It’s no surprise that we are all finding our way when it comes to decisions about pay, bonus and benefits in light of the current Coronavirus pandemic.
To save you some time, we have shared here the useful research we’ve seen so far from around what employers are doing.
- Charles Cotton provides an overview on how our approach to reward might need to change to help employers ‘bounce forward’. Covering considerations such as how jobs are valued, potential impact on the National Living Wage, our perception of performance and of course financial well being
- NatWest Group share how they’ve responded to colleague needs during the crisis
- Lewis Silkin discuss the legal implications of changing contractual entitlements and discretionary elements of pay, bonus and LTIPs. Covering employee consent and implied contractual right through custom and practice.
REBA (Reward and Employee Benefits Association)
Within REBAs regularly updated Coronavirus blog there a series of snapshot employer surveys. These are free to access and cover approaches to pay, bonus, holiday, sick pay, benefits and wellbeing. In particular, the latest survey results published 7 May showed:
- 13.5% of companies have agreed pay cuts
- 1/3 are not going ahead with pay rises as planned
- 10% have cancelled pay rises altogether this year
- 24% have deferred annual bonuses
REBA are also discussing Coronavirus in some of their ‘Inside Track Podcasts’ which are well worth a listen.
Korn Ferry are also running global pulse surveys into the impact of COVID-19 on reward and benefits. The results have some helpful detail, and the second survey published 22 April showed:
- 30% of companies are considering salary cuts and 42% considering pay freezes
- 42% are delaying pay reviews
- 36% are reducing, delaying or deferring bonuses and 38% considering a performance target adjustment
- 29% are considering a temporary 'hero/hazard pay' bonus, with some using this to address the perceived unfairness alongside furloughed workers. This appears to be US centric. In the UK, there are ethical concerns about putting employees at risk and parallels being drawn with reward in the NHS at other frontline workers whose pay has not been adjusted.
High Pay Centre
The High Pay Centre published a report at the end of April on the Corporate Response to the Economic Shutdown. The focus is primarily on FTSE100 firms and executive compensation and showed:
- 37% of FTSE100 cut executive pay
- 13% have cut bonuses and LTIPs
- 33% are withdrawing or withholding dividends
Duncan Brown (principal Associate at IES)
For a more forward-looking perspective, Duncan Brown has been holding discussions with a small group of senior reward leaders, advisers, thinkers and policy makers. There is particular focus on low pay, and senior pay and the group are looking to maximise the learning from the pandemic crisis and promote a more positive future for UK reward practices.
The group are currently developing a set of strategic questions to disseminate widely to boards, Remuneration Committees and HR. These will help us link important reward issues, raise key questions and draw out the implications, and consider future alternatives, choices and improvements to rewards.
Definitely one to watch!
Image: courtesy of FolsomNatural