Colorado employers have trimmed what they expect to hand out in raises this year after statewide closures were ordered to slow the spread of the COVID-19 virus, according to a survey.
In the first part of the year, Colorado employers surveyed annually by the Denver-based human resource nonprofit Employers Council said they expected to hand out raises averaging 3% in 2020 and 2.9% next year. But that survey was conducted between January and March, before Gov. Jared Polis imposed a stay-at-home order. Another survey, conducted May 1, just after the state’s stay-at-home expired, found that the state’s employers had reduced those planned raises to 1.1% in 2020 and 1.7% in 2021.
“After COVID, a majority of employers chose to postpone or freeze wage increases. My guess is that those who did award pay increases were those who were essential businesses,” including grocery stores and health care, said Sue Wolf, the council’s surveys director. “I believe many employees were OK with not getting an increase if they could maintain their jobs, given the level of unemployment we had never seen before.”
Colorado’s unemployment surged to a record 12.2% in April before falling to 10.2% in May as an estimated 20% of workers laid off or furloughed during the stay-at-home order returned to work.
The Employers Council plans to survey employers again early next month to update wage increase plans. Wolf said she expects planned raises to be further reduced over fears of a resurgence of COVID-19 cases in the fall. She doubts many employers will have concrete plans to raise wages in 2021, based on the uncertainty resulting from the virus.
“Right now, 2021 seems too far off for employers to project wage increases,” Wolf said. “I’m expecting to see another (downward) shift in the July survey, especially since we won’t know anything about a resurgence at that point. There is so much uncertainty. Even what has opened up is not opened up completely, so employers have not brought back all of their employees, though they do have more responsibilities for sanitation.”
The May survey also found most employers had postponed hiring to cut expenses, and a greater percentage of employers were cutting hours and wages than were furloughing or laying off workers. That survey also showed employers have been slow to order employees back to the office in the wake of the stay-at-home order, with employers saying an average of 44% of their workforce were still working from home.
“It seems like employers were trying to avoid more dramatic cost-reduction strategies like postponing hiring and reducing hours and pay,” Wolf said. “I also believe it will hard for employers to mandate that employees return to the office on a five-day-a-week schedule. COVID appears to be a turning point for the move to more flexible work arrangements.”
The first survey, conducted before the pandemic, received responses from 439 Colorado employers (another 69 responded from Arizona, Utah and Wyoming), including 59 from the Colorado Springs area. The second survey, conducted during the first week of May, received 295 responses from Colorado and another 105 from Arizona, Utah and Wyoming.