Wage increases likely smaller in wake of pandemic

Phil Castle, The Business Times

Colorado employers still expect to increase wages in 2021, although less in the aftermath of a pandemic than before coronavirus hit.

Meanwhile, more employees will continue to work remotely, according to the latest results of surveys conducted by the Employers Council.

Those trends likely will occur on the Western Slope the same as other areas of the state, said Sue Wolf, surveys director for the organization. “All geographic areas are following along.”

The Employers Council offers a variety of legal and human resource services to a total of more than 4,000 employer members in Colorado as well as Arizona, Utah and Wyoming. The organization has conducted compensation surveys for more than 70 years to enable members to compare the wages they pay with the marketplace.

In a telephone interview with the Business Times, Wolf reviewed what she said were the different results of surveys conducted before the onset of the coronavirus pandemic and afterward.

The 2020 benchmark compensation survey conducted from January to March drew responses from 508 employers with a total of more than 53,000 employees. Of the 439 participating employers from Colorado, 37 were from Western Colorado and 45 from resort areas, most of those on the Western Slope.

According to the benchmark survey, Colorado employers reported plans to increase pay an average of 3 percent in 2020 and 2.9 percent in 2021.

Western Slope employers projected a pay increase of 2.9 percent in 2020 and 2.6 percent in 2021. Employers in resort areas of Colorado said they expected to increase wages 3.1 percent in 2020 and 2.9 percent in 2021.

Projected wage increases were slightly higher from employers in the Denver and Boulder area and slightly lower from employers in Southern Colorado.

Average hourly wages for 2020 for entry level new hires by Western Slope employers ranged from $16.02 for office and clerical positions to $16.88 for manufacturing jobs to $16.94 for material handling positions and $17.47 for maintenance jobs.

Colorado employers lowered expectations for wage increases after the pandemic hit, according to the results of a salary budget update survey conducted in May.

According to the budget update survey, Colorado employers expected to increase wages 1.1 percent in 2020 and 1.7 percent in 2021. Separate information for Western Colorado wasn’t available.

Wolf said the smaller pay increases aren’t surprising given the strategies employers said they implemented to cut costs in the aftermath of the pandemic.

According to the results of one survey conducted in May, 17 percent of Colorado employers  reported reducing wages and 26 percent reduced hours.

In addition, 23 percent of Colorado employers responding to the May survey postponed planned pay increases, 14 percent postponed planned bonuses and 52 percent postponed planned hiring. While 20 percent of employers reported furloughs, 17 percent reported layoffs.

Of those responding to a May 1 survey, 36 percent said they were extremely concerned about the effects of the pandemic on the financial stability of their operations. A total of 60 percent said they where somewhat or slightly concerned. The remaining 4 percent said they weren’t concerned.

Survey results collected by the Employers Council also indicate more employees will continue to work remotely.

Of the changes Colorado employers reported implementing in response to the pandemic, 67 percent changed remote work policies and 40 percent changed business travel policies.

Prior to the coronavirus pandemic,
48 percent of Colorado employers reported an average of 18 percent of their staffs worked remotely. At 47 percent, nearly half of employers reported no remote work force at that time.

During stay-at-home restrictions imposed in the pandemic, 95 percent of employees reported an average of 71 percent of their staffs worked remotely.

Although many employees since have been allowed the option to  return to work,
58 percent of employers reported an average of 44 percent of their staffs working remotely. Another 14 percent of employers reported no remote work force.

Wolf said many employers likely will continue to offer remote work options to maintain a competitive advantage in retaining employees.

Looking ahead, Wolf said she wouldn’t speculate about wages, remote work or other labor trends. But given the lack of certainty, she expects many employers likely will “hold tight” through the remainder of this year, then reassess the situation as more information becomes available.

For more about information and resources available from the Employers Council, log on to www.employerscouncil.org.