1 / 26

Employment Adjustment Strategy for a Property Development Company during Economic Crisis

Employment Adjustment Strategy for a Property Development Company during Economic Crisis. Associate Prof. Sonthya Vanichvatana, Ph.D. MRICS, Associate Architect. Introduction. Many questions arise including the following:

decker
Download Presentation

Employment Adjustment Strategy for a Property Development Company during Economic Crisis

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Employment Adjustment Strategy for a Property Development Company during Economic Crisis Associate Prof. Sonthya Vanichvatana, Ph.D. MRICS, Associate Architect

  2. Introduction Many questions arise including the following: • What approaches business management, strategy, and/or activity should be employed to reduce employment cost during economic crisis? • Are there any similarity and/or difference in term of employment adjustment approaches between the economic recession situation during A.D. 1997 – 2000 and 2008 for real estate developers? Sonthya Vanichvatana

  3. Research Objectives • To study approaches for employment adjustment during the two economic crises in Thailand, • To analyze different approaches against • product type (low-rise, high-rise, and mixed products), • the size of capital, and • the business experience (year) and • to compare the similarity and/or differences between the two economic crises Sonthya Vanichvatana

  4. Research Scope • Focus on the surviving strategy applied during the 2 economic crises: (1) during A.D. 1997 – 2000 and (2) during A.D. 2008 – 2009 and beyond. • The survey will focus on residential real estate development companies for sale, covering both low-rise (single detached house, duplex, and townhouse) and high-rise (condominium). • The survey will cover the real estate development companies that have the memberships of the three main real estate professional associations in Thailand. The members of these three associations cover the majority of the market share, especially Bangkok and Metropolitan. Sonthya Vanichvatana

  5. Literature Review • Impact of Layoffs • Impact on Participants • Job layoff victim: self esteem • Survivor employee • Firm reputation and management: stock price, HR • Impact on Cost • Decline productivity or quality of firms • Rehiring and retraining costs more than offsetting the short-term saving from reduced payroll expense • Impact on Firm’s Knowledge • An organization’s talent is a company’s primary source competitive advantage • An individual leaves a firm taking away some piece of knowledge that supported he/she in performing the tasks associated with the job Sonthya Vanichvatana

  6. Literature Review (Cont.) • Employment Adjustment Through: payroll cut for management, bonus cuts, reduction of overtime, freezing new hires, dismissal of part-time workers, early voluntary retirement, reassigning and dispatching of surplus workers to subsidiary or affiliated company and reassignment of surplus workers to different sections of the same company • Benefits on Cost: • Provide ways to maintain the established professional relationships which have taken much time and financial resources to build • Allow employees to return to the company when the economy improves, thereby avoiding direct rehiring and training costs, and indirect costs associated with new employee assimilation and adjusting to new work environment • Benefits on Firm’s Knowledge • Retaining their employees is retaining their knowledge and expertise Sonthya Vanichvatana

  7. Literature Review (Cont.) • Employment Adjustment (Cont.) • Japanese Employment Adjustment Aid Subsidy • Provided by the Ministry of Health, Labour and Welfare • Available to business owners who, due to a contraction in their business activities caused by economic reasons related to fluctuating business cycles or changes in the industrial structure had to place employee on leave or transfer employees Sonthya Vanichvatana

  8. Literature Review (Cont.) • Employment Adjustment Practices during Economic Crises in Thailand Vanichvatana and Peungchuer (2009:1) qualitative research through in-depth interviews with real estate developers for strategies, techniques, and/or activities to survive during the two most recent economic downturns in Thailand.Benefits on Cost: • A part of the interview questions is about strategy to manage cost of a company. Sonthya Vanichvatana

  9. Literature Review (Cont.) Sonthya Vanichvatana

  10. Literature Review (Cont.) • The Characteristics of the Two Economic Crises in Thailand Vanichvatana and Peungchuer (2009:1) Sonthya Vanichvatana

  11. Research Methodology Research process Extends the previous work of Vanichvatana and Peungchuer (2009) with quantitative research to examine the norm of the real estate industry in Thailand. Quantitative Analysis To envision to norm conduct of the real estate industry in Thailand through questionnaire survey. • Descriptive Analysis • Chi-Square Tests Sonthya Vanichvatana

