How companies are adjusting their compensation plans
While some employers are freezing wage increases, others aren't yet sure how to respond to the current chaos.
The first quarter of the year ended in chaos for many businesses, throwing their financial outlook completely off track. A month into Q2, companies have adjusted their strategies to reflect a more gloomy economic outlook–some taking a more optimistic approach than others.
To help employers get a better frame of reference for this new and fluid reality, Mercer is following up on its annual Compensation Survey with a “monthly pulse” to see how employers are amending their strategies.
Related: The COVID-19 pandemic: key employee benefits and compensation issues to consider
For the month of April, anticipated salary and merit increases dropped to 2.7% and 2.5%, brought down in large part by companies who are opting to freeze pay increases altogether. Notably, the health care industry’s anticipated increases came in at 2.8%, though Mercer predicts that trend will not continue.
“The runway for this crisis is likely to be long and the impact uneven, which will result in a lot of complexity around managing pay and rewards, both across workforce segments and across locations,” said Mary Ann Sardone, partner and U.S. talent solutions leader at Mercer.
How else has COVID-19 affected employers’ compensation strategies? Take a look:
