By Cassandra Faurote
It’s a challenging time. When a pandemic like the coronavirus outbreak leads to COVID-19 infections, serious illness and even death, we are all impacted. Lives change. At home and at work. Indeed, for many U.S. corporate workers, the home is the workplace now, and employee interactions take place online instead of face-to-face. These fundamental changes in working relationships cause leaders and executives to re-examine all aspects of administration and management as well.
For example, many in leadership roles are now advising executive teams on essential changes – short-term or longer lasting – to employee compensation.
Never has it been more critical for employers to be as creative as they can in determining alternative compensation solutions. With that in mind, here’s what a recent survey of Total Reward Solutions clients revealed:
TRS Survey Highlights Innovative Compensation Practices:
At Total Reward Solutions, we recently surveyed clients regarding their compensation and benefits practices during this pandemic period. We were pleased to see many of our respondents employing innovative, positive, and generous ideas such as:
- Piloting an alternative work program to help affected employees maintain some work hours. This is important because layoffs not only affect earnings potential but also creates a termination event which causes a loss of benefits just when employees – and their families – need them most. For example, an Employee Assistance Program (EAP) might be more important than ever.
- Giving affected employees their full-year Paid Time Off (PTO) allotment rather than requiring them to earn it on a pro-rated basis throughout the year. This is a generous offer, the kind that can foster employee gratitude and loyalty.
Other innovative ideas necessary for the long-term economic wellbeing of the organization (and its employees) might include:
- Reducing benefits such as 401(k) matching in order to reallocate those dollars to pay for other benefits. (Just keep your testing in mind and work with your benefits/retirement consultant before making any benefit plan changes.)
- Deferring planned or periodic salary increases to save costs
- Adopting a 4-day work week while keeping regular work hours, thus cutting salaries by 20%
- Cutting salaries to only top-level employees in order to preserve pay levels for lower-earning employees who might be living paycheck to paycheck as they struggle to survive
- Implementing job sharing initiatives to keep a larger number of employees working at least part time
- Offering employees the opportunity to take unpaid leaves of absence (after following the new required Families First Coronavirus Act, for example). This might allow these workers the chance to pursue a long-desired educational pursuit or other project.
- Offering voluntary retirement as a way to help older workers pursue their next chapters while keeping larger numbers of younger employees working
- Furloughing employees rather than laying them off
Bottom Line:
Not all employers can afford to maintain business as usual during a crisis. Many are literally fighting for survival. But flexibility and innovation in compensation during challenging times tells employees that your organization cares and values them as an investment rather than an expense. And this commitment from the organization often nurtures greater trust and loyalty.
Remember this:
Employees remember the decisions their employers make during tough times. So, in “make it or break it” moments such as those during a crisis, look for creative alternative compensation solutions to keep employees working and compensated fairly.
Cassandra Faurote, CCP, SPHR, SHRM-SCP
Founder & CEO
Total Reward Solutions
[email protected]
www.totalrsolutions.com