  12. Hypothesis • Real estate development company use many employment adjustment approaches • There are differences in employment adjustment strategies between the two economic crises Sonthya Vanichvatana

  13. Variables [1] The current currency exchange rates are as following: 1 USD = 34.5 Baht, 1 AUD = 27.3 Baht, 1 GBP = 56.5 Baht, and 1 EU = 45 Baht. Sonthya Vanichvatana

  14. Variables [1] The current currency exchange rates are as following: 1 USD = 34.5 Baht, 1 AUD = 27.3 Baht, 1 GBP = 56.5 Baht, and 1 EU = 45 Baht. Sonthya Vanichvatana

  15. The layoff situations for the property developer respondents during 1997-2000 are more severed than those during 2008-2009 Findings: Layoff Sonthya Vanichvatana

  16. The payroll reduction approach situations for the property developer respondents during 1997-2000 are more severed than those during 2008-2009. Findings: Payroll Reduction Sonthya Vanichvatana

  17. During the 1997-2000 crisis, the respondents imposed the more sever approach of ‘Payroll Cut’ than during the 2008-2009 crisis. In the other hand, the more compromise approaches of ‘Reduction of Overtime’ and ‘Reduction of Bonus’ are applied during the 2008-2009 more than during the 1997-2000. Findings: Employment Adjustment Approaches Sonthya Vanichvatana

  18. The ratio is similar in both crises for imposing Dispatch staff to subsidiary or affiliation company Findings:Move Staff Sonthya Vanichvatana

  19. Findings:Relationship between Employment Adjustment Approaches and Real Estate Developers’ Attributes • Chi-square tests for any relationship between the defined independent variables and dependent variables Sonthya Vanichvatana

  20. Findings:Relationship between Employment Adjustment Approaches and Real Estate Developers’ Attributes Sonthya Vanichvatana

  21. Findings:Relationship between Employment Adjustment Approaches and Real Estate Developers’ Attributes Similarity: • ‘Layoff’ variable has no significant relationship with any independent variables during both economic crises. • Both independent variables of ‘Exp_Cat_No’ and ‘Fin Source_1’ (Share holders) have no significant relationship with any dependent variable. Sonthya Vanichvatana

  22. Findings:Relationship between Employment Adjustment Approaches and Real Estate Developers’ Attributes Similarity: • There are two similar pairs of dependent-independent variables in both crises: • ‘EmployAdjust_2’  ‘Fin_Source_2’ =‘Reducing overtime’  ‘Supplier credit’ (as a source of finance during economic crisis) • ‘MoveStaff’  ‘Fin_Source_5’ = ‘Move staff to subsidiary or affiliation company’  ‘Expedite sale and transfer of finished units in the stocks’ (as a source of finance during economic crisis) * (Vanichvatana and Peungchuer, 2009:2) ‘Expedite sale and transfer of finished units in the stocks’  ‘High capital-category company’ * Any possible link between ‘Move staff to subsidiary or affiliation company’ and ‘High capital-category company’ ? Sonthya Vanichvatana

  23. Findings:Relationship between Employment Adjustment Approaches and Real Estate Developers’ Attributes Differences: • Only during the 1997-2000 economic crisis, two dependent variables related to payroll cut, ‘Payroll97’ and ‘EmployAdjust97_1’ (payroll cut) have significant relationship with independent variables • Independent variables of ‘Capital_Cat_No’ and ‘Product_Type_No’ have no significant relationship with any dependent variable Sonthya Vanichvatana

  24. Conclusion The results from the quantitative analysis can be concluded as follows: • Real estate developers applied many types of measures for employment adjustment during both economic crises • Respondents imposed more disturbing approach to reduce employment costs during the 1997-2000 economic crisis than during the 2008-2009 crisis Sonthya Vanichvatana

  25. Conclusion (Cont.) • For layoff and payroll reduction approaches during the 2008-2009 crisis, respondents use less disrupt options for approaches than during 1997-2000. In other words, for layoff during 2008-2009, there is more proportion that chosen no layoff plan and no layoff yet plan than high percentage of layoff proportion. It is also similar for types of payroll cut plan • The approach for Dispatching staff to subsidiary or affiliation are similar in both crises Sonthya Vanichvatana

  26. Q & A Sonthya Vanichvatana

More Related