pulse survey report: adapting compensation, benefits and ......benefits and workforce management...

Prepared by Health Solutions LatAm

Pulse Survey Report:

Adapting Compensation, Benefits and

Workforce Management Strategies in

Response to COVID-19Latin America Edition

Health Solutions Latin America

© 2020 Aon plc. All rights reserved. For internal client use only. 2

Summary

In light of the rapid evolution of the COVID-19 pandemic and its broad social and economic

implications, we consulted with our clients to learn how they are adapting their compensation,

benefits and workforce management strategies.

This crisis is generating an unprecedented impact in Latin America. Therefore, it is even more

relevant to identify the practices that companies have implemented in the Region to provide

an effective response in terms of:

▪ Compensation cost management to preserve business operations.

▪ Well-being, protection and support measures for employees.

▪ Actions to manage the workforce and its flexibility in the “new normal”.

▪ Decisions related to insured benefits.

▪ Employee communication practices.

▪ Outlook and strategy.

Our survey counted on 605 companies throughout Latin America in the main countries where

Aon is a multi-sector and multi-country consultant.

Survey

completion

April 28

Survey onset

April 20

Delivery of

results

May 6



Survey content

Profile of the participants 6

Compensation cost management 11

Special compensation actions 20

Well-being, protection and support measures

for employees 25

Workforce hiring and management 30

Insurable benefits 40

Communications with employees 47

Outlook and strategy 50

Additional information 56

TBD



▪ As the days go by and COVID-9 cases increase in Latin

America, we see significant impacts on the economies of the

countries. Companies begin to face financial challenges, which

is why they need to implement some actions as a reaction and

others as prevention to protect the company’s workforce and

sustainability.

▪ Certainly the decisions that companies make to mitigate

expenses vary based on the industrial sector to which they

belong, financial situation, philosophy, culture, among other

factors, which is why these measures may in some cases seem

aggressive and, in others cases, conservative. Some of them

include:

– Cancel the salary increase planned for this year. 74% of

the companies that have reported implementing this

action will affect 88% of their personnel, and some may

offset the increase by a few months. It is worth

mentioning that other companies had already granted the

increase when the pandemic began.

– 24.8% of the sample reported a non-voluntary decrease

in wages; the range of reduction will be from 20% to 30%

for 1 to 3 months. Companies will request the legal labor

advice that applies in each country.

– Using the vacation resource is a highly prevalent action,

65.3% of the sample has encouraged employees to take

early vacations and 86.5% of companies suggest using

vacation accumulated before the pandemic.

▪ So far, contributions to retirement plans have not been affected

by the economic impacts of the pandemic on most participating

companies that grant this benefit.

▪ The management or reduction of expenses in the Human

Resources area focused on canceling the use of consultants or

suppliers to minimize the harm to their payroll.

▪ The high prevalence indicates that a large number of

companies have not currently implemented special payment

programs to compensate high-risk employees with respect to

COVID-19.

▪ With the economic impact of the pandemic, most of the

companies did not have the resources to grant special

payments to their employees; the few resources allocated are

focused on providing support to acquire adequate equipment for

work at home.

Executive Summary



▪ The emergence of COVID-19 accelerated the digital

transformation of companies and gave greater priority to caring

for the well-being of employees. The new digital tools are

alternatives that companies have adopted to promote the

general health of their people.

▪ The high economic uncertainty faced by most industries and

economic sectors has led a percentage of companies, even a

minority, to take steps to reduce the workforce through layoffs

and unpaid leave.

▪ The vast majority of companies that offer benefits such as

health plans and life insurance to their employees have tried to

protect this benefit. In exceptional cases, they expanded

coverage to other relatives or decided to assume out-of-pocket

expenses for events arising from COVID-19.

▪ The business continuity plan intends to take on challenging

scenarios. Infectious diseases can vary in duration and

severity, which will limit internal and external employees,

suppliers and clients to equipment, services and supplies.

▪ It is important that the companies continually assess the

impact. So 43.2% of respondents in Latin America adjusted the

business continuity plan.

