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Insights from PayScale Leadership on How to Navigate Uncertainty in the Workplace

In times of uncertainty, we have to come together as a community. In our webinar last week, PayScale executive leaders, including CEO Scott Torey, CFO James Redfern and CMO Adrianna Burrows, offered insights and answered questions related to workforce planning and compensation trends during the current crisis.

The discussion opened with a reflection on the positives. In short, it’s really about perspective. Perspective allows us to separate out what is important, which gives us confidence to make decisions and rise as leaders. On a personal level, this means being reminded and feeling grateful for what really matters: family, friends, and our health. On a professional level, operating a business during a crisis instills sharper focus on priorities and forces every activity to be about value.

Compensation has an important role to play in this story. In an economic downturn, the number one controllable expense that any organization has is payroll, but the degree to which employees feel valued and engaged is intrinsically tied to how they are paid. A strategic approach to compensation and benefits is therefore as critical, if not more critical, in an economic downturn as in an economic boom, especially one that is as steep and startling as the current situation has turned out to be.

PayScale is uniquely positioned to provide unparalleled assistance to HR leaders and compensation professionals in such tough and volatile times. We provide compensation management software to clients representing all segments of business, from SMBs to the largest enterprises in the word. We have visitors to our website providing us with hundreds of millions of records on what is happening in the market in real time in terms of compensation. This has resulted in us becoming the single largest platform for up-to-date data and analytics on salary, wages, and benefits on the market.

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There are four things our customers should know we provide in these unprecedented times:

  • Thought leadership and data analysis on compensation best practices, including how to respond to the current crisis
  • Technology that can bring you real insights and solutions on how to manage pay in a mature and effective manner
  • Access to verified market data, whether company-sourced, crowdsourced or from a third-party salary market data provider
  • Services — whether by PayScale or one of our partners — to guide you through this crisis

The following constitutes a summary of the insights shared by PayScale’s executive leaders during the webinar on five primary topics: 1) the top priorities and challenges organizations are facing right now, 2) branding and engagement, 3) compensation planning and benefits, 4) the importance of communications, and 5) how PayScale product solutions can help.

To listen to the entire webinar, please download the recording.

Top Challenges and Priorities

Different companies are facing different challenges right now. Some are experiencing a surge in demand while others have completely — or nearly completely — lost their customer base. How companies will emerge from the current crisis will depend a lot on how they entered it as well as what they choose to do to seize on what opportunities they have to deliver value to customers in this new normal.

In times of uncertainty and distress, companies look to shore up finances. The first level is to enact hiring freezes, control travel, cut expenses, hold back on consultants, contractors and contingency labor, and delay capital expenses. The second level is to review spend and see if adjustments can be made to payment terms with deferments on expenses like rent as well as discretionary items. The third level is to look at payroll and employees, which is both an organization’s greatest asset and also its greatest expense.

Responses to cutting employee expenditures can vary widely. Some organizations may look to cut back on benefits expenses, such as suspending 401K matching, or freeze merit pay increases, or reduce pay. Other organizations will consider furloughing or laying off employees. The right direction, as well as the severity needed, depends a lot on the industry, location, and health of the business as well as your view on how long and how dark the current situation is going to get.

If you have to decide between layoffs and pay cuts, it can help to revisit your mission and purpose and reflect on the decision in context of your strategy and the core values of your business.

You should also look at where your opportunities for growth are strongest and make bold decisions to pivot in the direction that allows you to provide the most value to customers in the current circumstances. For example, for PayScale, the SMB segment is the most challenged, but there is a lot of opportunity in the enterprise segment where we can bring new products and data that would be of tremendous value to customers, particularly in a down economy.

For most businesses, getting to the right decision will involve getting the data down on paper, reviewing all of your resources, and contextualizing in terms of your industry, location, and overall financial health.

Beyond financial decisions, the most important thing that leadership and HR can do during a crisis is communicate effectively. Health and safety of employees should be paramount, which should include encouraging employees to work from home if they can, being understanding of the challenges associated with economic shut-down and being flexible with sick leave policies.

