New data from the Institute for Corporate Productivity (i4cp) finds almost two thirds (66%) of companies have already taken measures, or are considering measures, to rein in headcount costs if the COVID-19 pandemic continues longer than initially expected.
With a record 6.6 million Americans who have applied for unemployment benefits in the last week, the coronavirus pandemic has sent a labor market – which was flourishing a few weeks ago – into free fall. In dealing with a sudden and drastic worldwide economic downturn, many organizations are scrambling to contain headcount costs, while simultaneously hoping to avoid adding to the unemployment statistics if possible.
“Containing headcount makes good sense,” said Mark Englizian, senior strategy advisor for the Institute for Corporate Productivity (i4cp) and chair of i4cp’s Total Rewards Leader Board. “Shrinking headcount does not make sense, except in the most dire situations, like the travel or restaurant industry.”
To avoid shrinking headcount, many companies have also implemented hiring and salary freezes to stem employee costs. Other cost-saving steps reported include:
- Decreasing benefits and company perks
- Temporary furloughs of all non-essential jobs
- Implementing a special type of leave that allows some employees to receive full pay for up to 160 hours of time not worked
- Pay reductions to non-working staff
- Reassigning staff to critical areas of need
The study this week of professionals who work primarily in compensation and benefits also found:
- Just 11% said their organizations are either allowing employees to donate PTO to employees who have been more directly affected by the COVID-19 pandemic. Another 11% are considering doing so.
- A third (32%) say their organizations are offering paid FMLA outside of PTO and Families First Act requirements. Another third are not.
- Most (63%) say their companies are not increasing matches for employee donations to non-profits during the pandemic.
Download the full survey results—due to the current global health and productivity crisis affecting everyone, i4cp is making all related ongoing research publicly available.
We also encourage you to visit i4cp.com/coronavirus for other employer resources including discussion forums, next practices, useful resources, and more.