Marcia Hultman

Cabinet Secretary

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South Dakota e-Labor Bulletin

March 2022

business people with COVID-19 imageSouth Dakota Business Response to the Pandemic

Results of a recent survey by the U.S. Bureau of Labor Statistics (BLS) provide some insights about South Dakota business responses to the COVID-19 pandemic. The U.S. Business Response to the Coronavirus Pandemic survey was conducted by BLS from late July through the end of September 2021.

South Dakota Highlights

  • One out of five South Dakota private sector establishments reported having made at least one type of change in employee pay as result of the pandemic.
  • Almost a quarter of South Dakota private industry employees work for an establishment which reported base pay increases because of the pandemic. (See “Pay Increases” below for more information.)
  • Nearly a quarter of South Dakota establishments reported having begun offering some type of employee flexibility in work schedules or leave allowances since the start of the pandemic. (See “Employee Flexibility” below for more information.)

It is important to note only private establishments were surveyed; government-operated agencies and schools at the federal, state and local level were not included.

Pay Increases

In South Dakota, 20.8% of establishments reported having made at least one type of change in employee pay as result of the pandemic. Nationally, 24.2% of establishments reported making some type of pay change. Just over 12% of South Dakota private sector establishments reported they had increased base wages because of the coronavirus pandemic. Those 3,814 establishments employ more than 84,000 employees. In other words, more than 24% of South Dakota private industry employees work for establishments reporting they increased their base pay because of the pandemic.

Other survey items regarding changes in pay directly related to the pandemic delved into temporary wage premiums for working during the pandemic (such as hazard pay, hero pay or an hourly bonus). Just 4.8% of South Dakota private establishments reported such pay increases. This was just slightly slower than nationally, where 5.5% said they had paid such premiums.
The table below shows the percentage of establishments having made various types of pay changes because of the pandemic. South Dakota data and national data are included for comparison.

Businesses Which Made Changes in Pay Because of the Pandemic
  Percent of SD Establishments Offering Percent of National Establishments Offering
Increased base wages or salaries 12.2% 14.5%
Temporarily paid a wage preimium or hazard pay 4.8% 5.5%
Paid one-time special monetary awards for working during pandemic 9.3% 9.4%
Paid one-time signing bonuses for new employees 1.5% 2.4%
Paid recruitment bonuses to current employees 3.8% 4.5%
Made at least one of the above changes in pay 20.8% 24.2%
Source: 2021 Business Response Survey to the Coronavirus Pandemic, U.S. Bureau of Labor Statistics.

Although state detail by industry and employer size class is not available for comparison, on the national front, the Accommodation and Food Services industry supersector had the largest percentage (45.8%) of establishments indicating they had made changes in pay because of the pandemic. In second place was the Health Care and Social Assistance supersector, with 34.8% of establishments having made changes in pay. Not surprisingly, the nation’s largest employers (those with 1,000 or more workers each) was the employer size group with the highest percentage (57.5%) indicating they’d made some changes in pay because of the pandemic.

Telework Increases

As a result of the pandemic, 21.9% of South Dakota establishments increased telework for some or all of their employees. That is lower than nationwide, where 34.5% indicated they increased telework. From a number of employee perspective, about 38% of South Dakotans work in establishments which increased telework as a result of the pandemic. This compares to 50.8% nationwide.

When asked if they expect increases in telework for some or all employees to continue after the pandemic, more than half (56.2%) of South Dakota establishments said yes. Nationally, 60.2% of establishments expect telework to continue.

The survey also asked employers about the percentage of time employees were currently teleworking. During a typical week, 7.6% of South Dakota establishments indicated their employees were teleworking all of the time. Nationwide, 10.3% of establishments said their employees were teleworking all the time. Meanwhile, 20.7% of South Dakota establishments indicated their employees are teleworking some of the time, but not all of the time. Comparatively, 29.8% of establishments nationwide said employees are teleworking part of the time. The majority of South Dakota establishments (72.2%) reported employees rarely or never telework, compared to 60.1% nationally.

