In March, April, and May, Korn Ferry conducted pulse surveys with 7,660 respondents from 99 countries to gauge the impact of COVID-19 on rewards and benefits. How have organizations’ practices shifted during the pandemic, and what does an optimized total rewards program look like in the longer term?
March – from normalcy to crisis
In the month that saw worldwide COVID-19 cases explode from 87,831 (March 1) to 857,000 (March 31), our first pulse survey captured a gradual shift -- from business as usual, to business in quarantine. Uncertainty was running high at this point, with one-third of respondents unsure whether the pandemic’s impact would be positive or negative. There also appeared to be optimism that normalcy could soon be restored. Only a minority of companies had undertaken salary adjustments. Of those planning to adjust incentive programs, most were thinking short- rather than long-term.
May – a new reality sets in
By the time we conducted our third pulse survey, amid rising daily cases and global economic shutdown, we saw uncertainty give way to negativity. The vast majority of respondents now expected significant decline in revenue. Adjustments were becoming increasingly common, most significantly salary cuts and freezes, and the reduction, deferral or delay of short-term incentives and bonuses.
While current outlooks may be predominantly negative, there is also optimism. Most organizations expect to survive the crisis and are now squarely focused on business post-COVID-19. As we emerge into this altered world of remote working, lean structures, and cost-optimized approaches, organizations have a window to develop strategies, programs, and practices that are better aligned with business needs.
When looking for ways to optimize your reward-program management, our global research and work with clients indicates five key areas to focus on over the next six months to two years:
- Fit-for-purpose strategy for total rewards.
- Performance management programs.
- Short-term incentive/bonus pay design.
- Job evaluation, work measurement, and career frameworks.
- External pay benchmarking processes.
Our summary paper, Optimizing Rewards in a Changing World, covers this information and more, with a focus on how businesses plan to evolve their total rewards programs as they accelerate through the turn.