Hot Topics in Total Rewards

  • 02 Oct 2018 8:39 AM | Bill Brewer (Administrator)

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    The HR tech stack has been consistently evolving for decades. From moving to the cloud, to the rise of mobile and video, to big data, we’ve been following this evolution for quite some time. Successful businesses are constantly optimizing new automated processes to further a world-class talent management strategy. In fact, 65% of employersglobally believe HR tech will free up workers to focus on more knowledge-intensive tasks.

    HR tech has already come so far, so where is it going? Long story short - systems are evolving just like we are. Searchers and job seekers aren’t browsing the way they used to, and it’s time to update not only how we reach out, but how we make ourselves available as well. This means making our processes easier, faster and better than they have ever been before to grab attention, keep that attention and get the talent we want.

    It’s no secret that the market these days is candidate-driven, 86% of recruiters and 62% of employers actually feel this way. Here are some key areas of HR tech that are leading the way to a better, more sophisticated recruitment future.

    Natural Language Process

    Natural Language Processing (NLP) consists of AI technology that many feel may be on the verge of thinking and speaking just like us humans. Before you go all “Terminator,” it’s important to understand how this may help in multiple aspects of HR - not just hiring. NLP technology works to actually speak our language instead of simply translating it through computer code, making it possible to distinguish specific emotions.

    Not sure how you could ever use a system like this? When applied to leadership incentives including employee feedback surveys or even chats, NLP tech can be used to gain a deeper look into what employees think and feel about their workplace. NLP provides an unbiased look at your employees that allows you to take immediate action to help the experience of both them and your candidates.

    This system is best used with:

    • Voice-activated systems
    • Consumer digital assistants
    • Amazon Echos
    • iPhones
    • Google Homes

    Not only is this a great way to ensure that your employees are satisfied, but you can also use this system to ask specific questions about data within the business. NLP may include PTO inquires, payroll information or even budget spending. The possibilities are endless.

    Virtual Reality

    If you’ve followed the latest video games or training seminars, then you know that virtual reality (VR) is taking over. A 2017 study found that only 18% of their respondents displayed no interest in VR. This means 82% are interested and shows just a fraction of the amazing growth this technology is experiencing. Simulations are starting to bud in every corner of the world - HR included.

    This technology makes it easier than ever to put new employees in real world scenarios without the risk of them miscommunicating with a customer, messing up a client order or anything else that could only work to cost a company both time and money. Instead, through the use of VR, they can run through everyday tasks that they will be responsible for in order to get the hang of them before working with the real thing.  


    Chances are you’ve used some form of analytics before, but they have never been more important than they are now. Using the latest in HCM solutions, employers can now dive deep into employee information to better understand important aspects of their employee lifecycle such as turnover statistics and reasons, performance and the overall effectiveness of leadership strategies. This insight may also help you identify underlying issues within the company such as inequality and hiring biases.

    Today, this information is being used to go one step further, not only to identify issues but also to prevent them. Through predictive analytics, companies can better pinpoint talent metrics and risks that may arise based on a new hire, leadership methods and more. According to data from Predictive Solutions, workplace injuries can be predicted with accuracy rates as high as 97%. With the help of AI and machine learning, this technology is going above and beyond in order to help you strategize and improve before the issue is even there.

    HR technology has, and continues to, advanced rapidly over the years. There are a number of systems companies can utilize to better track, influence, attract and analyze both candidates and employees. Need a whole solution that helps you every step of the way through the employee lifecycle? Check out ClearCompany’s Best of Breed Talent Management Solution and see how we can help your team today!

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    Sara Pollock

    As the head of a department in the midst of a sustained period of rapid growth, Sara has spent hundreds of hours interviewing, hiring, onboarding and assessing employees and candidates. She is passionate about sharing the best practices she has learned from both successes and failures in talent acquisition and management.

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    Source: Human Resources Today

  • 27 Sep 2018 9:43 AM | Bill Brewer (Administrator)

    Published: Aug 27, 2018 10:51 a.m. ET

    More employers may move to adopt a student debt repayment benefit as part of their retirement plan

    On Aug. 17, the Internal Revenue Service released a private letter ruling that could make it easier for employers to use their 401(k) plans to assist their employees who are repaying student loan debt.

