The blunt trauma sustained by so many parts of the US economy due to the pandemic has hit many employers.

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As a result, one in three companies (35%) now say they have reduced their projections for pay raises next year relative to what they were originally expecting just a few months ago, while half have stuck to their original salary hike targets.

That’s according to a new survey of more than 700 US companies from employment advisory firm Willis Towers Watson.

On average, companies now expect to raise salaries for non-executives by an average of 2.6%, down from the 2.8% they initially projected for all employees. For executives, the estimated hike will be 2.5%.

The main reasons cited for the drop: weaker financial results, cost management and budget cuts.

By comparison, average annual pay raises for all employees have been about 3% since the Great Recession.

The survey also found about 10% of companies are not planning to offer salary increases at all.

“For many companies, reducing salary budgets, and in some cases, suspending pay raises, was the most viable option, as they balance remaining competitive with maintaining financial stability,” said Catherine Hartmann, the North America Rewards practice leader at Willis Towers Watson.

In terms of bonuses, the good news is two-thirds of employers (66%) are still planning to offer them.

But the survey found companies are most likely to pay bonuses to executives and those in management.

Meanwhile, a quarter of companies (26%) say they’re still undecided on whether they’ll be able to pay bonuses at all, and nearly one in 10 companies (8%) say they won’t do so.

Given how many millions of people have been thrown out of work during the pandemic and the risk that even more could lose their jobs if the country cannot get the Covid-19 crisis under control, merely having a job in 2020 and 2021 may seem like a bonus unto itself.

For those still working, given the stresses that the pandemic has created — particularly for working parents of young children — company benefits that increase flexibility and paid time off may well be perceived by employees to be just as valuable as any paycheck hike or bonus during this unprecedented and difficult chapter.

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