Furlough scheme puts halt to pay freezes, while spend on wellbeing benefits is up
Our snap survey among 213 medium to large employers shows that just 7% now plan to cancel pay rises, down from 31% in REBA’s previous snap survey, conducted 17-19 March. A third (32%) will now postpone pay reviews, compared to 44% saying they would do so two weeks ago.
The new survey, Impact of the coronavirus crisis on pay, bonuses, and employee benefits, shows that almost two thirds (63%) plan to use the government’s Coronavirus Job Retention Scheme to furlough staff, of which 96% will use it for selected job roles and 4% will use it for all staff.
“There are a number of reasons we are seeing this shift in employers’ outlook on pay budgets. The main one is likely to be employers being able to use the Coronavirus Job Retention Scheme. But also, after the initial shock, many employers have had time to reassess to take a medium to longer term view. We see employers trying to control costs while keeping themselves in business, but also preparing for a comeback after this pandemic,” said Debi O’Donovan, director of REBA.
There is little difference to proposed changes between all-employee pay and bonuses and executive compensation decisions.
Proportion of businesses planning to:
| For all employees | For executives | |
| Reduce pay | 38% | 36% |
| Make no change to pay | 58% | 63% |
| Increase employee pay | 5% | 1% |
| Reduce bonuses | 49% | 47% |
| Make no change to bonuses | 47% | 52% |
| Increase bonuses | 3% | 1% |
“Clearly a lot is under review at the moment and pay reviews and bonuses happen at different times of the year. So we expect these figures to change over the coming weeks and months. However, we know from members that changing pay and bonuses is a contractual issue so cannot be done easily without legal repercussions. Also, many employers are balancing the need to engage talent ready for a post-coronavirus crisis upturn,” said O’Donovan.
Spend on employee wellbeing benefits and insurances increases
The survey shows that employers have increased spend on some employee benefits and insurances to support staff.
One in four (25%) have increased spend on their current employee assistance programme (EAP) by either improving the quality of the service offered or extending EAPs to more of their workforce, especially workforces in other countries.
One in eight employers (13%) have increased spend on their existing virtual GP service, while a further 8% (one in 12 employers) have introduced virtual GPs for the first time.
One in 20 (5%) have increased spend on their existing group life cover and 3% have introduced a health cash plan for the first time.
Proportion of employers offering different types of financial wellbeing support:
- 62% financial education
- 40% refunding season ticket loans
- 31% financial advice
- 19% support with spotting financial scams
- 15% support for employees whose spouses are affected by job/income loss
- 12% workplace loans to buy home office equipment or other purposes
- 8% management of nursery fees
- 5% negotiating mortgages
- 4% helping employees negotiate with utility suppliers
- 3% helping employees freeze, renegotiate or cancel subscriptions
Download the full report or listen to REBA’s latest podcast as the editorial team talk with Dr Duncan Brown, Fellow at CIPD and visiting Professor University of Greenwich, about the survey findings and his take on what reward strategies will look like post-COVID-19.