    Over the last decade, student loan debt has nearly tripled in real terms and, today, Americans hold $1.4 trillion in student debt. Employees are looking for assistance in repaying their student loans, and companies have been searching for ways to tackle the problem.

    The recently issued ruling affirmed that, under certain circumstances, an employer can link the amount of its 401(k) matching contributions for an employee to the amount of student loan repayments made by the employee outside of the plan.

    Participation is voluntary, but a participating employee is eligible to receive nonelective contributions based on his repayments equivalent to what he would have otherwise received if he had made contributions to the plan. If the employee fails to make full use of the employer match based on student loan repayments, the excess match would be applied to any contributions made to the plan. The student loan repayment benefit is subject to nondiscrimination testing, contribution limits, and other requirements for a qualified plan.

    This program should be virtually cost-neutral to the employer in that the employer’s contributions are equal to what they would have been if the employee had contributed directly to the plan. At the same time, it should be valuable to those burdened by student debt who appear to not take full advantage of their 401(k) plan.

    A recent study by the Center for Retirement Research at Boston College found that, while student debt does not discourage 401(k) participation, college graduates with student debt accumulate 50% less retirement wealth in their 401(k) by age 30 than those without. This new option should increase 401(k) balances for this group.

    This is a small positive step toward improving retirement saving. I always worry, however, that without automatic enrollment, too few employees will take advantage of such an option when offered.

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    Source: MarketWatch, Inc.

  • 27 Sep 2018 9:38 AM | Bill Brewer (Administrator)

    Camilo Maldonado


    Personal FinanceI cover the best practices for personal finance and paying down debt.

    Aug 29, 2018, 12:23pm


    A new ruling by the IRS potentially paves the way for workers who make student loan payments to receive matching contributions into their 401K plan.

    Under a new private letter ruling released publicly on August 17, 2018, the Internal Revenue Service signals its willingness to possibly allow companies to make matching contributions to the retirement accounts of employees who do not make 401K contributions, as long as they make qualifying student loan payments.

    Put another way, Millennials who are so burdened by paying off student debt that they’re not voluntarily contributing to their workplace 401K plans, could still receive an employer matching contribution to that retirement plan.

    Now totaling over $1.4 trillion, student loans make up the largest chunk of non-housing consumer debt in the United States. This staggering figure is larger than total auto loans ($1.2 trillion) and total credit card debt ($0.8 trillion). This means that if this ruling were to be expanded and available to all employers, it could have broad effects on the economy and the ability for graduates to be better prepared for retirement.

    Pew found that only 52% of Millennials opt-in to their employer sponsored retirement plans. Some believe that the low participation rates for young people are in part due to being overburdened by high student loan balances and repayment plans. The unprecedented levels of student loans clearly highlights the importance of making and sticking to a monthly budget, but having an additional 401K benefit tied to student loans would be welcomed by debt-burdened professionals.

    The ruling by the IRS makes it clear that their approval of this plan is only applicable to the individual company that applied and ultimately received approval for this plan, but it raises the question of whether it reflects the intention of the government to adjust the law to allow other employers to similarly design their retirement plans to include this student loan benefit.

    In the method approved by the IRS, an employee with student loans would be able to enroll in the plan, make monthly student loan payments, and have their employer make matching contributions into the employees 401K retirement account, up to a certain amount.

    Under the specific plan reviewed by the IRS, the benefit would work as follows. Let’s assume an employee receives compensation of $2,500 during a two-week pay period, or roughly $5,000 per month. As long as the employee makes a monthly student loan payment of at least 2% of their eligible pay or $100 ($5,000 x 2%), the employer would make a matching contribution equal to 5% of the employee’s eligible pay or $250 ($5,000 x 5%) into their 401K retirement plan. To meet the minimum 2% contribution, the employee would still be allowed to make elective contributions to the 401K plan.

    The IRS does mention that:

    The SLR nonelective contribution will not be treated as a matching contribution for purposes of any testing under or requirement of section 401(m). The true-up matching contribution will be included as a matching contribution for purposes of any testing under or requirement of section 401(m).

    Employees without student loans would not be impacted by the ruling, and it would not hurt them since all employees would still be eligible for the same levels of matching contributions.

    It is worth noting that the employer who made this request of the IRS already had a generous plan in place. They match a higher percentage of their employees’ compensation than the employees’ elective contributions. Their employee-friendly stance is further reflected in the fact that they proactively requested this approval from the IRS prior to it being the law, and are at the forefront of this potential legislation. The company’s name was redacted in the official release.