▪ Another concern is to ensure that the necessary measures are

taken to do everything possible and fight the disease, which is

why protocols for safety measures are being created for the

return to the workplace.

▪ During this period of increased remote work, the human

resources department must make a great effort to ensure that

employees do not feel isolated and maintain a strong sense of

belonging.

▪ Companies are using virtual meeting video technology to

answer collaborators as much as possible.

▪ The main concerns of the resources department are health,

emotional impact and hygiene and safety in the workplace.

Therefore, we suggest continuing to offer support services for

parents, close family members through virtual communications

to support physical health for different demographic age

groups, in addition to healthy people.

Executive Summary



Demographics

Total number of responses: 609



Demographics



Demographics

Question:

Is your company considered a company of essential products or services and, consequently, continues to operate during

isolation orders issued by the government?



Question:

Is your company taking actions of COMPENSATION to manage or reduce

program costs?

Compensation cost management

Comments

Companies realized the

need to take measures to

deal with their economic

impacts; 54.8% of the

sample decided that their

plans focus on staff

compensation issues.



Question:

If your company took this action, the impacted group is:


Comments

It is important to consider

that the total sample has

602 companies and, from

there, 332 decided to adopt

Compensation measures;

74% reported canceling the

salary increase for this

year; we observed that

most of the companies that

implemented these actions

are impacting all

employees.

Number of Responses = 332



Question:

Duration of the action:


Comments

Most companies think that

the impact of the actions will

last from 1 to 3 months,

which correlates with the

date that the companies

think that they will return to

their normal operations. 36%

think that the impact on the

bonus can last from 7

months to a year.




Question:

Percentage (%) reduction per employee


Comments

The salary reduction

percentage range is from

10% to 20% when the

measure is voluntary, and

from 20% to 30% when

non-voluntary.

In bonuses, the reduction

will be 51% when it is not

voluntary; consider that

only 17% of companies

took this action.




Question:

Actions taken in your company to manage or reduce the compensation costs or to protect employees


Comments

A highly prevalent action

has been the option for

employees to take

accumulated vacations

days before the pandemic;

not unpaid leave.



Question:

Duration of the action


Comments

Most companies consider

that these actions will also

last from 1 to 3 months, but

the second highest

prevalence estimates an

impact between 4 and 6

months.




Question:

Did you take action against the contribution to the employee retirement plan, where permitted by law?


Comments

We note that, at the

moment, Latin American

companies have reduced

only their contribution to the

employee retirement plan

by 2.1%, while only 1.0%

eliminated their contribution

to the plan.




Question:

What OTHER actions is your company taking to manage or reduce expenses with human

resources?


Comments

Regarding the

management of expenses

in the Human Resources

area, half of the

participating companies

canceled or postponed the

use of consultants or

suppliers, and 27% applied

the same measure to

benefits in the workplace.




Question:

Has your company implemented special payment programs (e.g., risk payment, bonus payment) to

compensate employers who may have high-risk roles with respect to COVID-19?

Special compensation actions

Comments

A large number of

companies (77%) have not

implemented risk payment

programs related to COVID-

19; only 13% started to

consider it, and only 9.2%

adopted these measures in

the face of risk.



Question:

Who is eligible for special payment programs designed to compensate employees who may be in high-

risk roles?


Comments

Eligibility of employees for

payment in high-risk roles,

in descending order, is

61% production

employees, 46% logistics,

39% production employees

and other groups, and only

21% employees in direct

contact with outsiders.




Question:

How would you define your special payment system for employees who can perform

high-risk roles?


Comments

In almost the same way,

companies have

implemented special

payment systems for high-

risk roles, 29% as a

recurring fixed amount,

27% as a one-time

payment, and 23% as a

percentage of the base

salary.




Question:

What special payments has your company implemented to help employees in

general?


Comments

Currently, the majority of

participating companies

(71%) have no help in the

form of special payments

for employees and only 9%

focused on equipment to

work from home, 5% on

compensation for sales

personnel and 5% on one-

time payments.




