Despite the economic fallout caused by the Covid-19 pandemic, approximately half of US companies have no immediate plans to make any pay adjustments for salaried (48%) or hourly (54%) staff, reveals a new survey carried out by executive compensation consultancy, Pearl Meyer.
While 22% of companies have already taken staffing actions (such as furloughs or layoffs), almost a third (31%) are considering taking action, however, and almost half (47%) have no such plans, notes the survey. Although controlling fixed costs, such as payroll, is a critical consideration amid economic decline, only 16% have either decreased or frozen salaries, and only 7% have done so for hourly employees.
COST CONTROL MEASURES
So far, the fallout from Covid-19 has not “significantly impacted merit increases”, according to the survey results. Around 18% of firms have either delayed, cancelled, or reduced planned merit increases, but almost half (45%) have not and do not intend to change planned increases.
What about employee benefits? The Pearl Meyer survey found only 6% of companies have reduced or eliminated employer contributions to their retirement plan due to Covid-19, but 16% are considering it.
“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.
UNCHARTERED TERRITORY
“We are in uncharted territory,” Hudner continued. “While organisations 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.”
Pearl Meyer’s survey was conducted at the beginning of this month with 369 respondents (182 publicly traded companies, 143 private firms, and 44 not-for-profit organisations).
Click here for a copy of the report.
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