Looking at detail available by industry (available at the national level only), the Educational Services industry sector reported the highest percentage (62.7%) of establishments increasing telework for some or all employees. This is not surprising, given the prevalence of distance learning practices implemented across the country in for students ranging from pre-kindergarten through postsecondary. Having nearly as of high of percentage (60.9%) was the Information sector. It stands to reason the industry which revolves around distributing information and processing data electronically would utilize its own technology to keep employees working, remotely, while maintaining social distancing during the pandemic. Also not surprisingly on the other end of the spectrum, the nation’s Accommodation and Food Services industry supersector reported the lowest percentage (3.6%) of establishments which increased telework for employees.

Employee Flexibility

The survey also included several questions about having offering various types of employee flexibilities during the pandemic, such as flexible or staggered work hours, compressed or alternative work schedules and job sharing. About a quarter of South Dakota establishments (24.6%) reported having begun offering such flexibility since the start of the pandemic, compared to slightly over a third (34.5%) of establishments nationwide. Although comparable state-specific data is not available, not surprisingly, national results of the survey show for the most part, the larger establishments are, the more likely they were to have started offering flexible or staggered work hours to employees.

The table below shows the percentage of South Dakota establishments which began offering each type of employee flexibility as a result of the pandemic, along with national data for comparison.

Businesses Using Different Types of Labor During the Pandemic
  Percent of SD Establishments Offering Percent of National Establishments Offering
Independent contractors, freelancers or consultants 7.2% 12.2%
Temporary help agency workers 7.2% 11.0%
Job-sharing (two employees split hours/tasks of a full-time job) 1.4% 2.3%
Paid leave for dependent care (additional paid leave of any kind for employees with dependent care responsibilities due to the coronavirus pandemic) 7.7% 6.5%
At least one of the employee flexibilities specified above 24.6% 34.5%
Source: 2021 Business Response Survey to the Coronavirus Pandemic, U.S. Bureau of Labor Statistics.

Use of Space

A portion of the Business Response to the Coronavirus Pandemic survey questions were devoted to the pandemic’s impact on physical space used for work. One question asked if the business had decreased its square footage of space because of the pandemic. Just 3.1% of the state’s establishments indicated they had reduced their footprint, compared to 5.5% nationally.
Next, employers were asked if they expect their business will change its square footage within the next year. Just over 2% of South Dakota establishments said they think they will change their square footage, compared to 4.0% nationally.

Businesses were also asked if they had relocated during the pandemic. Response options were designed to shed additional light on where relocation took place:

  • Yes, moved within the same city or county
  • Yes, moved to a different city or county, but within the same state
  • Yes, moved to a different state
  • No, did not move since the start of the pandemic.

Across the nation, 3.9% of establishments chose the first option, indicating they had moved within the same city or county. Just a slightly smaller portion (3.4%) of South Dakota establishments used this response.

Nationally, 1.3% of establishments used the second response option, indicating they moved to a different city or county but remained in their own state. The South Dakota percentage was even lower, less than 1%.

On a national level, a very small portion 0.6% of establishments reported having moved to a different state as a result of the pandemic. It was even smaller in South Dakota. Keep in mind, this was still more than 52,000 businesses across the nation relocating to a different state during the pandemic. Although data is not available on which states businesses relocated to, this may be a positive indicator for South Dakota, given our positive business climate. The states with the largest percentages of establishments relocating to other states were the District of Columbia, Idaho and New Mexico.

Businesses were also asked about future plans to relocate. Just 2.4% of South Dakota establishments indicated they have plans to locate within the same city or county, compared to 2.7% nationally. Again, a different response option specified a move to another state was planned. While less than one percent of South Dakota establishments indicated such plans, nationally, nearly 48,000 establishments (0.6%) indicate they plan to move to a different state. Those states with the largest percentage of establishments indicating plans to relocate to another state within the next 12 months were the District of Columbia, New York, Nevada, California, Illinois, Oregon and Rhode Island.

