Companies boosting pay to help staff

Spiralling inflation is depleting the purchasing power of money in people's pockets.

Transportation costs are growing, with no end in sight to rising fuel prices, and with every meal, food is costing more. As well, people are haunted by concern over their ability to afford life's other essentials.

A survey by The Nation has found that many of Thailand's employers, in a bid to help their employees cope, are adding cost-of-living allowances of between Bt600 and Bt2,800 to monthly salaries.

PTT labour-union chief Natakorn Kaewdee said PTT's executives would meet tomorrow to discuss the union's request for cost-of-living allowances of up to 6 per cent of salaries, or Bt5,000 per month, to employees up to C9 level.

Consideration of the request is expected to take up to one month and the rate will be fixed by executives, he said.

In 2006, Thailand's largest energy conglomerate paid a cost-of-living allowance of Bt1,000 per month to employees up to C9 level, but this has since been discontinued following a significant salary hike.

A high-ranking official at Siam City Cement said his company would pay its employees Bt600 per month as a cost-of-living allowance effective from the end of June.

"I think the extra Bt600 will be sufficient for the cost of living in the current atmosphere," he said. "However, we will always monitor the inflation rate."

The Siam Cement Group (SCG) said it would pay an allowance of Bt600 per month, effective from May 1.

"The company will continue to follow up the cost of living. If the prices of essentials change so much that employees are hurt, the company will consider the [level of the] allowance as it deems appropriate," SCG said.

There has also been a rapid response to the higher cost of living in the banking sector, with many commercial banks giving their employees extra money to help them cope with rising prices.

Starting next month, ACL Bank will pay a special allowance of Bt1,500 a month to employees whose salaries are lower than Bt25,000 per month and Bt1,000 per month to employees making between Bt25,000 and 30,000 per month.

Bangkok Bank has paid a special Bt1,000 allowance to its employees since February, but its labour union has asked that it be raised to Bt2,000. Starting this month, Kasikornbank increased to Bt900 its welfare allowance to employees.

Siam Commercial Bank has been giving its employees an allowance of Bt500 since March and will add another Bt600 next month because of the higher cost of living.

Thanachart Bank and Siam City Bank began paying monthly allowances of Bt1,000 and Bt500 respectively to their employees this month.

Krung Thai Bank, which last October increased the income of its lower-salaried employees by 4 per cent, is now considering a cost-of-living allowance for staff receiving less than Bt25,000 per month.

"It's necessary to help low-income people in times of high inflation and high living costs. Even though salary promotion may support high inflation, it's better to help people than to ignore [them]," said president Apisak Tantivorawong.

Insurance companies have also been quick to help their employees, although some of them find the "perks" they have been offering their employees come in handy during tough times.

In the insurance market, where the practice of headhunting is widespread, salaries have always been competitive and companies strive to revise and update employee compensation. But this doesn't always translate into more baht in the bank. Krungthai Axa Life Insurance, for example, offers shuttle-bus services for its employees to and from Skytrain and subway stations.

Other notable incentives offered by KT-Axa are opportunities to buy or get options or shares of the Euronext-NYSE-listed parent company, and after-work activities such as football and yoga. There are also plenty of training opportunities regionally and at the company's Paris headquarters.

In the media industry, special allowances have been a recent hot topic.

Thai Rath has offered its employees a one-year solution. Those with monthly salaries lower than Bt13,000 will get a special allowance of Bt2,800, while those receiving Bt15,000 to Bt20,000 will get Bt2,500. Employees with salaries from Bt20,000 to Bt25,000 will get Bt1,800, while those being paid more than Bt25,000 per month will get Bt1,500.

Management of the Matichon Group is considering the structure of employees' salaries and bonus payments. It is expected to pay a higher bonus in the first half of this year, equal to two months' salary. This is higher than the normal bonus payment of one and a half months. Matichon usually pays bonuses totalling three months' salary for the entire year.

The Post Publishing Group, publishers of the Bangkok Post and Post Today newspapers, will next month offer its employees an allowance that floats with fuel costs. Usually, its staff are paid around Bt6,000 for transport costs. This allowance will be changed to equal the current cost of 207 litres of premium gasoline 95. If the price falls below Bt29 per litre, the transport allowance will revert to Bt6,000.

Companies that pay high staff salaries, including foreign banks and brokerage firms, appear to be less inclined to pay additional allowances for the higher cost of living. Citibank (Thailand) and Standard Chartered Bank (Thai) said they were considering the issue, while HSBC in Thailand said it didn't pay special allowances.

A securities firm source said most brokers had not discussed staff allowances for the cost of living.

The Bank of Thailand, where staff salaries are adjusted for inflation every year, has a different view of special payments.

Central-bank director Amara Sriphayak said raising allowances for employees would help restore demand, which had been falling.

However, rather than boosting demand, businesses should boost the supply side by considering logistics, productivity and alternative energy.

This will help balance the current situation, in which demand is higher than supply.