2020 Staffing and Compensation Planning in Response to Covid-19

In early May 2020, JER HR Group conducted a survey of our clients and contacts to identify the staffing and compensation actions they were planning in response to the coronavirus pandemic.  The survey yielded 45 responses, mostly from small companies with fewer than 50 employees – the majority from the New York City and North Carolina labor markets.

Some clear trends were identified in the survey responses:

• Nearly 65% of respondents plan to encourage or allow employees to work remotely on a regular basis and 60% will encourage or allow at least a partial telework schedule.
• Half of the respondents report employing multiple staffing strategies, including remote working, furloughing staff whose jobs are not able to be performed remotely, and reduced work schedules.
• 70% of the respondents were planning to freeze salaries for the remainder of 2020, while 12% planned reductions in salary on a temporary basis.
• Only 10% reported that they were planning to provide cost-of-living adjustments to staff, while 6% plan to give regular increases.
• 48% are eliminating nonessential staff travel as a cost containment strategy.

A Fundamental Shift in Thinking about Remote Work

As employers across the United States review their options for returning to the workplace, it is clear there has been a fundamental shift in how they think about work.  Many employers that had previously allowed remote work only on an occasional basis are rethinking and rewriting their policies to recognize that, in most cases, employees have been as productive working from home as in the office – perhaps even more so.

Some advice in updating your teleworking policy if you choose to relax restrictions on remote work:

• Include language that the change in policy reflects current circumstances that clearly lend to an environment where teleworking is in the best interest of the company; and
• Include a caveat that the company will periodically review its circumstances and reserves the right to modify or revoke the teleworking policy if it no longer supports the company’s best interests.

Several participants in our survey report that, in view of their companies’ increased ability to work remotely, they are evaluating their office space needs and are considering such options as subletting parts of their space or renegotiating their leases.

Salary Hesitation as We Move to the “New Normal”

With regard to salary planning for the remainder of 2020, much will depend on the economic outlook as companies find their new “normal” in operations.  As noted, in early May, 70% of our survey respondents planned to freeze salaries as a precautionary measure.  Decisions will depend on the revenue stream that feeds the bottom line:  those companies that have been dependent on provision of goods and services will need to evaluate consumer demand in the new environment and any restrictions that may be placed on them.  For example, those in the arts and cultural industry sector will likely see long-reaching effects resulting from limits on public gatherings; those in social/human services may be less impacted as their state and local contracts ensure current revenue will likely remain constant in the near term.

Review the complete Survey Results.  If JER HR Group can assist you with your human resources or compensation needs, please email or call (866) 475-7687.