Both executives and manual workers can look forward to being in the job hot seat next year as leading profitable companies review their future investment plans while many money-losing firms shed workforce to cope with lower demand at home and overseas.
Leading companies from PTT Group, Siam Cement Group and Advanced Info Service are reviewing future investment plans, with some projects likely to be suspended. On the other front, the expected fall in domestic and overseas consumption is leading many in the manufacturing sector to cut benefits or lay off workers as orders fall.
The labour market is shutting down as a large number of companies stop recruiting new staff, downsize or at best choose "optimisation" of the current workforce, confirming forecasts that a million or more are expected to be unemployed next year, compared to 450,000 now.
Many economists and securities houses believe Thailand's economy may grow 0-2 per cent next year, compared to about 5 per cent this year. The Finance Ministry estimates that every percentage point in gross domestic product (GDP) will lead to the unemployment of 300,000 workers.
"Executives will be under far higher pressure to deliver solutions to the current situation. Just to save and downsize is not at all the answer. From a different point of view, the number of fluctuations we used to see (job-hopping or changing) will drop dramatically, and headhunting will be much more difficult," said Farouk Mogheth, managing director of Start Recruitment and Jobsearch.
He noted his existing clients were either freezing all kinds of positions or having an absolute minimum number, connected mainly to finances. All positions that are mid-management and high top management are mainly frozen as companies are clearly downsizing and optimising.
Yet he also believes low-level workers are also at risk, partly because Thailand has over-employed. "This reality is assisted by the fact that HR and wages aren't that high compared to other countries in terms of salaries, taxes etc. I think the current situation will indeed force companies once and for all to rethink "over-employment" that is rampant in all sectors, by optimising their teams."
As several developed countries slide into recession and domestic demand is expected to remain subdued, Thailand's private investment may be hit. According to the National Economic and Social Development Board, private investment value in 2007 totalled Bt949 billion, which grew slightly from Bt937 billion in 2006.
The Bank of Thailand expects private investment to grow 4-5 per cent this year. To date, it still affirms the estimated 5- 6-per-cent growth rate for private investment next year, but the figure could be revised down when the new figures are revealed next month.
The Board of Investment also expects to approve only Bt400 billion worth of investment projects next year, or Bt650 billion if there is a nod for upstream steel projects. The Bt400-billion figure is even less than the Bt412 billion it approved in the first 11 months of this year.
Several companies are reviewing their investment plans.
While PTT Group, which plans to invest about Bt600 billion in the next four years, may suspend some projects, Siam Cement Group president Kan Trakulhoon recently said the group might suspend all unnecessary investment plans to save extra cash for acquisitions and necessary expenses.
Lower investment means less chance for new graduates, estimated at about 500,000 annually, to get jobs even when some companies do not have a policy of laying off existing workers. This looks imminent at a time when downsizing and optimising are key.
Asian Property Development CEO Anuphong Assavabhokhin said the company had no plan to lay off staff but would freeze recruiting next year.
"We will use this time to train our staff rather than laying them off, because we believe that staff is the best asset until the economy rebounds," Anuphong said.
Preuksa Real Estate president and CEO Thongma Vijitpongpun cited a similar policy: there will be no lay-off or cut in benefits, but recruiting new staff will depend on economic conditions.
Advanced Info Service will also recruit new staff if replacements are necessary. Siam Cement Group expects to recruit only 200-300 staff next year, one third of the 600-800 it has taken on in recent years.
Simon Matthews, country manager of recruitment company Manpower (Thailand), said joblessness in manufacturing and tourism would rise sharply as operators downsized production and employment to cope with the economic slowdown and the recent airport closure.
Tidarat Kanchanawat, country manager of online-recruitment firm Adecco Thailand, foresees no new recruitment from exporters in the electronics and automobile industries. Some may even cut workforce, and even those at manager level are at risk.
"Reshuffling job positions within an organisation may be seen more often than replacements and new recruitment," she said.
Though unemployment is expected to rise, Matthews foresees that salespersons will be the most sought-after, followed by those with knowledge of finance and accounting, Information Technology, oil and gas engineering, and logistics and supply chain.
Hewitt Associates (Thailand)'s annual Total Compensation Measurement Survey and Annual Salary Increase Survey, conducted in October, suggested that Thai employees would enjoy an average 6.8-per-cent increase in salary next year.
The figure was revised down from the 7.1 per cent in an earlier survey conducted in July, due to the global economic slowdown and the dramatic decrease in world oil prices.
The company's head of rewards practice, Surendran Ramanathan, added that if the global economic situation deteriorated further this year, actual salary increases could be even smaller as companies began to tighten their budgets.
The outlook is bleak. Though several economies are injecting liquidity into the system, leading companies are still shedding workforce because of the credit squeeze. As Thai companies are expected to face a greater impact of the global crisis next year, Thailand's silver lining lies in the new government's ability to boost local consumption and investment.
Tomorrow: Thailand's economic challenges