The Impact of COVID on Employee Pay, Benefits, and Hiring

As the COVID-19 pandemic has battered the American economy, most firms have avoided cuts in workers' base pay and benefits, according to a national survey of HR professionals conducted by MindEdge Learning and the HR Certification Institute (HRCI). The overwhelming majority of survey respondents say that their companies have kept workers' pay and benefits intact during the crisis: 81 percent have not reduced base compensation and 89 percent have not reduced or eliminated benefits.

The results of HR in the Age of Workplace Uncertainty, an online survey of 757 HR professionals, also show that workplace stress and burnout have increased sharply during the pandemic.

"The pandemic has understandably put a great deal of pressure on the U.S. workforce," said Frank Connolly, director of research at MindEdge Learning. "The survey shows that while stress levels are up, companies are trying hard to maintain base pay, and many are adding benefits that will help combat stress."

Results indicate that 75 percent of respondents experienced an increase in employee burnout due to stress related to COVID-19. Slightly more than half (53 percent) report that their companies have introduced new benefits to help employees deal with stress, or plan to do so in the near future.

HR goes remote. Eighty-four percent of survey respondents are currently working remotely, and two-of-three companies (68 percent) are now conducting most HR operations remotely. A clear majority (58 percent) say their companies' remote-work programs were a direct response to the COVID-19 pandemic.

Nine-out of-ten (88 percent) respondents say their companies are still hiring during the pandemic, though many (43 percent) are hiring at a lower rate than before. Overwhelmingly, respondents say that current applicant pools are better qualified compared to pre-pandemic candidates. Nearly three-quarters of respondents (73 percent) say that there are more qualified individuals in their area looking for work than before COVID-19 – in large part because high unemployment means there are more experienced workers in the applicant pool.

A substantial number of HR professionals express reservations about having to recruit and onboard applicants remotely:

• 35 percent say that remote recruiting is harder than in-person recruiting, and only 18 percent say that it is easier;
• 38 percent say that remote onboarding is harder than in-person onboarding, and only 9 percent say that it is easier; and
• 25 percent say that remote interviews are less productive than in-person interviews, and only 14 percent say that they are more productive.

"HR executives are tasked with creating a seamless remote work experience for their employees," said Dr. Amy Dufrane, SPHR, CAE, CEO of HRCI. "Recruiting from an available applicant pool has expanded due to unemployment and the physical barriers have been removed due to more flexible remote working company policies. Likewise, hiring and remote onboarding processes have become more impersonal than before."

A lack of training. While remote work has rapidly become the "new normal" during the pandemic, most companies have not actively prepared their employees to work from home. A majority of HR professionals (57 percent) say their companies do not provide training on how to work remotely.

Impact on benefits. Most companies, however, have managed to maintain a full range of employee benefits during the pandemic. Fully 88 percent of respondents say that their companies did not eliminate or reduce any employee benefits because of COVID-19. Among those benefits that were curtailed, 401K matching was the most likely to have been reduced or eliminated—but only 8 percent of respondents report that their companies did so.

Stress and burnout are up, while company culture has mostly remained the same. Seventy-five percent of respondents have noticed a modest or major increase in employee burnout due to stress from COVID-19. A majority of respondents (53 percent) say their companies plan to offer their workers benefits to help them cope with stress—including 39 percent who say their companies have already introduced workplace benefits to reduce stress. Just under half (47 percent) say their companies do not plan to introduce these benefits.

Despite the rise in stress, 42 percent of HR professionals say their company culture has remained the same. A quarter (25 percent) say that company culture has grown weaker, while a similar proportion (23 percent) say that it has improved.

Source: MindEdge.

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