Changes in Staffing/Business Practices

Businesses surveyed were also asked about use of different types of labor (independent contractors, temporary help agencies, etc.) during the pandemic. As shown in the table below, a very small percent of establishments nationally reported using such facets of labor supply, and an even smaller percentage did in South Dakota.

Businesses Using Different Types of Labor During the Pandemic
  Percent of SD Establishments Offering Percent of National Establishments Offering
Independent contractors, freelancers or consultants 3.4% 5.9%
Temporary help agency workers 1.6% 3.0%
Companies that provide contractors or subcontractors 1.0% 1.4%
Online platform companies that arrange assignments for workers through an app and collect a commission from your establishment for each task/job workers do <1.0% 0.8%
Did not start or increase use of any of these 95.1% 91.0%
Source: 2021 Business Response Survey to the Coronavirus Pandemic, U.S. Bureau of Labor Statistics.

About one in 10 (9.8%) South Dakota establishments indicated they expect to begin using any of these alternatives for labor supply once the pandemic is over. This was slightly lower than the 14.8% of establishments nationally which indicated they plan to use these alternatives.

Automation

Survey respondents were asked to indicate if they use any of various types of automation, from self-service kiosks (including those to order and pay for food) and voice-recognition-based customer service/automated online chats with customers to industrial robots or management systems for packaging goods for shipment. Only 2.8% of South Dakota establishments reported using such automation, compared to 4.2% nationally. If you are interested in detailed results of this related survey questions regarding automation plans, please contact us.

COVID Prevention Practices

A survey designed to gather data about employer responses to the COVID-19 pandemic would have been remiss without including questions about the disease itself. The first directly related survey question asked if the business currently required some or all employees to routinely wear a face covering or any protective gear while they are on-site.

Nationally, a majority of establishments (58.3%) responded positively, indicating they required employees to wear protective gear of some type. In South Dakota, 27.2% indicate they had this requirement. South Dakota ranked lowest of all states in this percentage, behind neighboring North Dakota where 28.8% of establishments reported requiring face coverings or some type of protective equipment.

Another survey item asked about required temperature screenings before employees could enter the workplace. Again, South Dakota had one of the lowest percentages, with 9.5% of establishments requiring temperature screenings. Only Montana had a lower percentage (8.7%) of establishments with this requirement. The national average of establishments requiring temperature screenings was 24.1%.

Survey participants were also asked if they required some or all employees to get a COVID-19 vaccination before reporting to the work-site. Again, South Dakota ranked low with a percentage of 4.4%. Only North Dakota ranked lower, with 4.3% of establishments indicating they required vaccination. Nationally, the rate was 17.5%. Puerto Rico had the highest percentage of establishments which required employees to receive COVID-19 vaccination, at 65.8%. California was next in the rank, but at about half that percentage, 32.3%.

When asked about offering employees a financial incentive, paid time off or allowing staff to remain on the clock to get a COVID-19 vaccination, 28.0% of establishments nationally said yes, they had. South Dakota again ranked low, with just 18.1% of establishments reporting they had offered employees an incentive of some kind to get the vaccination. Only our neighbor to the north, North Dakota, had a lower percentage, at 16.0% of establishments.

Employer Loans and Grants

A little more than a third (35.8%) of the nation’s establishments reported they had received a federal or state government coronavirus-related loan or grant tied to re-hiring or maintaining employees on the payroll after January 1, 2021. A little less than a third (30.8%) of South Dakota establishments indicated they had received such a loan or grant.

With the final item, the survey posted the question, “If this business location received any type of coronavirus-related loan since the onset of the pandemic, has the loan been converted to a grant?” This is one of the few places where South Dakota outpaced the nation, with 62.3% of establishments reported having received loans that have been converted to a grant. The national rate was 54.0%. South Dakota ranked fourth in its conversion of such loans to a grant, behind North Dakota (66.0%), Puerto Rico (64.7%) and Vermont (62.8%).

For more information (including national results by industry supersector and size class) gathered through the Business Response Survey, please contact us or visit the BLS website.