Question:

What employee well-being measures has your company taken specifically in response to COVID-19?

Well-being, protection and support measures for employees

Comments

The promotion and

implementation of Employee

Support Programs is highly

relevant among the well-

being measures adopted by

the company. Additionally,

flexibility in working from

home and caring for the

most vulnerable population

are the most prevalent

actions.




Question:

What safety measures has your company taken specifically to protect employees in response to COVID-

19?


Comments

Restricting travel (81%),

limiting access to the

workplace (81%), and

improving cleaning protocols

(80%) have been the most

frequent measures

companies have taken to

protect their employees.

74% of the participants also

guaranteed the biosecurity

equipment necessary to

continue their operation.




Question:

Are the following health and well-being actions implemented in your company in response to the COVID-

19 contingency?




▪ The vast majority of companies have adopted some strategy

or action to promote the well-being of their employees.

▪ Before COVID-19, 36.4% of companies had already

implemented the home office, and in response to the

emergency, an additional 61% adopted this practice.

▪ Digital transformation in health and well-being has also

become a priority for companies. For example, Telemedicine

has been adopted by 37%, reaching 63% of companies, and

new digital solutions, such as remote diagnostics, were

implemented by 33% of the companies, as well as digital

well-being apps in 21% of the participants, both in response

to COVID-19.

▪ On the other hand, the concern for emotional well-being has

led companies to act more quickly in the implementation of

new programs (+36%), followed by physical well-being

programs (34%), mainly due to the need to maintain healthy

habits in the new modalities of remote work.

▪ Additionally, there is evidence of a greater expectation of

adopting a culture of well-being in the “new normal”, with

digital solutions that generate greater connectivity between

the company and the employee and promote healthy

practices in various dimensions of well-being, by adding

social, financial and career.




Question:

Does your company plan to reevaluate and adjust performance objectives in light of the COVID-19

situation?

Workforce hiring and management

Comments

There is still high uncertainty

regarding the performance

that companies will have this

year. 40% have already

implemented adjustments to

their objectives or will do so

soon, while 19% continue

with their initial plan. 40%

indicated that they still do

not have the certainty to

make this adjustment of

performance objectives.



Question:

What best describes your hiring decisions right now?


Comments

Employment is one of the

economic variables most

impacted by the emergency.

42% of companies indicated a

freeze on new revenue, and

another 40% are handling

selective or critical hiring. Only

4.9% of companies, especially

those with essential services,

accelerated their hiring.



Question:

Has your company implemented a virtual recruitment

process?

Workforce hiring and managementQuestion:

Has your company implemented a virtual induction and

onboarding process for new employees?

Comments

Following digital

transformation processes

currently promoted by

COVID-19, 71% of

companies are carrying out

virtual recruitment

processes. Similarly,

added to the 37% that

today already carry out

digital incorporation

processes, 22% started

these practices.



Question:

Are you currently reducing your workforce through

dismissals?


What type of workforce are you considering reducing through

dismissals?




Question:

Are you currently reducing your workforce through leave (reducing hours

and pay to zero), but with the intention of bringing employees back in

with pre-leave payment and hours?


What type of workforce are you considering reducing through leave?




Question:

For what period is your company allowing or promoting unpaid

employee leave?


How is unpaid leave structured?




Does your company require employees to request vacation or paid time off before unpaid leave begins?





Looking ahead, what aspects of your future workforce management strategy do you think could be

accelerated by the experience of responding to COVID-19?




▪ The most severe measures that companies adopt are

dismissals and unpaid leave or permits for their employees.

▪ Currently, 8.7% of companies have taken this action and

indicated in 40% of cases that this measure impacts all

employees. 19% of companies stated that, although they

have not done so, it is a decision they are evaluating to

make.

▪ Likewise, 12.2% of companies have reduced their workforce

through unpaid leave, and 41% of which completely stopped

working activities. On the other hand, 22% have reduced

their working hours, while 11% redefined the structure of the

workday and escalated shifts to reduce the proportion of

employees in the workplace.

