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June 2020

Compensation practices in times of crisis: A look ahead

Beyond the reactive measures presented in our previous bulletin,¹ we are currently witnessing fundamental social, societal, and organizational changes. The pandemic has shined a light on long-dormant issues that can no longer be avoided. One thing is certain, the labour shortages that had come to a head prior to the COVID-19 pandemic are not going anywhere—and their boomerang effect may be amplified by the development of collective awareness that will drive real change among organizations.

Food for thought
  • Work from home: two sides of the same coin
    The current context has pushed companies to embrace telework, compelling even the most reluctant business leaders to accept and adopt this measure. Organizations that have been successful in maintaining and even increasing their efficiency will undoubtedly be more open to work-from-home arrangements and optimize various IT tools. On the other hand, the impacts of working remotely for a long period will certainly have highlighted the importance of “working together” and being part of a group. Our new reality will likely vary between these two extremes before reaching the right balance.


  • Striving for stability
    Since the 2008-2009 financial crisis, we’ve seen a significant surge in entrepreneurship—which includes self-employed workers and freelancers—and the gig economy. Some of the undeniable benefits of this type of work are flexibility for workers and reduced fixed costs for work providers. On the other hand, these workers must contend with uncertainty and job instability.While some companies are ramping up efforts to maximize their employees’ job and financial security during these challenging times, freelance workers only have themselves to rely on. It should come as no surprise that stable jobs will become more appealing in the coming weeks. Conversely, since permanent employees represent a significant cost for organizations—many of which are always seeking ways to cut costs—employers may be more prudent when planning on hiring for permanent positions.


  • Flexible work schedules and revitalized compensation
    The pandemic has prompted organizations to review their ways of doing business. For example, to accommodate employees with family responsibilities during working hours, many organizations have allowed for schedule accommodations. These new schedules, which were once considered non-standard, have filled a need that consumers had been asking for, which is to have access to service outside “regular” business hours. This includes customer service centres. On the other hand, grocery stores and other retailers have had to limit their business hours to comply with public health measures. To cope with intense peak periods or fill positions essential to the company’s operations, some organizations have been offering bonuses. Moving forward, this revitalization of compensation based on supply and demand could become a more common practice.


  • Salary equity vs. societal equity 
    The events of this past spring have generated a good amount of goodwill for certain types of jobs, which have suddenly become invaluable in the eyes of society. This includes jobs in long-term care centres (also known as CHSLDs in Quebec), grocery stores, pharmacies, and transportation of goods. But beyond salary equity, what about societal equity? We can expect experts to analyze the contribution of jobs to society and their compensation potential, bringing to light the concept of societal equity.


  • Performance management and variable compensation
    While no one knows how long the crisis will last or what the post-crisis situation will look like, transitional measures related to variable compensation should remain transitional. Caution should be exercised at this stage, especially for programs and practices such as bonuses and performance management. Even if they are unable to pay performance bonuses, companies should continue to evaluate performance and provide feedback to their employees. This traditional process, which is the subject of debate even in the best of times, may seem even more unpleasant now given limited human contact, the difficulty in observing behaviours, and the fact that employee performance may not even be rewarded. However, good old recognition methods—tweaked to ensure they remain genuine yet relevant to the current situation—can be leveraged for greater employee engagement.
Greater empathy among organizations

In a context where family, financial, professional, and environmental concerns are at the forefront, employee engagement should not be forgotten. Employers that seriously consider the individual needs of their employees and show empathy and human leadership are sure to stay one step ahead.

Every decision, initiative, memo, or silence sends a message to employees about the true nature, philosophy and values of the company. For things to successfully go back to normal—albeit a new normal—every little bit counts today. Let’s take advantage of the repercussions of the pandemic to develop greater awareness and make positive, lasting changes to the world of work… with the hope that these changes will spread.

Normandin Beaudry’s consultants will continue to closely monitor the compensation sector and will keep you informed of future developments. Feel free to contact us if you have any questions.