Workday salary bonus may pay workforce dividends
Workday is giving its employees a two-week bonus to help them deal with coronavirus-related costs. The move may result in improved retention and productivity.
Workday Inc. is giving the majority of its employees a two-week pay bonus in response to the coronavirus pandemic. The HCM cloud vendor announced its plan this week.
The company's action isn't too different from the government's idea of sending every American a check. It's providing aid to help employees cover the costs associated with this crisis.
The Workday salary bonus, a one-time payment, will cost the company about $80 million. It's to help employees with "any unforeseen costs and needs at their discretion," the HR vendor said. It employs about 12,000.
It comes off as altruistic, but the Workday salary bonus is also a strategic business move, said Atta Tarki, founder and CEO of executive-search firm ECA in Santa Monica, Calif. He is also the author of the just released Evidence-Based Recruiting (McGraw Hill, Feb. 2020).
The Workday salary bonus "builds higher loyalty, which translates to longer retention, more productivity -- all those metrics," Tarki said.
"A lot of companies and leadership teams are going to show their true colors in this environment," Tarki said. That is not to say that every company going through layoffs is a bad company, he said. It depends on their financial situation, he said.
Firms that can help employees are showing that statements such as "we put our employees first" have weight, Tarki said. "This is an opportunity to step up and show what they mean by that," he said.
Workday retains employees
The bonus helps the company retain employees, it can save a substantial amount of money in the cost of replacing lost workers, Tarki said.
Atta TarkiCEO, ECA
If employees believe that they can count on their employers, "that is going to be reciprocated by the employees when things pick up again," Tarki said.
Employees are going to think hard about making a move to a potentially higher-paying job, Tarki said. They'll ask themselves: "Do I really want to leave this company that was there for me?"
Facebook is reportedly planning to give $1,000 to each of its 45,000 employees, according to The Information.
But the leading impact of COVID-19 is unemployment.
As states order the closing of restaurants, theaters, gyms, casinos and set limits on public gatherings, unemployment claims are rising rapidly.
For instance, Pennsylvania reported more than 50,000 unemployment claims on Monday alone. The Colorado Department of Labor "has seen a surge in unemployment claims from 400 on March 7 to more than 6,800 on March 17," the agency reported.
The amount of unemployment financial help varies greatly by state. For instance, Florida provides only 12 weeks of unemployment insurance and caps the benefit at $275 a week, according to U.S. Rep. Frederica Wilson (D-Fla.), who is seeking an increase. In contrast, the maximum weekly benefit in Texas is $465 a week, and in Massachusetts, it is $823 per week.