COVID-19: Job Loss Figures Only Tell Part of the Story

by Christopher Fusco, CCP, GRP, SPHR - May 26, 2020
Share this article:
Tweet about this on Twitter
Twitter
Share on LinkedIn
Linkedin
Share on Facebook
Facebook
Email this to someone
email

To all of our friends and colleagues in HR and Total Rewards, we’re deeply grateful for you. We’ve witnessed your grace and grit under sudden and immense pressure to support the health and well-being of employees under your care, preserve future jobs, and secure the viability of your business.

In these moments of human and economic crisis, Salary.com remains committed to our mission of empowering you to make confident decisions and get pay right. Admittedly, we’ve never experienced anything like the COVID-19 pandemic, subsequent lockdowns, and resulting economic fallout. How might anyone make decisions with confidence in times like these? What does it mean to get pay right in a labor market shedding jobs by the tens of millions? We went looking for answers.

Job Loss Figures Only Tell Part of the Story

The weekly drumbeat of job loss figures that began in March (reaching nearly 40 million jobs lost as of this writing) tell one important part of the story of what’s happening in our labor market. It's the testimony of swift and drastic actions from whole industry sectors. Yet, beyond the job losses, the rolling shocks through our economy and the labor market — and to compensation and benefits plans and programs — remain difficult to discern. We need more data.

To better understand the full range of actions that Total Rewards Professionals are taking in light of the economic downturn caused by the COVID-19 virus outbreak — actions not contemplated in the weekly job loss headlines — we conducted the COVID-19 Compensation and Benefits Impact Survey.

We captured the first wave of results in mid-April with more than 1,400 respondents and discovered that the majority or employers took some negative action, which included temporary or permanent layoffs, salary freezes or reductions, and merit increases that were eliminated, reduced or postponed:

  • 66% of survey participants took at least one negative action regarding employment.
  • Layoffs were the most used option - 32% of participants engaged in either a temporary or permanent layoff, or both.
  • More than 27% of participants took negative action on base salary.
  • 18% of participants implemented a salary freeze and another 10% reduced base pay for current employees.
  • Nearly 6% of organizations increased temporary hiring, and over 2% increased permanent hiring.

 

Job Losses Reversed

We’re hopeful about the future. Thankfully, Total Rewards professionals have not yet had to deploy their full arsenal of responses in the service of cost savings and conserving cash. While those days may still be approaching for some, we see bright spots within this wave of survey data and inspiration from our conversations with HR and Total Rewards leaders.

For instance, of those participants whose organizations laid off employees, less than 10% indicated that layoffs were permanent, meaning that the massive job losses have a strong chance of being reversed as we emerge from lockdown.

Remaking the Model of Work

For many, digital transformation initiatives previously planned to take years are now being completed at warp speed. Processes that fail to provide value to customers or employees are at last finding their way to the shredder. Companies are doubling down on innovative technologies that enable employees to be more productive and to make faster decisions. In their response to the crisis, organizations are showing greater agility than they perhaps thought themselves capable.

We see inspiring examples of leading from the middle, of organizations and everyday people uniting around common purposes more strongly than ever. The bright light of the human spirit continues to shine through as people find their own ways to come together to work for the common good.

Longer term, a remaking of the model of work will surface creative opportunities to innovate Total Rewards for a post-COVID-19 world. Your work has never been more impactful, and we’ll be there with you to help ensure that it is a world where employees and companies thrive.

 

COVID-19 Report Details

We conducted the COVID-19 Compensation and Benefits Impact Survey, which targeted 1,176 people working in compensation or total rewards roles within HR across the U.S. and Canada, in mid-April to better understand the full range of actions that employers are taking in response to the COVID-19 virus outbreak. The report provides details on industries most impacted by the current crisis as well as how organizations are adjusting base and variable pay, and long-term compensation strategies.

We plan to update the survey data quarterly to help organizations with total compensation decisions. For information regarding the complete Salary.com survey catalog and how you can participate in future surveys, including the COVID-19 Compensation and Benefits Impact Survey as well as the 2020 Salary Budget Survey, click here.

Copy and paste this HTML to share this article on your site:

Related Salary.com Content

THE MOST RECOGNIZED BRANDS: Our customers