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Business Responses to the COVID-19 Pandemic

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March 2023
Business Responses to the COVID-19 Pandemic

Kelly Quinn, Faith Ulrich, and Anthony Colavito

The COVID-19 pandemic disrupted businesses across the United States. Some businesses adjusted to the pandemic by increasing telework, adding workplace flexibilities, or changing pay. A business's response to the pandemic often depended on a particular firm’s policies, which were often extended to some or all employees in the firm regardless of individual establishment size. Resources may differ among larger and smaller firms. This Spotlight on Statistics examines differences in private industry businesses' responses to COVID-19 across firm sizes. Data were collected from July to September 2021.

Business establishments that increased telework during the COVID-19 pandemic

A firm is a legal business and may consist of one or several establishments. Establishments are economic units that produce goods or services, usually at a single physical location, and engage in one or mainly one economic activity. Establishments in larger firms increased telework at higher rates than establishments in smaller firms during the COVID-19 pandemic. Approximately 46 percent of establishments in firms with more than 5,000 employees increased telework for some or all employees, compared with 27 percent of establishments in firms with fewer than 4 employees. Establishments in firms with 101 to 500 employees showed the largest increase in telework, with over half of these businesses increasing telework since the start of the pandemic. Nationally, 35 percent of establishments, representing slightly under half of all employment, increased telework during the pandemic.

Business establishments that offered employees new workplace flexibilities during the pandemic

During the pandemic, some businesses began offering additional workplace flexibilities, including flexible or staggered work hours, alternative work schedules, voluntary reductions in hours worked, job-sharing, and paid leave. Establishments in larger firms offered employees additional flexibilities at higher rates relative to smaller firms. Fifty-one percent of establishments in firms with more than 5,000 employees began offering at least one workplace flexibility during the pandemic, compared with 28 percent of establishments in firms with fewer than 4 employees. Overall, 35 percent of establishments began offering at least one additional workplace flexibility during the pandemic.

Types of workplace flexibilities offered by business establishments

The most commonly offered workplace flexibility was flexible or staggered work hours. Forty percent of establishments in firms with more than 5,000 employees offered this flexibility, compared with 20 percent of establishments in the smallest firms. The least commonly offered flexibility was job sharing—the splitting of hours or tasks of a full-time job between two or more employees. Two percent of all establishments offered employees the option to job share.

Business establishments that made pay changes during the pandemic

Some establishments increased pay or offered one-time bonuses during the pandemic. Pay changes came in the form of increases in base wages; temporary wage premiums; and appreciation, signing, or recruitment bonuses. Compared with all other establishments, establishments in firms with more than 5,000 employees made more changes to their pay practices during the pandemic. Forty-five percent of these establishments in firms with more than 5,000 employees offered at least one pay change. Nationally, 24 percent of private-sector establishments made at least one of the pay changes.

Types of pay changes offered by business establishments

Increasing base wages was the most common pay change overall and for establishments in smaller firms with 100 employees or less. The most common pay change for establishments in larger firms with more than 100 employees was paying one-time appreciation bonuses to workers already employed at those establishments. Twenty-six percent of establishments in the largest firms offered one-time appreciation bonuses. Four percent of establishments in the smallest firms paid one-time appreciation bonuses. Overall, 9 percent of establishments offered these one-time appreciation bonuses, and 24 percent of all workers were employed in these establishments.

Business establishments that instituted COVID-19 workplace requirements

Across all firm sizes, more establishments required their employees to wear face coverings than take temperature screenings when at work onsite. Establishments in larger firms required their employees to observe these requirements at higher rates than establishments in smaller firms. The percent of establishments that required face coverings was 22 percentage points higher for establishments in firms with more than 5,000 employees than for establishments in firms with fewer than 4 employees. For temperature screenings, the overall rate was lower, and the difference was 15 percentage points higher for establishments in firms with more than 5,000 employees than for establishments in firms with fewer than 4 employees.

Business establishments that required vaccination

Nationally, 18 percent of private-sector establishments required some or all of their employees to receive a COVID-19 vaccination to work onsite. However, establishments in smaller firms required their employees to receive a vaccination at higher rates than establishments in larger firms. Twenty-five percent of establishments in firms with fewer than 4 employees required vaccination compared to 17 percent of establishments in firms with more than 5,000 employees.

