Most Employers Expect to Bring Workers Back, Survey Says

Temperature

In a sign that employers believe the economy’s weakness is linked primarily to the COVID-19 pandemic, most of the companies that recently reduced headcount or compensation say they expect to bring affected employees back on board.

While 66% of employers cut headcount or pay in response to the pandemic, a survey by Salary.com found only 10% expect layoffs to be permanent, and 59% said their staffing levels were unchanged.

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Specifically, 32% of the companies laid off workers either temporarily or permanently. About 18% imposed a salary freeze while 31% reduced base or variable pay. On the flip side, 65% of employers left base pay alone. Some 44% either postponed or cancelled merit raises, but 45% expect to continue awarding them this year.

A Little Hiring

The staggering layoffs caused by the pandemic—more than 38 million Americans have filed for unemployment insurance as of last week—is perhaps the starkest illustration of the current economic disruption. At the same time, Salary.com’s survey shows that even in the worst of times, businesses require people in order to operate.

Roughly 6% of organizations increased hiring of temporary workers, and over 2% increased permanent hiring, the survey said. Some 7% granted temporary pay increases or premiums to recognize hazards or hardships at work. Meanwhile, 2% awarded increases for other reasons.

The job categories that saw the most layoffs included administration (39%), production and operations (36%), customer service (32%), sales (24%) and technical and skilled trades (18%). Legal, safety and security, environmental/health/safety, and media and communications were the least impacted.

Slowdown in Raises

The survey also revealed that employers plan to slow the pace of salary increases during the next year. The average salary budget increase will drop from 2.9% in 2019 to 2.7% in 2020 to an anticipated 2.6% in 2021.

That bears out an observation Salary.com CEO Kent Plunkett made in April, when he told us, “the world of work will be different next winter than it is today.”

“I believe that we are already seeing spot-market ‘recruiting’ compensation levels drop and we are going to end up with a world where the job that was paid at $100,000 a year is going to be paid at a lower level next year,” he said. “Market pricing-driven compensation levels are being reset.”

In a statement released with the survey, Plunkett said he was excited “to see the optimism of business leaders come through in the data,” but believes anxiety over employment and compensation trends will remain high in the coming months.

The survey included 1,176 compensation managers in the U.S. and Canada. Most respondents—55%—had revenue of less than $75 million, while about 51% employed 250 or fewer employees. 

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