The COVID-19 pandemic poses unprecedented challenges for organizations across industries. To understand how employers are reacting to and managing workforce changes as a result of the pandemic, we recently surveyed hundreds of HR leaders from more than 20 industries across the United States.
The survey asked respondents about their workforce practices before and after the COVID-19 outbreak as well additional actions HR leaders expect to take over the next year. Respondents answered questions related to hiring rates, furloughs, redeployment, salary freezes and other alternatives for retaining employees, in addition to questions about layoffs, whether outplacement was provided and future hiring and rehiring plans. Here’s an overview of findings from the survey, along with key takeaways for your organization.
state of the job market
Leading up to the outbreak, unemployment was at a historic low and most organizations (86%) were not planning to lay off any employees. As a result of the pandemic’s impact, 20% of employers have either laid off or furloughed employees. Additionally, nearly half of employers (47%) have not hired since the state of emergency was declared in March.
Another key finding from the survey shows that organizations are trying to minimize the pandemic’s impact on their workforce: Of those that laid off employees, approximately 14% of their workforces were let go. Among those that furloughed, about 18% of their employees were impacted. Of the companies that reduced work hours, one quarter of their employees were affected by this action.
While nobody could have predicted the pandemic or the extent of its disruption, it benefits organizations to always have a plan in place to quickly adapt to workforce shifts – whether this means redeploying employees from low-demand to busier areas of the business, taking other actions to avoid layoffs such as implementing hiring freezes and reducing pay or offering outplacement services to impacted employees. This is not the first time businesses have experienced sudden downturns, with the Great Recession of 2008 being the most recent. It’s important to be prepared so that you’re not caught off-guard and can do what’s right to support both your employees and business needs.
Of the employers who laid off or furloughed, 75% of employees were notified in-person, on-site, through an individual phone call or via email. A small percentage of employers notified employees of these changes by video call.
Employees are facing a tremendous amount of stress in their work and personal lives due to the uncertainties surrounding the pandemic. When communicating any workforce changes with your team, transparency is key. Keep employees updated with any information as you have it and be open and honest about any information you don’t know. Maintaining transparency each step of the way will help you build trust with employees, which will in turn help you drive productivity.
alternatives to layoffs
The survey found that more than half (54%) of organizations did not have a plan in place to avoid layoffs or furloughs. However, many employers have taken actions to reduce costs in response to COVID-19, with the top ones being hiring freezes (16%), reduced hours (14%), furloughs (11%) and layoffs (9%). Some employers have also implemented salary freezes, delayed or canceled bonuses, postponed merit increases or reduced pay to cut expenses during these challenging times.
Overall, fewer than 4% of employers have redeployed or reassigned employees internally since coronavirus hit, although among companies who sought alternatives to furloughs or layoffs, 46% redeployed employees internally (38%) or reassigned them with a partner (8%).
Given the business impact of the pandemic, redeployment gives your organization the opportunity to temporarily shift employees from slower areas of the business to high-demand areas such as moving salespeople to customer support roles. Not only does redeployment enable you to avoid layoffs and support employees, but it can also help you boost productivity and maintain institutional knowledge. Redeployment also contributes significantly to reduced costs related to unemployment taxes, outplacement costs and recruiting, hiring and onboarding new employees down the line.
The distance economy brought on by COVID-19 had caused business models to rapidly evolve. Organizations that adapt quickly will survive and thrive by building an agile workforce. To build a workforce that can flex and redeploy quickly, it’s important to support a culture of ongoing career development where career interests are aligned with the needs of your business. This includes skill building that happens on the job and via coursework and other learning opportunities, along with the capacity to surface talent and skills internally so that employees can be reassigned or redeployed within the company.
This type of internal mobility can help your team retain relationships between employees and your partners and customers, drive employee productivity and promote a mindset of innovation and an ‘all in’ attitude across your team. In the long term, this will also help you maintain a positive employer brand and attract top talent as a result.
To redeploy employees smoothly and effectively, it helps to have a redeployment plan in place that enables you to identify jobs within the organization, empowers hiring managers to see who is available and their skillsets, prepares employees for internal interviews, and also provides resources to quickly reskill and upskill for new roles. Having an ongoing redeployment strategy in place can help you build an increasingly agile workforce that will drive long-term business success, rather than taking a reactionary approach in the event of sudden workforce shifts such as the current pandemic.
The survey shows that among companies that offered outplacement to departing employees, the top benefits employees received were job opportunities (35%), resume consultation (34%) and workshops (27%). By offering outplacement, individuals impacted by layoffs can receive an updated and optimized resume and social profiles, personal career coaching and targeted job leads that are not easily found through online job posting sites.
At a time when competition for jobs is fierce and many individuals need to find work in completely different industries, professional career transition guidance can help job seekers focus on transferrable skills and decrease the time to land new roles. Outplacement programs that offer access to upskilling and reskilling courses, as well as a plan for how to efficiently achieve new skills, can reduce the length of unemployment as well.
Top companies that care about the employee experience – including the experience for departing team members – and their company’s brand reputation understand that supporting employees by providing outplacement is a worthwhile investment. Organizations that offer outplacement at a time like this when so many individuals are unemployed will be perceived in a positive light compared to others, which will better position these organizations to attract top talent and new business when the economy recovers. Employers may also find that employees impacted by layoffs decide to eventually return as employees, contractors or perhaps customers. Maintaining a positive relationship with departing employees by providing outplacement is an investment in future relationships.
In the next 12 months, 47% of companies that have already reduced their workforce indicate they are likely to make additional cuts to their workforces – in anticipation of continued business contraction. Additionally, while nearly half (49%) hope to rehire laid-off employees once restrictions ease, they plan to bring back only about 37% of their workforce. This data indicates that once business restrictions ease, unemployment levels likely won’t return to pre-pandemic levels right away, as only a percentage (<40%) will be rehired.
Whether or not your organization expects additional disruptions in the coming months, it’s always beneficial to have a plan in place to manage sudden workforce shifts. By creating a culture that supports ongoing talent mobility through such measures as redeployment, skilling and outplacement, you can build a workforce that is better positioned to navigate any challenges that may come your way.