Despite COVID-19 Economic Fallout Pearl Meyer Survey Finds Approximately Half of Companies Have No Plans to Make Adjustments to Salaried or Hourly Staff
How is Coronavirus Affecting Broad-Based Pay and Benefits?
NEW YORK—April 15, 2020—Despite the economic fallout caused by the COVID-19 pandemic, approximately half of companies have no immediate plans to make any pay adjustments for salaried (48%) or hourly (54%) staff, according to a new survey from executive compensation consultancy Pearl Meyer.
“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.
The Pearl Meyer survey found that 22% of companies have taken staffing actions (such as furloughs or layoffs), almost a third (31%) are considering taking actions, while almost half (47%) have no such plans.
Controlling fixed costs such as payroll is a critical consideration amid economic decline. Yet, of survey respondents, only 16% have either decreased or frozen salaries, and only 7% have done so for hourly employees.
Thus far, fallout from COVID-19 has not significantly impacted merit increases. Among respondents, 18% have either delayed, cancelled, or reduced planned merit increases but almost half (45%) have not and do not intend to change planned increases.
And how is COVID-19 impacting employee benefits? The Pearl Meyer survey found only 6% of companies have reduced or eliminated employer contributions or matches to their retirement plan, but 16% are considering doing so.
"We are in uncharted territory," Hudner continued. "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.”
Conducted from 4/2/2020 to 4/6/2020 the survey had 369 respondents (182 publicly traded companies, 143 private firms, and 44 not-for-profit organizations). Full results of the survey are here: https://www.pearlmeyer.com/insights-and-research/research-report/quick-poll-how-coronavirus-is-affecting-broad-based-pay-and-benefits.
Each week, Pearl Meyer has conducted a different poll about how COVID-19 impacts business decisions. The firm is also producing other content pertinent to how businesses are managing compensation in response to the pandemic.
Additional Resources:
- Quick Poll: Will Coronavirus Affect Executive Base Salary Planning
- Webcast Replay: Conducting Business Under Lockdown: Do Your Executive and Director Compensation Programs Need to Change?