Enable informed decisions about compensation and benefits especially during today’s uncertain times.
The COVID-19 pandemic has forced companies to focus on the health and well-being of their employees first, balancing economics with empathy. HR leaders are facing tough decisions and re-evaluating priorities as they consider workforce cutbacks, reductions in base salaries and incentives, and changes to benefit programs. Many are simultaneously re-examining their talent portfolios to strategically reskill or upskill segments of their workforce. Engaged employees are always essential, and perhaps more so during tough times and recovery, which makes it critical to balance how companies retain and reward employees. Knowing how your total rewards programs are positioned is essential to weathering the current difficult times and to be prepared to take advantage of the coming recovery.
According to Mercer’s recent poll companies are adapting their workforce practices as a result of the Coronavirus. We have learned that:
While much of these actions are centered on the hardest-hit industries, few industries or organizations are immune from the impact of COVID-19.
As companies evaluate how to do more with less, it can be tempting to look at compensation survey participation and regular pay benchmarking as non-essential costs to cut. But this penny-wise, pound-foolish approach will leave you unknowledgeable about your rewards positioning and unprepared to take advantage of the recovery. While many companies have hit “pause” on hiring, talented employees are always in demand. Benchmarking pay and benefits with reliable and relevant market data is essential to retain and engage your best people and attract new talent as your business model changes.
What’s different about this downturn from the 2000 dot-com crash or the 2008 global financial crisis is that leaders are placing priorities on long-term futures above short-term gains. Based on our experience with these past crises, the organizations that we're best positioned to accelerate when the market rebounded were those who were up to speed with hiring and salary trends, as well as other normal business functions.
The companies that are gearing up now to return to pre-COVID-19 productivity levels in the third and fourth quarters – the time when most benchmarking is conducted and reviewed – will need refreshed data to provide the information required to prioritize rewards decisions. Given the magnitude of change with which many firms are challenged, 2020 presents a timely opportunity to benchmark total rewards strategies for all levels of the organization. From the C-suite and Board of Directors to front line workers - whom we’ve learned are vital to keeping the economy running - encompassing all compensation, benefits, and prerequisites to be ready to adjust any of these levers for reward, recognition, attraction, and retention of talent.
Mercer is acting now to ensure that survey and proxy data we provide to our clients are relevant, accurate and reflects data that factors in changes during the COVID-19 pandemic and the resulting market volatility. Here are four steps we are taking:
Simply aging data from 2018 or 2019 will not be a reliable way to gauge compensation levels for the coming year. Too much has changed too quickly to enable it to have predictive value. The need for current market data is critical to make informed decisions. Using Mercer data will enable you to tap into accurate resources to help chart a new course and pay competitively no matter what combination of skills you may need. Reliable data will help you to make better decisions. It needs to remain a priority.