Companies appear to be taking a wait-and-see approach when it comes to making workforce or employment decisions in the economic fallout of COVID-19. A new “How Coronavirus is Affecting Broad-Based Pay and Benefits” survey from compensation consultancy Pearl Meyer indicated that respondents are not currently planning to make significant adjustments to salaried or hourly staff as they continue navigating the new business realities imposed by the pandemic.
The survey was conducted in early April and collected 369 participants, including private firms, publicly traded companies and non-profit organizations. More than 75 percent of those respondents claimed status as an “essential” business that was continuing to operate in some capacity during the COVID-19 outbreak.
One major takeaway from the survey was that only 10 percent of respondents had initiated furloughs or unpaid leave for salaried or hourly employees. Another 23 percent was considering furloughs or unpaid leave for salaried employees, with 22 percent of respondents considering the same for hourly employees.
“This pandemic impacts industry sectors differently, and its effect on pay and workforce decisions vary as well,” said Jim Hudner, managing director at Pearl Meyer, in a press release.
When asked if they had made any base salary adjustments to their broad-based salary workforce, the majority of respondents (48 percent) indicated that they had made no such adjustments, nor did they plan to do so. When asked the same question about their hourly workforce pay, 54 percent of respondents gave an identical answer.
However, the idea of salary or pay adjustments is not entirely out of the question as 30 percent of respondents said that they had not made pay adjustments to their broad-based salary workforce yet, but were considering the option. The same was said by 27 percent of respondents with regards to their hourly workforce pay.
Uncertainty like that may be par for the course as companies continue trying to find their footing in a struggling economy. “We are in uncharted territory,” Hudner said. “While organizations are assessing the short-term impact of the pandemic, they must also plan for the longer-term to ensure a quick and flexible response in the weeks and months ahead.”
The subject of employee bonuses may be included in that long-term planning. Per the survey, the majority (45 percent) of respondents have yet made any changes to planned annual merit increases covering broad-based salaried or hourly workers, but another 28 percent are still considering the possibility. Only 15 percent of respondents have already gone ahead and cancelled merit increases.
As for other compensation or benefits related actions, many companies appear to be taking a fairly restrained approach. While 14 percent of respondents said that they had introduced special bonuses or incentives for targeted employees, another 10 percent indicated that they had reduced the bonus or incentive pool for both hourly and salaried workers. Asked what other compensation or benefits action they had taken, the majority (53 percent) said that they had undertaken no other actions. When asked what options they were considering, 43 percent said that no other actions were “being considered at this time.”