SURVEY HIGHLIGHTS:
2021 CORONAVIRUS Impacts on Pay, Benefits, and the Workforce
These survey results comprise responses from a total of one hundred-thirteen local organizations covering more than sixteen industries. Understanding the situation is evolving regularly, the survey outcomes shared in this report may have changed since the start of the survey in early March. Employers continue to evaluate pay and benefit programs along with workforce planning initiatives, as they consider new levels of flexibility dealing with the “new normal” COVID-19 has brought upon us.
Changes Impacting Pay & Bonus Plans
2021 Salary/Pay Adjustments
Last year, participants were requested to share how the COVID-19 pandemic had impacted their plans with making salary/pay adjustments. When asked the same question this year, the participants reported that 2021 is looking better than 2020. This year, 14.7% will be increasing salary/pay merit budgets as compared to 4.8% last year. There are fewer employers (19.3%) freezing salaries, down from 50.2% last year. Looking more closely, we were able to determine that those organizations planning on budgeted increases in 2021 were planning on a median increase of 3.0%, regardless of position type.
2021 Bonus Plans (Bonuses to be paid out in 2022)
Similar to last year, one-third (33.6%) of the participating organizations are not offering a 2021 Bonus plan as part of their total reward programs in 2021. As businesses focus on plans to bring employees back to work or return to the office from temporary remote work arrangements, 40% reported no changes to plans and nearly one-half (49.3%) are undecided as to what type of changes might be considered.
Changes Impacting Defined Contribution Plans
While employers work to manage costs, few employers have executed cost-saving measures with defined contribution plans. Based on data collected, only 2.7% of employers have suspended or reduced company matching contributions (which aligns with national trends reported in a survey published in December 2020 by Aon that ranged between 2-4%).
The data indicates that more than three-fourths (86.5%) of employers have decided to not implement any changes to their defined contribution plans. As a reference, the 2020 Retirement Plan Survey published through the Hawaii Employers Council, reported the overall average matching contribution percentage was 4.3%.
Workforce Impacts
In last year’s survey, 25.5% of participating employers had furloughed employees or executed permanent reduction in force measures (with the Leisure & Hospitality Industry feeling the greatest impact). Over the course of 2020, the unemployment rate in Hawaii soared from 4.1% earlier in the year to 21.9% according to the Bureau of Labor Statistics. As of the end of February 2021, the state of Hawaii reported an unemployment rate of 9.2% with Hawaii outpacing the rest of the U.S. which was averaging 6.2%.
Unemployment rates are slowly decreasing in Hawaii as employees are returning to work, but how we work has changed significantly. Nearly three-fourths of the respondents have some of their workforce working remotely.
Of the eighty-six organizations that reported having employees working remotely, additional expenses are being incurred, including increased electricity bills, charges for upgrading to faster internet service, phone service costs, and expenditures on office supplies from printers and office chairs to paper and staples. Over one-half (51.2%) of the organizations participating will not be providing additional compensation for additional expenses, while nearly one-third (30.2%) are providing laptops, cell phones and/or printers.
Vaccinations
Increased availability of COVID-19 vaccine is encouraging news for the economy. Most employers that participated in the survey (77.0%) are encouraging their employees to get vaccinated while two organizations will be making vaccinations mandatory.
Where vaccines are concerned, nearly one-half (44.2%), will be giving employees paid time off to get the vaccine administered, while only three organizations are planning on providing incentives (other than paid time off) to get vaccinated.
2021 Recruitment Plans
Many of the participating employers (85.9%) reported either no changes to 2021 hiring plans or limited recruitment for particular jobs, departments and/or locations. A few (6.2%) are undecided while the remaining 5.3% have implemented/or plan to implement a hiring freeze.
Looking Ahead at Workforce Changes
Dealing with the COVID-19 pandemic, companies were required to change the way business is executed, hence, participants were asked to share what initiatives that began due to COVID-19 will continue as the new normal. The practices identified as key initiatives to continue for the longer term are noted in the below graph in order of most responses received.
Looking Towards Business Reopening
For many organizations, the landscape of business changed due to the COVID-19 pandemic. In light of the changes that may have been temporarily implemented, we asked participants which initiatives may continue into the future. The most prevalent options are noted in the chart below, listed from highest to lowest responses received:
HEC conducts a variety of compensation and benefits surveys to provide data useful in developing and administering compensation and benefit plans, and personnel policies. Full reports and details are provided to survey participants. Custom snapshots and comparison reports from our compensation surveys are available, along with customized, proprietary surveys conducted on your behalf. Our Survey & Compensation experts can also work with members on employee opinion surveys to identify gaps between being an employer of choice and being merely an employer. For more information, please contact Dawn Mitchell, Survey & Compensation Services Manager (dmitchell@hecouncil.org), or Susan Amuro, Survey & Research Analyst (samuro@hecouncil.org).