Business establishments that incentivized vaccination

Twenty-eight percent of all establishments, representing 45 percent of all employment, incentivized vaccination for COVID-19 by providing a financial incentive, offering paid time off, or permitting employees to remain on the clock to get a COVID-19 vaccination. However, establishments in larger firms incentivized vaccination at higher rates than establishments in smaller firms. Forty-eight percent of establishments in firms with 501 to 5,000 employees incentivized vaccination, the highest percent across all firm sizes. The rate at which establishments in firms with fewer than 4 employees incentivized vaccinations was 28 percentage points lower at 20 percent.

Business establishments using supplemental workforce

During the pandemic, some businesses started supplementing their workforce with workers not on the payroll. The types of supplemental workers used included: independent contractors, freelancers, or consultants; temporary help agency workers; contract company workers; or online platform company workers. Establishments in the largest firms started or increased their use of at least one type of supplemental worker at a higher rate than establishments in smaller firms. Seventeen percent of establishments in firms with more than 5,000 employees started or increased their use of at least one type of supplemental worker, compared with 7 percent of establishments in firms with fewer than 4 employees.

Drug and alcohol testing at business establishments

Establishments in larger firms conducted drug or alcohol testing for new applicants or current employees at higher rates than smaller firms. Establishments in firms with 501 to 5,000 employees conducted drug or alcohol testing at the highest rate (45 percent), followed closely by establishments in firms with 101 to 500 employees (44 percent) and more than 5,000 employees (35 percent). Four percent of establishments within the smallest firm size (fewer than 4 employees) conducted drug or alcohol testing.

Coronavirus-related loans and grants for business establishments

Nationwide, 36 percent of establishments received a federal or state government coronavirus-related loan or grant after January 1, 2021, that was tied to rehiring or maintaining employees on the payroll. Forty-four percent of establishments in firms with 4 to 10 employees and 11 to 100 employees received a coronavirus-related loan or grant tied to rehiring or maintaining employees. Thirty-five percent of establishments in firms with more than 5,000 employees and 31 percent of firms with fewer than 4 employees received a loan or grant. Establishments in firms with 501 to 5,000 employees received a loan or grant at the lowest rate, 12 percent of establishments.

Coronavirus-related loans converted to grants for business establishments

For businesses that received any type of coronavirus-related loan since the onset of the pandemic, 54 percent nationwide had their loan(s) converted to a grant. Establishments in firms with 4 to 10 employees and 11 to 100 employees had their loans converted to grants at the highest rates, 64 percent and 63 percent, respectively. Forty-eight percent of establishments in firms with fewer than 4 employees, and 47 percent of establishments in firms with more than 5,000 employees had their loan(s) converted to a grant. Twenty-one percent of establishments in firms with 501 to 5,000 employees had their loan(s) converted to a grant.

More information

Kelly Quinn is a supervisory economist, Faith Ulrich is an economist, and Anthony Colavito is a former economist in the Office of Employment and Unemployment Statistics, U.S. Bureau of Labor Statistics. For questions about this Spotlight on Statistics, please email Quinn.Kelly@bls.gov.

In summer 2021, the Bureau of Labor Statistics (BLS) collected information on how businesses were responding to the COVID-19 pandemic through the 2021 Business Response to the COVID-19 Pandemic Survey (BRS). The survey asked a series of questions about changes businesses have made during the coronavirus pandemic, along with questions about expectations for the future of the business. The new data provide additional insights about what employers experienced as a result of the pandemic, how they responded, and their expectations for the future of their business. This Spotlight builds on previous articles examining private industry business responses to the COVID-19 pandemic. Firms are defined as either a single establishment or a set of establishments that share a unique Employer Identification Number (EIN) issued by the Internal Revenue Service. The firm size data used in this Spotlight are experimental. There are a variety of ways to produce firm size estimates; in this Spotlight, the EIN is used to identify firms. More information on the Business Response Survey can be found on the BRS Overview page.

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