KARACHI: Real wages have not increased for most of the salaried class as inflation balloons to double digit levels.
Due to the economic downturn, many businesses have been forced to lay off employees.
Keeping in mind the rising cost of transportation, two major players in the banking sector have devised relief measures for employees. HBL and Bank Alfalah both have announced financial assistance.
HBL is providing it in two tranches in August 2022 and October 2022. This will be provided to over 15,000 employees at the Senior Manager level as well as under. Speaking to Profit, Ali Habib, Chief Marketing & Communications Officer at HBL says that the salary and position is taken into account when devising the formula for this interim Ad-hoc support.
Bank Alfalah, on the other hand, has announced an ad-hoc inflationary allowance for six months effective from July 1, 2022. The bank has announced EVP I to EVP III grades to get 11.25% of their basic remuneration in addition to their salary. Similarly, 15% FOR AVP I to SVP II, and 15% for OG I – OG IV along with a non-management stand which includes clerical and non-clerical.
HBL and Bank Alfalah will announce relief measures for outsourced third-party staff other than security guards and janitorial staff separately.
Profit has understood that HBL employs approximately 2500 individuals through third-party contractual services, in addition to its 16,000 full-time staff.
In addition to this financial help, HBL is providing all employees with the facility to avail a motorcycle loan of up to PKR 200,000 at 0% markup. “The facility is available for both electric and conventional motorcycles. However, we strongly encourage our staff to go for electric bikes as it also goes with our goals of encouraging clean energy and keeping the national energy crisis in mind,” says Habib.
He reiterated the decision to provide this facility for all employees because of “HBL’s unwavering commitment to its staff.” HBL is in talks with manufacturers of electronic bikes in order to help them increase their supply, he added.
Keeping in mind cultural pressures, women working at HBL may take this loan facility but might choose not to drive these bikes to work themselves.
The bank has also announced an in-house carpool solution to allow HBL employees to share the vehicle amongst themselves which will be launched soon. “The HBL tower at I. I. Chundrigar is home to more than 1000 employees so the possibility of carpooling can help.”
Moreover, HBL has enhanced reimbursement for official travel to PKR 30 per km for cars and PKR 10/km for motorcycles.
Profit asked both HBL and Bank Alfalah the total financial impact of these decisions. The latter did not respond while HBL said that they could not give an exact value.
It is important to note that this interim ad-hoc relief is for the short run. Moreover, as prices remain downward sticky, employees may go back to feeling pressure because of inflation following reversal of relief.
This suggests that the motivator behind such steps is primarily fuel prices. As fuel prices are expected to decline following increased supply and better geoeconomic decisions, HBL and Bank Alfalah might feel the relief will no longer be needed.
Remote work, for this sector, is not as easy for other sectors due to stringent data privacy laws.
However, it is important to note that while the manufacturing sector across the country is laying off production staff, there is a reduction or halt in output as a result of lack of imported inputs; the service sector does not have such issues.