Insights on Employer Branding and Engagement

How has the current crisis changed the importance of employer branding?

Branding is not something you can pause in times of uncertainty. Brand is something you are always building and reinforcing at every touch point with customers, employees and job candidates. Arguably, brands are established more in times of crisis than times of prosperity. Constant communication is therefore critical. It’s not always going to be a smooth ride, but communication can help to level out the bumps.

When it comes to retaining top talent, especially if you have to furlough employees, communication is especially critical. The more connected and valued employees feel, the more likely they will be loyal to the company and invigorated to return when things are better.

Are we still in a War for Talent?

Although the market may no longer be candidate-driven, the War for Talent will continue for certain businesses, positions, and locations. For example, in the tech market, wages are still growing. Attracting leadership talent will also still require a strategic approach and competitive offers, especially if you are trying to convince someone to leave a stable position to join you at an unstable time. Networking and the ability to build personal relationships with candidates will be more important than ever.

However, we are seeing shifts in supply and demand from an economic perspective for a lot of occupations and roles. PayScale has the most up-to-date data on wage growth and losses by industry, occupation, and geography, which we will be sharing in the near future to help businesses refine their talent strategy in a new economy.

How can companies protect their culture with so much uncertainty in the workplace?

Company culture is an intrinsic part of brand and a critical component in how job candidates select a company to work for and why employees choose to remain with a company. When times are tough, there’s a tendency to want to put “culture” on the back burner, but this isn’t how culture works. Some organizations view culture are the fun things a company does, like happy hours and parties, but culture is defined more by what a company prioritizes, how it reacts, and how it treats its people. In this sense, the decision to put “culture” on the back burner during a crisis defines the culture of that business.

In other words, culture goes deep. It goes beyond the financial health of a business. A crisis is an opportunity to make your culture stronger than ever, to demonstrate company values and uphold principles and purpose. However, it isn’t something that can be owned by a single steward of culture. Defining the company culture largely falls on the shoulders of leadership, but it works its way down and every member of the company plays a hand in it.

Insights on Compensation Planning & Benefits

How should companies handle merit pay increases in this environment?

Most companies have a planning cycle that anticipates merit increases and promotions. Whether or not that plan needs to be revisited depends on your compensation strategy and the other decisions the company has made to stay financially healthy during this time.

For example, PayScale has made no changes in its policy around merit raises and promotions. We do them twice a year and that time isn’t upon us yet. Because we are a data-driven company we will rely on data to tell us whether we need to make changes to our policy on merit-based pay raises when the time arises.

Part of what we look at to determine our policy is the environment we are in as well as historical data for our market, such as the impact of the 2007-2009 recession on wages in the tech industry in Seattle, which has long been competitive. As such, we don’t see preemptively putting a freeze on merit increases and promotions as conducive to our talent strategy or the growth of our business. We may see a slow-down of merit increases this year, but we are not making a blanket statement at this point. If the situation permits, we want to continue to be a company that values performance.

How are companies handling PTO and sick pay balances?

The answer to this question depends a lot on where your business falls in the support curve for recent legislation around employee care. It’s important to be mindful and aware of what resources are available to you as well as how you must respond to be legally compliant.

From our 2020 Compensation Best Practices Report, we know that 11 percent of companies offered unlimited PTO in 2019. Our hypothesis is that more employers will explore this, both because of the accounting benefits and also because of the reality that in this environment you’re just going to have to trust employees more.

SHRM is also recommending that companies review their sick leave policy and extend sick leave for employees who contract the coronavirus, both from a humanitarian perspective and also from a practical consideration. Employees who cannot afford to take unpaid leave will come to work sick and infect others, which will hurt your business.

Our partner Mercer has polled organizations and reported that 40 percent are retaining their current sick leave policies, 35 have loosened their sick leave policies, and 25 percent are allowing employees to take leave as needed. These numbers are evolving.

Given the overall uncertainty in the workplace, the theme is to be human and to trust and support your employees right now.

Are there insights from the 2008 recession that might inform how things will move from here?

