By Pension and Benefits Editorial Staff
In response to the COVID-19 pandemic, many companies are exploring ways to manage or reduce total rewards costs through changes to health and benefits plans and retirement programs, according to recent research from Aon. However, the survey, Adjusting Total Rewards Programs and Workforce Strategies in Response to COVID-19, found that few firms have executed cost-saving measures in these areas so far. Seventy-six percent of firms have yet to make any changes to health and welfare plans, and 86 percent of firms have yet to make changes to retirement plans.
“We know companies have a strong desire to help their people as much as possible; yet, many firms also face very difficult economic conditions,” said Alex Cwirko-Godycki, chief strategy officer for the rewards practice at Aon. “The actions cited throughout our study reflect this dichotomy; efforts to manage costs are accelerating, and at the same time, companies are also taking significant steps to support employees working in new or more difficult environments.”
Of actions that employers have taken, 17 percent have encouraged employees to take previously accrued paid time off, 7 percent have encouraged employees to take unpaid leave, 4 percent have cancelled some or all wellness rewards, and 2 percent have reduced some or all paid leave benefits, where allowed by law. In addition, Aon found that in North America, only 5 percent of companies have suspended employer matches, profit-sharing, or other non-elective employer contributions for defined contribution retirement plans.
Supporting employees. Companies have moved quickly to supplement support programs and leave benefits for employees, Aon found. In North America, 70 percent of companies are providing additional scheduling flexibility to employees with children; 42 percent are providing temporary increases in sick leave entitlements (e.g., special “pandemic leaves”); 38 percent are allowing employees to use sick leave for COVID-19 related quarantines (in addition to what is required by law); and 26 percent are allowing employees to use sick leave to care for children when they are off from school (in addition to what is required by law).
Communication. The survey found that 88 percent have increased their general communications frequency due to COVID-19. Specifically, Aon found that:
- 93 percent have been sending updates related to actions taken on health, safety, and business continuity;
- 74 percent have been sending special updates on or re-sharing information on wellbeing resources;
- 65 percent have been spending special updates or re-sharing information on health benefits;
- 55 percent have been sending special updates on or re-sharing information on time-off and leave policies; and
- 25 percent have been sending special updates on or re-sharing information on compensation and total rewards.
Looking ahead. When asked how the experience of responding to COVID-19 might change future workforce strategies, Aon found that 44 percent of companies in North America expect their digital transformation agendas to accelerate following their initial response to COVID-19. Eighty-three percent of companies anticipate their exploration of different working models, such as, expanded working from home and increased flexible hours approaches, will accelerate as well.
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