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    Source: Forbes 

  • 26 Sep 2018 9:04 AM | Bill Brewer (Administrator)

    Under a new law, retailers share liability for misclassified truck drivers at California ports


    SEP 25, 2018 | 5:00 AM

    A new California law attempts to resolve a long-running dispute over wages and working conditions for port truck drivers by putting big retailers — who foot the freight bill — on the hook for labor violations by the cargo carriers.

    Senate Bill 1402, which Gov. Jerry Brown signed into law Saturday, is set to take effect in January.

    The labor battle revolves around the 25,000 drayage drivers who transport cargo for short distances along the supply chain that connects the vessels docked at the ports of Los Angeles, Long Beach and Oakland to the nearby rail yards and warehouses. Nearly 90% of drivers are classified by their carriers as independent contractors.

    Unlike employees, independent workers usually have no access to unemployment benefits, disability pay or workers’ compensation. In many cases, trucking companies also pass costs on to drivers, including expenses for fuel, maintenance, repairs, insurance, permits and truck leases. In 2008, the Coalition for Clean and Safe Ports estimated that the average port driver was making $28,000 per year after expenses.

    Domingo Avalos is an example of how the industry has shifted over the years. Avalos, 54, started out driving for Garner Trucking 20 years ago as an employee with benefits. When the recession hit and the work dried up, he sought opportunities with another carrier, and he started moving cargo coming from the ports of Los Angeles and Long Beach as an independent contractor for XPO Logistics’ subsidiary XPO Cartage.

    Avalos didn’t think much of his status until one day in 2014, when one of the containers he was unloading at a rail yard in the City of Industry jolted forward, injuring him. Avalos had to be removed from the yard in an ambulance. The hospital bill amounted to more than $2,000. Avalos alleges that XPO initially refused to cover his medical costs, citing his status as an independent worker. He hired a lawyer, who sent XPO a letter demanding that the carrier cover his bill. Eventually, XPO agreed to pay.

    “The majority of us are from Mexico or Central America,” Avalos said. “We’re not used to having access to workplace protections and many of us don’t speak English well. Companies take advantage of this situation and treat us like second-class workers.”

    XPO did not reply to requests for comment.

    In recent years, a campaign backed by the Teamsters union, called Justice for Port Truck Drivers, has pushed drivers to take action against individual trucking companies, suing them for misclassification and wage theft. According to the California labor commissioner, 987 drivers have filed complaints with the Division of Labor Standards Enforcement since 2011, and they were awarded more than $48 million in unpaid wages and out-of-pocket expenses.

    Trucking companies have criticized the new law, contending it is a backdoor unionization effort and the latest example of California’s tendency to over-regulate the industry.

    “It addresses an issue that has been corrected internally in many cases,” said Weston LaBar, chief executive of the Harbor Trucking Assn., which represents about 100 trucking companies and opposed the bill.

    While the law applies only to port drivers, it comes as workers across many industries — including app-driven gig economy workers — are pushing to renegotiate their status. Ride-hailing companies are reeling after an April ruling by the California Supreme Courtestablished a stricter test to determine whether workers have been misclassified by their employers, making it riskier for Uber, Lyft and other app-based companies to rely on a contractor workforce.

    The port truck drivers have become a symbol of misclassification, and “other workers in contracted jobs will have their eyes on what happens in California,” said Rebecca Smith of the National Employment Law Project. She said the new law is the first of its kind to push the possibility of solving contractor issues far up the supply chain, getting actors with the most negotiating power involved in the process.

    A driver walks past a row of trucks that are preparing to leave their shipping containers at the Port of Los Angeles.

    The law, which started with a bill introduced by Sen. Ricardo Lara (D-Bell Gardens) earlier this year, provides for the creation of a public list of trucking companies that are in violation of labor standards because they have failed to pay wages or reimburse expenses after a final court judgment. If retailers such as Target, Home Depot and Amazon use listed companies for drayage, they will be held jointly liable — alongside the trucking company — for any unpaid wages and expenses awarded to drivers.

    According to Scott Cummings, a law professor at UCLA who has researched labor in the trucking industry, the bill intervenes in a long process where trucking companies — which have little negotiating power along the supply chain — often resist paying court-ordered awards and declare bankruptcy, change names or hide funds in other ways.