PayScale has been around for 15 years and has a treasure trove of data on historical wages. We took a look and found that there was a significant compression in pay after the Great Recession that took four to five years to recover. For the current crisis, we estimate a sharper wage drop with a sharper recovery. For example, our current data shows that wages in the retail and customer service industry dropped 8.8 percent between February and March, which gives you a sense of the steepness of the curve at present. Of course, the speed at which we go down can also inform the speed at which we recover, especially with help from government stimulus.

One area that employers should look out for during and after a recession is salary compression, which is when newer hires are paid more than tenured employers as wages start to improve over time. For this reason, compensation adjustments should include not only annual raises and merit raises based on performance, but also adjustments based on what the market has done by geographical location and job position. Compensation software makes it easier for companies to discover and resolve pay inequities such as this.

Insights on the Importance of Communication

When and how should we tell our employees about tough decisions like pay freezes and layoffs?

Every company having to make tough decisions right now has our sympathies. It’s not easy, but it’s important to remember that you’re not alone. Many companies are having to make and communicate difficult decisions.

At PayScale, we have attempted to be highly communicative. We are putting out weekly video updates on the data we are seeing that is informing our decisions as we make them.  We have also hosted all-hands company meetings to explain some of the more difficult decisions we have had to make, intentionally allowing time to explain the what, the why, and the how as well as answer employee questions.

The other thing we are doing is leveraging influencers within our organization and working with them to make sure they really understand the decisions we are making and can communicate them properly to others. As leaders, we want to eliminate unnecessary fear and uncertainty in the workplace and bring the focus to what we are going to do and what we can control. We can’t control external market factors, but we can control how we show up to engage our customers, how we build and deliver software, how we can be innovative in getting our prospects to talk with us, and how we provide value through unparalleled market data and insights.

What is PayScale doing to communicate effectively while working remotely?

We have a sophisticated approach to IT that has made it relatively painless for all of our employees to work from home while enjoying secure access to needed networks and systems. To communicate, we use a variety of collaboration tools and technology. We have been using Slack and Zoom, for example, for company chat and video conferencing. We also host virtual happy hours, deliver executive messages via video, and make sure that we actively solicit employee involvement in maintaining our culture even when we’re apart from each other.

Insights on the Value of PayScale Product Solutions During this Crisis

Why is compensation data and software relevant right now?

Compensation is a critical part of managing uncertainty in the workforce and having reliable market data is incredibly important in making pay decisions.

PayScale has 15 years of salary data as well as compensation planning experience to help HR and compensation professionals build compensation structures and maximize their payroll dollars, both in times of economic growth and economic contraction. With PayScale products and services, you have all the resources you need to create a compensation strategy and benchmark salary ranges for all of your job positions. In addition to helping you save money in the near-term, building out a sophisticated compensation strategy now will also help you win over top talent later when the economy shifts again.

Most importantly, PayScale has the freshest salary data on the market as well as multiple sources of data. We offer Company Sourced data and third-party survey data through our partners as well as Crowdsourced data that is continuously updated and verified by our data research team. This data is changing every week and provides PayScale customers with the most up-to-date pay data available to maximize payroll expenses without undercutting the talent you need to get through this crisis.

What is PayScale doing differently to help customers?

Right now, we’re concentrating on serving our most engaged customers, such as our enterprise and strategic market segments. We recognize that freshness of salary data is extremely important to these audiences right now. Fortunately, PayScale has a competitive advantage when it comes to fresh salary data. As such, we are preparing an offer of our Crowdsourced and Company Sourced data to new and existing customers of PayScale MarketPay as part of a free salary data promotion to help companies combat compensation challenges and uncertainty in the workplace.

This special promotion is available now until the end of June 2020.

For all the insights, you can listen to the full interview now as a recording.


If you are interested in learning more about our special offer and you are a current PayScale customer, please reach out to your customer service manager. If you are a new customer for PayScale, please request a demo and one of our representatives will get in touch with you.


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Amy Stewart
Sr. Content Marketing Manager at PayScale
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