▪ The measures of unpaid leave or permits, in 40% of the

cases, are foreseen between one to four weeks, and 25%

foresee extending up to 8 weeks. In the most severe cases,

3% of companies will apply this measure for more than 12

weeks.

▪ One in four companies asked their employees to anticipate

their vacation before taking the vacation measure.

▪ This “new normal” challenges the usual practices of

workforce management, and the challenges associated with

remote work (85%) and digital transformation (66%) are

those that deserve the most attention from the leaders of the

Human Talent areas.




Insurable benefitsQuestion:

In your company, which of the following insurable benefits are offered to employees?




Please check the insurances that remain active during the unpaid leave:




Are you having changes in the eligibility of the insured group in response to COVID-19?

Health Plans

Comments

It is noteworthy that within

the companies that cover

the insured health plans of

their people, 16% included

the holders in their insured

group in response to

COVID-19, and 13.6%

extended the benefit to the

immediate relatives of the

employee.




Are you having changes in the eligibility of the insured group in response to COVID-19?

Life Insurance

Comments

Similarly, the life insurance

has also undergone

changes in the composition

of the insured group. The

companies indicated that in

15 of the cases they

included the Employees

and in 7.4% their

immediate relatives as a

benefit amid the COVID-19

contingency.




Are you having changes in the benefit contribution in response to COVID-19?

Comments

Companies that offer

insured health, life and

dental benefits to their

employees have tried to

maintain the same

contribution to the benefit,

while in a lower

percentage, between 3.2%

and 4.3%, they have

increased their contribution

to the benefit.




Will the company pay the deductible/coinsurance/copayment (as applicable) for medical events

associated with COVID-19?

Comments

As part of the actions that

benefit employees, 27% of

the companies indicated

that they will cover

copayments/deductibles/coi

nsurances for Holders in

cases of COVID-19. In

addition, 20% will support

the immediate relatives of

their employees with this

contribution.



Question:

What information does your company provide to employees in response to COVID-19?

Communications to employees

Comments

The main challenges of

companies focus on training

their employees regarding

COVID-19.

It is also important to keep

them updated on the actions

taken in health, safety, and

business continuity.




Question:

How did COVID-19 impact your company’s overall communication approach?

Communications to employees

Comments

The impact that COVID-19

had on the overall approach to

communication in companies

is the 89.46% increase in the

use of videos and web

conferences to deliver

messages.

The frequency with which

communication updates are

sent has increased by 86.55%;

79.86% by email.




Question:

In your opinion, when do you think your company will resume normal operations?

Outlook and strategy

Comments

37.1% of companies in

Latin America believe that

normal operations should

resume in June.




Question:

Due to the emergence of COVID-19, does your company plan to adjust the business continuity plan?


Comments

Infectious diseases like

COVID-19 can vary in

duration and severity;

therefore, companies plan

to adjust the business

continuity plan. 43.2% of

respondents will.




Question:

Does your company have protocols for returning to work?


Comments

For companies, their

employees are more

important than anything

and they know that COVID-

19 will have an impact on

them. Therefore, 39.7% of

respondents are

developing a protocol for

return to work.




Question:

Do you think your human resources department was adequately trained, equipped and ready to face the

challenges posed by COVID-19?


Comments

Human resources

departments in Latin

America are being

challenged by this

pandemic, but they are

responding appropriately.




Question:

What is your biggest concern when you return to the workplace?


Comments

The three main concerns of

companies when they

return to the workplace are:

1. Health

2. Emotional impact

3. Hygiene and safety

in the workplace




Employee management and labor practices

in response to COVID-19

Additional information

Latin America Edition



▪ This document provides an overview of the response actions to COVID-19 that are being taken by the companies

that participated in the survey in terms of human talent management and business continuity.

▪ Aon has a team of specialists who will accompany you to understand the impact this emergency is having on talent

management and the health of its employees, in addition to review, improve or even prepare your business

continuity plan.