    “The bill is smart because it assigns liability to the actors with the most economic power to change the situation,” Cummings said.

    Many of the legal disputes revolve around how much control companies exercise over “independent” drivers. In a complaint filed against XPO with the California labor commissioner in 2016, Avalos testified that he worked on average 11 hours per day, six days a week, and that he was paid at a piece rate per load, independently of how long it would take to deliver the cargo.

    Avalos, who was referred to the Los Angeles Times by the Justice for Port Truck Drivers campaign, alleged the company denied him wages, failed to provide meal and rest breaks and avoided covering out-of-pocket expenses by misclassifying him as an independent contractor.

    Despite being classified as a contractor, Avalos testified that he would receive direct supervision from the dispatchers, who determined his start time and schedule and would call him during the day to ensure deliveries took place in a timely manner. Avalos alleged that he needed the dispatchers’ approval every time he wanted to take time off and was not able to negotiate the price of loads with customers himself. The driver also provided evidence that from 2013 to 2015, when he was leasing his truck directly from XPO, the carrier deducted tens of thousands of dollars from his paycheck for fuel, licenses, insurance and the truck lease.

    In a written objection submitted to the Labor Commissioner, XPO maintained that Avalos was an independent contractor.

    In December 2016, the court concluded that XPO “retained pervasive control over the operation as a whole” and that Avalos was functioning as an employee rather than as a “true independent contractor.” He was awarded in excess of $170,000 in unpaid wages, interest and other expenses. The carrier has appealed the decision in state court.

    The new law is the result of months of negotiations between Lara and various trucking and retail associations. According to an analysis by the Assembly Judiciary Committee, retailers’ concerns were addressed when the bill was amended to include a 90-day grace period from the moment a carrier is included in the list, giving retailers time to get out of existing contracts before joint liability kicks in.

    Jenna Reck, a spokeswoman for Target, confirmed the company participated in a series of “meaningful conversations” over the bill. “We contract all of Target’s transportation services to a number of third-party transportation providers across the country,” Reck said in a statement. “Our contract requires that these transportation providers abide by all applicable laws and regulations.”

    The law creates an exemption from joint liability for retailers that work with trucking companies whose employees are protected by a collective bargaining agreement. Because the vast majority of port drivers are independent contractors — and, under antitrust laws, are not allowed to unionize — the law might incentivize trucking companies to adopt an all-employee model, the companies say, and could potentially strengthen Teamsters’ presence at the ports.

    LaBar at the Harbor Trucking Assn. said he is more concerned that the prospect of additional liability for retailers will accelerate a shift of business from Southern California ports to those on the Gulf and East coasts. About 40% of the country’s container imports and 25% of its total exports flow through the ports of Long Beach and Los Angeles.

    LaBar said some of the association’s larger members have already been asked by retailers to work with them on pricing and logistics planning in other ports, such as Seattle/Tacoma and Houston. However, he couldn’t say which trucking companies and retailers had discussed contingency plans.

    UCLA’s Cummings contends the new law isn’t likely to cause a significant risk of cargo flight from L.A. and Long Beach.

    “It’s the biggest port complex in the U.S.,” he said. “You need trucks. It's a multitrillion-dollar industry. The question is, can we design a system that's fair for everyone, including the people at the bottom?”

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    Source: Los Angeles Times
  • 26 Sep 2018 8:56 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Sept. 26, 2018

    Dive Brief:

    • Most companies will enter open enrollment this fall, and more than three quarters of the 1,000 employees interviewed in a new UnitedHealthcare survey said they're ready for it. According to the 2018 UnitedHealthcare Consumer Sentiment Survey, 82% of full-time workers said they're prepared for the annual benefits shopping season. Only 69% of millennials said they felt prepared.
    • Technology has allowed employees to prepare themselves for open enrollment, the study found. More respondents than ever, 36%, said they had compared healthcare plans by doing research on the internet or on mobile apps. More than half of millennials used these tech tools to shop benefits in the past year. The majority of all comparison shoppers (84%) said the online shopping process was "very helpful" or "somewhat helpful."
    • Eighty percent of respondents cited ancillary benefits, such as dental and vision, as "important." In time spent researching health benefits, the survey found that 42% spent less than one hour, 29% spent from one to three hours and 20% spent more than three hours. More than 65% of insured respondents said they researched health plan networks to see whether their preferred providers are in the plans they want.

