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Survey on changes in salary and bonuses in response to the COVID-19 crisis

Posted by en world Japan

10 months ago

Ten percent of companies cut pay, and 11% cut bonuses
-en world Japan Survey on changes in salary and bonuses during the COVID-19 crisis-

In response to the COVID-19 crisis, en world Japan K.K. (headquarters: Chuo City, Tokyo, president: Vijay Deol), one of Japan’s largest staffing firms specializing in global human resources, conducted a questionnaire survey on changes in salary and bonuses during the COVID-19 crisis, and 269 companies of Foreign Capital Companies and global Japanese companies responded. 

Summary of survey results

■ 10% of companies cut pay in response to COVID-19. The most common answer was a pay cut of 10% or less.
■ 11% of companies cut bonuses in response to COVID-19. The most common answer was a bonus cut of 30% or less. 

Comments on the results

Vijay Deol, President &Representative Director

2020 was a challenging year for almost every business and obviously cost control was an important issue for those companies that experienced a negative impact on revenues from the COVID-19 pandemic. Interestingly, more Japanese companies were able to operate without pay cuts than foreign capital companies, however, those Japanese companies that did cut pay generally did so at a higher rate than foreign companies.  More companies cut bonuses than base pay, but in this respect Japanese and foreign capital companies had more similar responses.  Contrary to the approach with base salaries, Japanese companies had a larger proportion cutting bonuses at a low rate (<10%) compared to foreign companies that had a larger proportion cutting bonuses entirely.  Now that companies have adjusted and there is optimism with vaccines for COVID-19 being distributed, it will be interesting to see how 2021 evolves with regards to compensation levels.

Details of survey results

1. 10% of companies cut pay in response to COVID-19. The most common answer was a pay cut of 10% or less. (Fig.1, Fig.2)

When we asked companies if they cut pay in response to the COVID-19 pandemic, 10% of companies responded “Yes” (Foreign Capital Companies: 11%, Japanese Companies: 7%). However, the most common answer, at 87%, was "No" (Foreign Capital Companies: 84%, Japanese Companies: 91%). Companies that implemented a pay cut were further asked about the reduction rate. The most common answer was "1% to 10%" (Foreign Capital Companies: 59%, Japanese Companies: 40%), and with regard to Japanese Companies, the same percentage (40%) was found in “1% to 10% and “11% to 20%.” Detailed comments are shown on page 2.

[Fig.1] Did you cut pay in response to the COVID-19 outbreak?


[Fig. 2] Please respond if you implemented a pay cut. What was the reduction rate?

▼Open-ended comments regarding changes in pay
・Promotions have been suspended for employees around the world. (Foreign Capital Companies/ Manufacturing/Engineering/ Automobile).
・Annual promotions have been suspended. (Foreign Capital Companies/Legal/Compliance)
・We implemented a pay cut but reimbursed employees later as performance recovered more than expected. (Foreign Capital Companies/Health care/Pharmaceutical/Life Science)
・We are considering a pay increase to eliminate or at least reduce COVID-19-related anxiety. (Japanese Companies/ Manufacturing/Engineering/ Automobile)

2. 11% of companies cut bonuses in response to COVID-19. The most common answer was a bonus cut of 30% or less.  (Fig.3, Fig.4)

We asked companies if they cut bonuses in response to the COVID-19 pandemic. The most common answer, at 72%, was “No ” (Foreign Capital Companies: 71%, Japanese Companies: 74%). 11% of companies responded “Yes” (Foreign Capital Companies: 11%, Japanese Companies: 11%), and in this case, the survey showed that a high percentage of companies cut the bonuses of all employees regardless of employment status. Also, 6% of companies answered “Plan to implement in the near future” (Foreign Capital Companies: 6%, Japanese Companies: 5%). Companies that implemented a bonus cut were further asked about the reduction rate, the most common answer was "11% to 30%" (Foreign Capital Companies: 19%, Japanese Companies: 20%). Detailed comments are shown on page 3.

[Fig.3] Did you cut bonuses of employees in response to COVID-19?


[Fig. 4] Please respond if you implemented a bonus cut. What was the reduction rate?


​▼Open-ended comments regarding bonuses
・We paid a one-time bonus because overall performance was better than expected on a global level. (Foreign Capital Companies/Health care/Pharmaceutical/Life Science)
・We cut the bonuses of all employees, excluding those with specific performance ratings. (Foreign Capital Companies/IT/Communications)
・It is up to the current period performance. (Japanese Companies/IT/Communications)


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[Outline of the survey]
Survey method: Online survey
Area: Japan
Number of valid answers: 269
Period: November 4 - November 10, 2020
Respondent attribute: Foreign Capital Company  64% Japanese company 36%
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About en world Japan (https://www.enworld.com/)
en world Japan is a recruiting firm established in 1999 specializing in global human resources with offices in four countries in the Asia-Pacific region. We specialize in supporting Foreign Capital Companies and global Japanese companies in recruiting human resources for middle to high level positions. We help companies with recruitment and job seekers with career changes from every angle by staffing full-time workers, professional human resources, and executive human resources and providing recruitment process outsourcing solutions.


Contact information for inquiries about this news release
en world Japan K.K.  PR representative
Email : enworld-pr@enworld.com
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