Winona-based Fastenal Co. announced April 28 that it was suspending its performance-based bonus programs for a large number of employees and senior leaders.
Now, as Fastenal made cost-control measures and markets have changed again, it is bringing back the programs for the second quarter. The first-quarter cut was out of caution and the uncertainty around COVID-19.
The company in March also announced some enhanced employee benefits related to the COVID-19 crisis for employees who needed to work on site and to improve the company’s ability to retain and recruit workers.
The company made a number of other COVID-19 responses to keep employees and customers safe but also to ensure it could deliver critical supplies to its customers including food manufacturers, hospitals and basic goods companies.
The company also focused on other ways to safely deliver products. One effort was an increased use of Fastenal’s automated lockers for customer pickup. Chief Executive Dan Florness pledged to add thousands of more lockers through its network to meet demand for that contactless delivery service.
The efforts of Fastenal’s “Blue Team” have paid off. The company announced its May sales results on June 4. Sales for May were $493 million, up 4.4% from May of 2019 with two fewer selling days in the month — aided by a big spike of safety supplies.
Chief Financial Officer Holden Lewis said the level of uncertainty about Fastenal’s business is very different from two and half months ago and allowed the company to roll back the decision. “When the anxiety went away then the right thing to do was reset the pay plans to pay people what they earned during the period. It’s really gratifying to come back and do that.”
Many other companies also expanded benefits due to COVID-19 in part to help employees who might face extended time off due to being ill from the virus and as an incentive to keep symptomatic employees at home to prevent further spread of the virus in their workplaces.
Companies such as Target and Walmart offered hazard-pay increases to their essential front-line workers who couldn’t work remotely and were needed to keep their stores open and their customers served.
But mostly it has been grim news for employees. Over the last three months more than 44 million Americans have filed for unemployment insurance and many other employees were forced to take furloughs, reduce hours, or accept delayed merit pay increases.