    Dive Insight:

    Employers may want to note how this survey highlights technology's positive effect on respondents' ability to shop and wisely choose health benefits. Technology has revolutionized access to healthcare and workers are taking advantage of it. A Paychex study released in June found that 73% of full-time employees want and expect to have 24/7 access to their benefits. The study also found that just more than half of employers can accommodate that desire. Employers who are able to replace or upgrade outmoded systems may want to do so to keep up with employees' expectations, bolster retention and engagement, and compete in the struggle for talent in a tight labor market.

    With open enrollment about to begin, and HR trying to get workers signed up with their benefit selections by the deadline, employers need to know how well employees understand their choices. Many employees don't understand their benefits as well as think. In fact, only 10% of employers in a recent HSA Bank white paper said they believe their workers understand their often-complicated health plans. HR can address the problem during open enrollment and throughout the year by communicating about benefits, updates and new offerings in clear detail, using various personalized methods, including tech platforms, in-person meetings and videoconferencing, to deliver the information to workers.

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    Source: HR Dive
  • 26 Sep 2018 8:54 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Sept. 26, 2018

    Dive Brief:

    • Emotional stability and autonomy may be predictors of whether an employee can thrive in remote-work situations, according to Baylor University researchers. In two studies involving more than 400 adult workers, a research team measured each worker's autonomy (level of independence), strain (defined as fatigue, dissatisfaction and disengagement) and emotional stability. The team concluded that employers should consider workers' well-being in providing remote opportunities.
    • Published in the European Journal of Work and Organizational Psychologyresearchers found: 1) autonomy is necessary to protect remote employees' well-being and help them avoid strain; 2) employees who said they have lots of autonomy and were emotionally stable seemed to thrive the best in remote-work situations; and 3) those who reported having a high level of autonomy, but lower levels of emotional stability, seemed to be more prone to strain.
    • Sara Perry, lead author of the study and assistant professor of management at Baylor University's Hankamer School of Business, said employees with less emotional stability might not want or need autonomy, which could be why they don't handle remote work as well as others. Perry recommended that employers provide these workers with more support and resources in the event that they need to work remotely.

    Dive Insight:

    Studies on the popularity of remote-work options among workers have been somewhat conflicting. According to one 2017 survey, 74% of employees said they would leave their current jobs for others offering remote-work opportunities, while a 2018 Randstad survey showed 62% of the workers preferred to work in-office. But industry trends point to workers wanting more flexibility, and that includes remote-work options. The challenge for employers is deciding how to best support those who decide to take advantage of remote work.

    Due to the nature of remote work, employers may miss signs of strain or even burnout among remote workers, who sometimes put in longer hours than when they worked onsite, struggle with trying to keep personal and work-related duties separate, or feel isolated from co-workers. Gregory BesnerCultureIQ's founder and CEO, previously told HR Dive that employers can help remote workers, including "road warriors" (those who frequently travel), by training managers to look for possible signs of depression​ or burnout, assigning them mentors to whom they can communicate frequently, and engaging them in as many onsite activities as possible.

    As demand for flexibility grows, flexible work schedules could become the default for many positions. HR may want to consider drafting flexible, transparent policies that specify which positions are eligible for such arrangements and which tools remote workers need to be successful.

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    Source: HR Dive
  • 19 Sep 2018 8:39 AM | Bill Brewer (Administrator)


    Valerie Bolden-Barrett


    Sept. 18, 2018

    Dive Brief:

    • The majority of employees and employers in a new Willis Towers Watson (WTW) study said they were satisfied with their benefits experience. WTW measured the responses of 150 employers and about 17,200 workers, and the company found employee satisfaction with benefits rose to 95% in 2018 from 92% in 2016, while employer satisfaction with benefit offerings rose to 99% — a 22% increase from 77% in 2016.
    • A majority (78%) of workers in the study said they would likely remain with their employer because of the benefits it offers, up from 72% in 2016. A whopping 90% of employers said the move to a benefits marketplace helped simplify their benefits administration process. Most employees (97%) preferred choosing their own benefits, rather than have their employer choose for them, and 96% said they were content with the enrollment and shopping experience.
    • "Employer satisfaction is a result of reduced costs, simplified administration and the ability to provide more choice in benefit offerings, while employees like the support to make educated decisions and choose benefits tailored to their unique needs," Alan Silver, senior director of benefits delivery and administration at WTW, said in a statement emailed to HR Dive.

