IIC asks companies to prioritise job preservation

PETALING JAYA: The Institutional Investors Council Malaysia (IIC) said its investee companies should prioritise job preservation by adopting a “Jobs First” strategy in all its measures to ensure business sustainability.

The IIC which represents the common interests of institutional investors in Malaysia said that the Covid-19 pandemic is unprecedented in modern history and is of concern to the economy as a whole.

“Amid the volatile financial market reaction stemming from the health crisis, the IIC is very cognisant of the struggles that our investee companies are facing,” the IIC said in a statement yesterday.

“While IIC understands that desperate times will call for desperate measures, it maintains a strong viewpoint that all its investee companies should prioritise job preservation,” it added.

The IIC said it views with great concern the current extremely challenging economic conditions that not only Malaysia but of which the whole world is experiencing.

The IIC said that under such circumstances, it hopes that all its investee companies would explore every other measure and implement them before making any decision that may affect the job continuity of their present employees.

It added that it is their belief that its investee companies should show their sincerity to ensure their employees are able to keep their jobs during the current trying times.

“This form of social obligation is essential at this point in time given job misplacement will have harmful impact to both the family institution as much as it does to the economy,” said the IIC’ chairman Rohaya Mohammad Yusof.

An analyst said that the approach taken by the IIC could be a longer term approach in view of the dire economic situation, supportive of the government’s expectations.

“However, eventually I believe that the companies themselves would need to be realistic on the state of affairs and job losses may not be avoidable unless the government steps in and takes over the wage bill during these difficult times,” the analyst said.

“Bear in mind that wages are usually the biggest cost component in most companies’ financial statements and fulfilling this portion of the cash flow is very urgent. This is why it is always important for the government of the day to constantly prioritise saving a portion of money during the good times that can be deployed for a rainy day like now,” the analyst added.