Employers Manage Staffing Costs and Avoid Layoffs Whenever Possible

LOS ANGELES, May 26, 2020 /PRNewswire/ -- More than half of the employers responding to a national survey conducted by talent development accelerator LeadersUp report they are finding creative ways to reduce staffing costs and delay layoffs. The survey revealed gaps in employer support for current and displaced workers and opportunities to upskill their workforce and advance virtual talent solutions through the crisis and the recovery.

The report, "Identifying Opportunities for Rapid Response and Inclusive Economic Recovery," is the second in a three-part "Flatten the Curve, Bridge the Divide Insights" series and relies primarily on respondents operating in at least one of three LeadersUp target markets: Los Angeles, the San Francisco Bay area and Chicago. LeadersUp is a social enterprise that connects employers to the untapped potential of the next generation of diverse talent to address labor market disparities and economic inequities in poor communities of color.

Employers reported they are reducing staffing costs by either closing their offices, decreasing executive salaries and employee wages, furloughing full-time or part-time staff, and as a last resort, laying off employees. Just 22% said they had initiated layoffs and 10% of respondents indicated they are hiring.

The report also revealed that more can be done to support employed and displaced talent during the COVID-19 crisis. Less than half of the respondents, 45%, said they are referring full-time employees with benefits to their Employee Assistance Program (EAP). Research shows EAPs can be effective but are woefully underutilized and are nonexistent at most small companies. This is particularly damaging for the three out of four young people between the ages of 16-24 who, according to the Bureau of Labor Statistics, are more likely to be hourly workers and may not have access to EAP programs due to their part-time status.

In addition, employers' responses indicated that the majority, 70%, are providing work-from-home options and more than half said they are using virtual conferencing to conduct business and believe their reliance on virtual tools will increase. Although 60% of employers reported being prepared to implement virtual solutions during the coronavirus response, respondents said nearly half, 49%, of their employees have not adjusted well to the virtual workspace. This is particularly troubling since nearly 60% of all employers believe that their reliance on virtual solutions will "likely" or "very likely" increase post-COVID-19. If virtual solutions are here to stay, then employers may need to consider providing new skills and supports to upskill their workforce. In the LeadersUp Flatten the Curve, Bridge the Divide Young Adult Survey conducted between March 23-28, 65% of respondents ages 16-30 said it is extremely or very important to gain new skills during this unprecedented time.

"These findings reveal opportunities for employers to leverage this time of crisis to improve the skills of the most valuable yet most vulnerable members of their workforce," said LeadersUp President and CEO Jeffery Wallace. "LeadersUp stands ready to partner with employers to facilitate workforce training to ensure an economic recovery that benefits their bottom line and the next generation of diverse talent."

 The "Identifying Opportunities for Rapid Response and Inclusive Economic Recovery" report is based on two surveys conducted from April 13 to May 5, 2020. The first, in partnership with Los Angeles World Airports' (LAWA) Business, Jobs and Social Responsibility Division (BJSR), received responses from 53 employers (62% of respondents) at LAX and Van Nuys airports. The second survey gathered responses from 32 members (38% of respondents) of the LeadersUp Future at Work Leadership Network, and 12 public sector and four nonprofit employers.

Nearly 60% of all survey respondents are associated with the air travel industry, which has been severely impacted by the COVID-19 outbreak due to travel restrictions and social distancing measures imposed to limit the spread of the virus. Some 80% of companies in this sector have either laid-off employees (60%), closed operations, or furloughed employees, compared to 35% of non-air travel sector employers, according to the LAWA survey. Approximately 30% of respondents work for a large company that employs more than 1,000 workers, including the freight and commercial trucking divisions of a major transportation, distribution and logistics (TDL) company; a global financial services firm; one of the largest nonprofit healthcare plans in the U.S.; and a major U.S. airline. 

About LeadersUp: Established in 2013 by the Starbucks Coffee Co. and forward-thinking business leaders, LeadersUp is an independent 501(c)3 nonprofit and talent development accelerator that bridges the divide between the untapped potential of young people and the business challenge of finding and keeping the best talent. LeadersUp provides professional development training and career opportunities in Chicago, Los Angeles and the Bay Area/Silicon Valley to connect the untapped potential of young adults who are out of work and not in school with employers in need of talent.

Media contacts: Karen Lewis | [email protected] | 323-424-9400 (LA/San Francisco Bay area) or Shawn Taylor | [email protected] | 312-371-6260 (Chicago).

SOURCE LeadersUp