    Dive Insight:

    Benefits satisfaction being at 95% might be especially welcomed by employers on the eve of open enrollment. It's also a good sign given the increased importance that fringe benefits now have in workers' decisions to stay with or leave their employers in a tight labor market.

    But employers are still tasked with determining how to best deliver popular offerings. Cost is the main driver of how employers choose offerings, and few sectors of benefits are driving cost more than healthcare. That may be why employers are increasingly turning to point solutions to help employees move more efficiently through healthcare systems. Such solutions allow employers to administer even personalized benefits cost-effectively to workers, who have expressed demand for self-service accessto benefits data in previous research.

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    Source: HR Dive

  • 04 Sep 2018 7:58 AM | Bill Brewer (Administrator)

    Employees in Line for Pay Raises in 2019

    Low unemployment and a tight job market should drive modest pay hikes for employees next year. As reward and retention efforts continue, top performers can also expect slightly higher discretionary bonuses. Here's some fresh insight from executive recruiter Stacy Pursell of Pursell Group.

    September 4, 2018 – U.S. employers are projecting slightly larger pay raises for employees in 2019 as the unemployment rate has fallen sharply and the job market has tightened, according to a newly released Willis Towers Watson report. The survey also found employers rewarded their top performers with the biggest raises this year and are projecting modestly larger discretionary bonuses next year in their ongoing effort to reward and retain the best performing employees.

    The “2018 General Industry Salary Budget Survey” found U.S. employers expect to give exempt, non-management employees (i.e., professional) average pay increases of 3.1 percent in 2019, compared with three percent this year. Non-exempt hourly employees can also expect larger increases next year — three percent in 2019 versus 2.9 percent this year.

    Employers are planning smaller increases for executives (3.1 percent versus 3.2 percent), while steady increases are planned for management employees (3.1 percent) and non-exempt, salaried employees (three percent). Only three percent of companies plan to freeze salaries next year. Pay raises have hovered around three percent for the past decade. The last year employers provided significantly larger increases was 2008 (3.8 percent).

    The survey also found companies continue to reward their star performers with significantly larger pay raises than average performing employees. Employees receiving the highest possible rating were granted an average increase of 4.6 percent this year, 70 percent higher than the 2.7 percent increase granted to those receiving an average rating.

    Pressure to Boost Salaries

    “After a decade of consistently flat pay raises, we are witnessing a slight uptick as companies are feeling pressure to boost salaries, given the low unemployment rate and the best job market in many years,” said Sandra McLellan, North America rewards business leader at Willis Towers Watson. “While companies have been able to hold the line on raises, the tides are changing.”

    “Many companies are establishing slightly larger salary budgets while at the same time focusing on variable pay such as annual incentives and discretionary bonuses to recognize and reward their best performers,” she said.

    Indeed, the survey found companies are projecting that discretionary bonuses — generally paid for special projects or one-time achievements — will average 5.9 percent of salary for exempt employees, slightly larger than companies budgeted for this year. Slightly larger discretionary bonuses are planned for managers and salaried, non-exempt employees. Annual performance bonuses, which are generally tied to company and employee performance goals, are projected to hold steady or decline slightly in 2019 for most employee groups, the report said.

    “A growing number of companies are coming to grips with the fact that employees are more willing to change companies to advance their careers and to talk openly about their pay,” said Ms. McLellan. “As a result, organizations are facing increased pressure entering next year to devise a focused strategy and plan on how to allocate their precious compensation dollars or risk losing some of their best talent.”

    The Willis Towers Watson Data Services General Industry Salary Budget Survey was conducted between April and July, and includes responses from 814 companies representing a cross section of industries. The survey report provides data on actual salary budget increase percentages for the past and current years, along with projected increases for next year.

    Similar Findings

    Wages for U.S. workers grew three percent over the last year, increasing the average wage level by 80 cents to $27.46 an hour, according to the latest ADP “Workforce Vitality Report.” The report tracks the same set of workers over time, which provides a more insightful picture of wage growth than overall wage growth.