▪ We also have analytical and consultative solutions that allow us to identify the areas of opportunity in the

intervention of health and business risks, and to mitigate the impact that an event like the current one has on the

operation, from the perspective of health and insurance.

▪ In addition, the Aon team will be willing to provide you with advice regarding your exposure to business and health

risk, as well as the appropriate insurance coverage according to local market conditions.

How can we help?



Contact our team

If you have questions about this survey or would like to speak to our team about developing health, compensation, well-

being and business continuity programs and practices in response to COVID-19, please contact our leaders in the region.

Violetta Ostafin

CEO

Health Solutions & Retirement

Aon Latin America

[email protected]

Max Maggio

CCO

Health Solutions & Retirement

Aon Latin America

[email protected]

Nicolas Jiménez

Innovation & Analytics Manager

Health Solutions

Aon Latin America

[email protected]

Jose Luis Plana

CBO

Aon Latin America

[email protected]

Marcelo Munerato de Almeida

CCO

Aon Latin America

[email protected]

Health Solutions & Retirement Team - Latin America

Regional Leaders Team

Jeronimo Quesada

Affinity Practice Leader

Aon Latin America

[email protected]

mailto:[email protected]








Additional Aon Resources

For more information on Aon’s global response to COVID-19, including documentation on business continuity,

communications, cyber, health and risk management, insurance, supply chain challenges, among others, visit:

https://www.aon.com/event-response/coronavirus.aspx.

▪ Spanish: https://aon.io/ResponseSiteCO

▪ Portuguese: https://aon.io/ResponseSiteBR

We invite all companies to stay connected to Aon’s COVID-19 response websites to access the most up-to-date

information on how to deal with this pandemic at all levels of the company.

https://www.aon.com/event-response/coronavirus.aspx

https://aon.io/ResponseSiteCO

https://aon.io/ResponseSiteBR



Disclaimer and Terms of Use

COVID-19 Disclaimer: This document was prepared as an information resource for Aon’s clients and business partners. It is

intended to provide general guidance on exposures to potential risks, and not to provide medical advice or specific risk

circumstances. Due to the dynamic nature of infectious diseases, Aon is not responsible for the guidance provided. We strongly

encourage visitors and participants in this survey to seek additional on safety, medical, and epidemiologic information from credible

sources, such as the Centers for Disease Control and Prevention (CDC) and World Health Organization (WHO). With respect to

questions about insurance coverage, whether the coverage applies or whether a policy will respond to any risk or event, it is subject

to the specific terms and conditions of insurance policies and contracts and to the insurer's determinations.

Survey Disclaimer: This report provides general information and data as an information resource for Aon’s clients and business

partners. This report does not replace legal, tax, accounting or other specific advice associated with the business. We invite all

readers to consult with the appropriate advisors before taking action on the information in this report.

Terms of use: This report is intended for internal use only by eligible survey participants. The content of this report may not be

reused, reprinted, or redistributed without Aon’s express written consent.



About Aon

Aon plc (NYSE: AON) is a leading global professional services firm

providing a broad range of risk, retirement and health solutions. Our

50,000 colleagues in 120 countries empower results for clients by

using proprietary data and analytics to deliver insights that reduce

volatility and improve performance. The information in this document

and the statements made are of a general nature and are not

intended to address the circumstances of any particular individual or

entity. Although we strive to provide accurate and timely information

and to use sources that we believe are reliable, we cannot guarantee

that this information will be accurate on the date it is received or will

continue to be accurate in the future. No one should act on this

information without proper professional advice after a thorough

examination of the specific situation.

To learn more about our capabilities and about how we drive results

for clients, visit aon.mediaroom.com.

This survey was developed and prepared by the Health Solutions

practice in Latin America.

Health Solutions at Aon

Our consulting and brokerage capabilities allow us to have the

necessary experience to offer solutions to companies of all sizes and

sectors. We offer a global network of consultants who develop health

and benefit strategies that help clients reduce rising medical costs and

improve employee health and well-being.

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