A Third Of US Companies Slashed Worker Pay For Pandemic

A new survey by global outplacement and executive and business coaching firm Challenger, Gray & Christmas found that 30 percent of companies have cut pay in response to the pandemic, the company announce in a press release.

Fifty-five percent of those companies said the pay cuts allowed them to avoid layoffs in the long run.

According to the survey, 44 percent of respondents said the pay cuts had happened across the board, while 34.22 percent said they'd happened for executive or higher-up positions only and 11.11 percent said the cuts had just been for "certain positions," the release said.

Now that many of the government-mandated shutdowns across the world are lifting, some of the companies have begun reversing the pay cuts. Aon, a consulting firm, has reversed its cuts and additionally added repayments for what workers lost, along with additional bonuses. And MoneyGram has reversed the 20 percent pay cuts imposed on non-hourly employees from March, according to a regulatory filing.

Andrew Challenger, senior vice president of the firm, said the recent findings underscored a new trend for employment.

“It used to be that companies would do everything they could to avoid cutting pay. Now they try to avoid layoffs, which can hurt morale, lead to survivors’ guilt, and create anxiety, with employees wondering who will be next,” he said, according to the release.

He said pay cuts may have been more attractive because employers had optimism that the pandemic would end "sooner rather than later," and they didn't want to sacrifice good employees they'd need in the future.

However, several companies had to go the route of furloughs or layoffs anyway, including United Airlines and Monzo, among numerous others.

"At the same time, working from home may have fewer costs for employees, such as avoiding commuting expenses, so pay cuts could be more easily tolerated," Challenger added, according to the release.

The survey found that 73 percent of those who responded said they also planned to keep some or all employees working from home even once it's safe to work in an office again.



About: Accelerating The Real-Time Payments Demand Curve:What Banks Need To Know About What Consumers Want And Need, PYMNTS  examines consumers’ understanding of real-time payments and the methods they use for different types of payments. The report explores consumers’ interest in real-time payments and their willingness to switch to financial institutions that offer such capabilities.