However, the great majority of employers are likely to use the current slump not so much for self-sacrifice or surprising generosity but for a savage war on costs. But employers are beginning to come to grips with what they need to do. I'm afraid it might get a lot uglier this year before it improves. Nechita, the human resources executive for FMC, says businesses will undoubtedly use this period of slackened demand to cull substandard performers. We're doing that, sure.
Companies have to be tougher on performance.
Especially if they're paying salaries above market rates, they will demand results. One favorite target of cost-cutting is perks. In South Korea, corporate golf club memberships and chauffeured cars are becoming things of the past. Daewoo has cut travel allowances and forced executives other than the CEO to fly economy rather than business class. And chief Kim Woo Choong now takes business class, not first class.