The economic impact of the COVID-19 pandemic and the disruption resulting from the stay-at-home order has been significant, with 76.1 percent of Michigan business leaders surveyed reporting their six to 12-month business outlook has worsened moderately or significantly.
Slightly more than 20 percent of companies reported that their business outlook has worsened significantly.
Livonia’s ASE, a nonprofit employer association, released the results of a new survey that measured the business impact of the virus on Michigan businesses as well as the steps taken to mitigate the impact. It launched on March 26 and closed on April 2.
“The financial impact of the pandemic will likely be felt for months if not years to come as this pandemic continues to grip our state and our nation,” says Mary E. Corrado, president and CEO of ASE. “Our data suggests that our members have taken many painful steps to weather the short-term economic impact.”
Hiring has been significantly impacted, with four in 10 companies having already implemented a hiring freeze, and another 18 percent considering it at the time of the survey.
An additional 32.7 percent of respondents expect a hiring freeze for all of most of 2020, and nearly a quarter of participants expect a decrease in hiring compared to levels previously projected for 2020.
In addition, 32.7 percent of the companies surveyed report having implemented temporary staff reduction of layoffs, and 23.8 percent were considering it. Temporary staff reductions/layoffs among manufacturing organizations were more significant. Slightly more than 40 percent of participants in that industry have implemented temporary staff reductions/layoffs. Just 6 percent of those surveyed have implemented permanent staff reductions or layoffs.
To a lesser extent, employers have also targeted wages and salaries to control costs. About 10 percent of those surveyed have implemented a wage freeze, and 24 percent were considering one. Wage freezes typically take the form of an elimination of planned salary increases. About 22 percent of those surveyed are considering delaying or reducing the size of planned merit/pay increases. Another 10 percent of those surveyed implemented pay reductions, and 19 percent were considering it.
The majority – 91 percent – of the 147 companies have 500 or fewer employees; 76 percent of those that responded are in metro Detroit.
The full survey is available here.