DUBLIN 28 September 2020 – Research by Willis Towers Watson has found that employers in Ireland are bracing themselves for a challenging end to 2020 and uncertain 2021. 33% of employers surveyed are actively planning to either reduce their workforce or undertake organization wide restructuring in response to COVID-19. The remaining 67% of those surveyed stated that they would either freeze or reduce hiring across their organisations.
The Willis Towers Watson (NASDAQ: TLTW) Salary Budget Planning Report research examines salary and work practice changes throughout 2020 and expectations for 2021.
As the economy and businesses move from managing the initial impact of the COVID-19 virus in to the formalization of new practices and ways of working, of those employers who stated that they would review workforce numbers, 13% of these respondents had already reduced numbers and 50% were giving consideration to reducing their headcount.
Regarding staff associated costs and future planning, 50% of all surveyed respondents are delaying, or are considering and planning for a delay, of bonus payments. Furthermore, of the employers surveyed who stated that they are looking at reducing employee pay as a cost saving measure, 17% had already done so and 50% were considering or planning for pay reductions across their entire workforce. Overall, changes caused by COVID-19 to employers and employees will be unavoidable, impacting more than remuneration and pay with 12% of employers actively changing or planning to change employee work hours.
Although many businesses have availed of furlough schemes in recent months, it is encouraging to see that almost half of those surveyed (45%) have no plans to place employees on involuntary unpaid leave of absences. However, organisations are also engaging with their workforce to find solutions to the issues raised by COVID-19, with 66% having taken or are considering taking action to offer voluntary unpaid leave or furloughs to interested employees.
Commenting on the survey results, Sarah McDonough, Country Lead for Talent & Rewards at Willis Towers Watson, said;
“We are seeing large numbers of companies making changes to how they operate to safeguard their future”
Sarah McDonough
Talent and Rewards Country Lead at Willis Towers Watson Ireland
“This report is a good insight as to how Irish businesses are finding their feet, reacting to the severe impacts of COVID-19 and overall planning. While the crisis has not impacted all sectors equally, future planning will be an important consideration across the board. It will however be a challenge but through this research and our own work with clients, we are seeing large numbers of companies making changes to how they operate to safeguard their future. Measures such as hire freezes, restructuring and addressing costs make a difference in the short term but it is important that changes are strategically guided and do not hamper a business’s ability to meet its client’s needs and overall growth.
“Although this research is stark, it is an opportunity for organisations to reimagine how and where they work, whilst also developing their employees to be able to deal with accelerated change.”
Sarah McDonough
Talent and Rewards Country Lead at Willis Towers Watson Ireland
“On a broader point, the way we work and the way businesses reward employees has been evolving over the past several years in line with a globalized work environment, societal shifts and factors such as new technologies and demographic changes. COVID-19 has accelerated these forces for change. Although this research is stark, it is an opportunity for organisations to reimagine how and where they work, how they reward for that work and how they prepare for the future by building agility and resilience into their business models, whilst also developing their employees to be able to deal with accelerated change.”
The Salary Budget Planning Report is compiled by Willis Towers Watson’s Data Services Practice. The survey was conducted in May and June 2020. Approximately 15,000 sets of responses were received from companies across 132 countries worldwide, with 208 organisations participating in Ireland. The report summarises the findings of Willis Towers Watson’s annual survey on salary movement and reviews practices as a means of helping companies with their compensation planning for 2020 and beyond. The full report can be found here.
Willis Tower Watson actively monitors salary and associated data, and as such is planning to capture an update on key indicators toward the end of 2021.
