- One-third (34%) of compensation managers expect the novel coronavirus to have a "moderate or large negative impact" over the next six months, while another 20% expect a similar impact over the next year, according to a survey of more than 200 mostly multinational (86%) companies from Willis Towers Watson. The new survey, which is part of a series of pulse surveys the company is conducting around the impact of COVID-19, highlights rising levels of concern for the economic impact of the virus at the company level, especially after the stock market began to decline.
- As a result, 44% of companies said their annual executive incentive plan has been or will be affected, with 19% adjusting the funding or targets for the plan. And while 35% of companies that offer long-term incentives expect to make changes to long-term incentive plans, "the vast majority of those do not intend to adjust performance goals or metrics at this time." Additionally, 75% of the companies surveyed do not plan to make adjustments to their sales compensation plans.
- "Companies are increasingly expecting that the coronavirus will adversely affect their businesses. Yet, because the exact impact of the virus is uncertain, compensation committees and executives are not making immediate changes to their organizations' pay programs — at least for now," Adrienne Altman, managing director, North America head, Rewards, Willis Towers Watson, said in a release. "Instead, companies are prioritizing the physical and financial wellbeing of their employees, and rightfully so."
Companies have been preparing for the impact of coronavirus since late-February, as recommendations from the Centers for Disease Control and Prevention (CDC) spurred action. Many office workers began working remotely as companies started preparing work-from-home policies and rolling out a variety of technologies to make the transition into a fully remote workforce easier. Major employers in tech and software led the charge by being among the first to urge employees to work remotely and also by limiting or suspending travel.
Meanwhile, companies with large hourly workforces face a series of new dilemmas. For many, revenue may dip as people go out less and make fewer visits to retail and restaurants. For example, Delta announced a series of financial cost-cutting measures which included reduction of routes, staffing and usage of consultants and contractors as well as a hiring freeze.
Additionally, workers whose hourly jobs are their primary source of income may be worried about being able to pay their bills, and less likely to exhibit caution about going into work with symptoms because they don't have paid sick leave. Companies such as Wal-Mart, Trader Joe's, McDonald's and Microsoft have started to roll out sick leave programs while the government is in the process of passing emergency measures that would include paid sick leave.
Other considerations for companies are to avoid discrimination and stereotyping due to misperceptions about the virus, which can include discrimination over racial or national origin as well as Americans with Disabilities Act considerations. The U.S. Department of Labor recently addressed implications for the Family and Medical Leave Act and Fair Labor Standards Acr under this threat, too.