It is well known to us that the recent US financial crisis has affected the whole world, mainly those countries that have direct business relation with US. The banking sector is the one that has mostly got affected with the financial recession and in order to rescue the banks, which are the financial backbone of the country, the sates have been pumping its funds to them. The time has come to evaluate the present banking system, and I believe that only an Islamic banking (Interest-free banking) that many countries has adopted is the demand of the time to get rid of such kind of financial problems in future.

This recession has greatly affected the Real Estate business followed by others. Human resources are direct victims of the crisis. Private companies may have to go for cost reduction that will include termination of the services of many employees. However, I would like to suggest here that our Indian companies in particulars and others in general should not make “Head-cut”. There are many ways to reduce the costs such as expenses in business travel, stationeries, rentals, refreshment, PR, bonuses and incentives, etc. If such reduction in cost does not bring betterment in the situation, the 5 to 15% reduction in the basic salaries of all staff (from top to bottom) can be considered. In no case, “termination of services” should be a tool to reduce the cost unless and until the work force is in surplus. Termination creates a wrong impact in the mind of man and a few can show perseverance in the face of hardship. Employees work as a team. When the team can enjoy financial well-being of the companies in the form of bonuses and salary increase why they cannot accept the financial crisis of the company by getting lesser salaries and incentives. When the situation will develop, they can get it back, and may be more. As for new recruitment, it can be put on hold for time being or it can be cautiously taken.

Gheyas Hashmi
Jeddah