
Sandeep Trehan (COO of luxury resort Karma Lakelands) shares the same sentiments and believes there should be an immediate freeze on hiring. He also proposes minimal layoffs during the lockdown. Cuppa, a Bengaluru-based cafe chain that serves coffee in Bengaluru, and Enchante Patisserie also believe in their employees.
When it comes to paying cuts and layoffs, it is a difficult decision. Retraining other employees is a way to keep the best employees. Retaining them is crucial for your business’s future, no matter how harsh this might sound. It is becoming a common practice to cut back on employee salaries while retaining employees. It doesn’t matter how large or small your restaurant is. It will always be difficult to let go of your workers/laborers at such an important time.
It is a hard decision to make between layoffs and pay cuts. It all depends on your business size and overall business outlook. It is important to remember that even if you have to lay off employees, ensure they receive enough money to survive in difficult times. Let’s fight this pandemic together.