REBA survey reveals UK employers planning to reduce working hours, impose leave or cut pay
While most employers (59%) have made no changes to contracts since the spread of coronavirus (COVID-19) hit the UK, as many as one in three (33%) employers plan to do so, a survey by Reward & Employee Benefits Association (REBA) has suggested.
REBA director Debi O'Donovan said: "This is a huge proportion of employers planning to make significant changes. We at REBA would expect that proportion to rise unless there is an external reassurance or support coming from government, or a medical breakthrough leading to the halting of the spread of coronavirus."
The survey, which had 111 responses, found that the most notable changes expected to impact employee contracts were deferred/reduced pay rises (44%), cancelled pay rises (31%), reducing working hours (25%), extended sabbaticals on offer (25%), deferred or reduced bonuses (19%), cancelled bonuses (13%), reduced pension contributions (13%) and enforced paid leave (6%)
Around 35% said they had done something new or difference in their wellbeing programme since COVID-19 (about 65% hadn't) and 55.5% said they were satisfied by their health insurer's response to coronavirus (almost 30% said they weren't).
"Just as we saw in the 2008 economic downturn, some employers are being quick to turn to reduced hours and enforced unpaid leave as a temporary way to reduce wage bills," said O'Donovan. "However, the smaller number of cancelled bonuses perhaps indicates that employers see the current situation as temporary, and they will need to retain vital staff to prepare for a post-coronavirus business recovery.
"Whether employers can reduce pension contributions will depend on being able to change employment contracts, or if this would fall foul of auto-enrolment legislation. However, this use of contribution holidays can suit both employees needing more cash in hand and employers wanting to reduce bills, and could be a better short-term solution rather than a long-term change."
The survey also found that employers have been using employee benefits and wellbeing programmes to support employees, with virtual GP services being added or extended.
Employee assistance programmes (EAPs) are also being upgraded or brought across the wider workforce globally and employers are communicating what packages are available to people while working from home.
Sixty percent of those responding - including firms such as John Lewis, Reuters and Virgin Media - had more than 1,000 employees and 28% have between 250-999 employees.
Recorded live at the COVER Mental Health & Wellbeing Summit
From the editor’s bookshelf
Open letter to industry
Nine useful tips
Jennifer Wallis lays out what we learnt at our recent mental health event