    “We’re seeing interesting shifts in labor-market dynamics this quarter,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “Employment growth for new entrants has dipped to -0.1 percent, while it has increased by 4.5 percent for those who are 55 and older.”

    “In addition, job switchers who are 55 and older are seeing wage growth of 6.3 percent which is 1.5 percent higher than the prime workforce group who are 35-54,” Dr. Yildirmaz said. “This shift suggests employers are searching far and wide for skilled talent and workers who were once sitting on the sidelines have begun to return to the labor market in response.”

    Veteran Recruiter Weighs In

    “The focus for employers in this market is definitely on hiring the best candidates and retaining their best employees,” said Stacy Pursell, CEO of the Pursell Group. “Talent is at a premium right now. Because of that, employers have no choice but to spend more money recruiting top talent in the marketplace and also compensating the star employees they already have. If they don’t do the latter, then there is a very real risk that competing organizations will attempt to hire their best employees away.”

    Related: Increasing Demand for Talent Spurs Steady Wage Growth

    Professionals are more willing to change positions and change employers, especially under current market conditions, Ms. Purcell said. “One reason for this is the arrival of the Millennial generation in the workforce during the past decade,” she said. “Millennials by their very nature crave challenges, and they’re more willing to seek them out. Another reason is the scarcity of talent in the marketplace, which has created more and better opportunities for those professionals who are willing to explore them.”

    CEO Wage Growth

    According to a recent report by Korn Ferry, CEOs at the largest companies in the U.S. last year received the highest compensation increases since the recession. “Even with the anticipation of the CEO pay ratio disclosure mandate, so far we haven’t seen it dampen organizations’ willingness to pay for performance, including strong shareholder value and net income increases,” said the search firm’s 11th annual “CEO Compensation Study.”

    The study, which examined pay for CEOs at the nation’s 300 largest public companies, included those that filed proxy statements between May 1, 2017 and April 30 of this year. Median revenues for the 300 businesses were $18.7 billion.

    Median total direct compensation (TDC) for CEOs increased 8.7 percent to $13.4 million, said Korn Ferry. That is twice as much as last year’s 4.2 percent increase in TDC and the highest percentage increase since 2010, the first year of recovery from the Great Recession. While year-over-year base salaries remained relatively flat, with a 1.5 percent increase to a median of $1.3 million, a large percentage of the TDC increase came from performance-based compensation growth, said the study. Annual bonuses were up 4.1 percent. And LTIs (long-term incentive value) were up 7.4 percent.

    “In years past, we’ve seen LTI increases but not bonus increases,” said Donald Lowman, Korn Ferry executive pay and governance practice leader for North America. “However, this year we are seeing increases in both areas. Even with the anticipation of the CEO pay ratio disclosure mandate, so far we haven’t seen it dampen organizations’ willingness to pay for performance, including strong shareholder value and net income increases.”

    Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media

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    Source: Hunt Scanlon Media

  • 30 Aug 2018 5:39 PM | Bill Brewer (Administrator)

    Dive Brief:

    • For the first time since 2008, the number of private-sector employers across all sizes that offer health benefits has gone up, according to a new report from the Employee Benefit Research Institute (EBRI). The report said that the increase may be credited to "a strengthening economy, lower unemployment rates, and/or relatively low premium increases."
    • The report showed that the percentage of large employers offering health plans increased from 92.5% to 96.3% between 2014 and 2016, and the percentage of small employers, those with fewer than 10 employees, rose from 21.7% to 23.5% between 2016 and 2017. 
    • EBRI said that while the rate at which businesses offered health plans trended down until 2017, more workers have been becoming eligible for health coverage since 2015. As the amount of workers eligible for health coverage in 2017 (76.8%) heavily outweighed the percentage of employers offering coverage, it is reasonable to conclude that workers have been moving to jobs offering health coverage, the report said. 

    Dive Insight:

    A U.S. Bureau of Labor Statistics (BLS) report released in March showed that employer-sponsored health benefits were available to 69% of private-sector employees, and that 89% of state and local government workers have access to health coverage. The percentage of employees eligible for health coverage is the largest for the first time in six years, as reported by The Wall Street Journal. The exact number of employers offering health plans and that of workers who are eligible for coverage might differ from source to source, but a majority of employers offering health coverage is still, as the EBRI stated, good news for workers overall.

    As more employers offer health plans, they will naturally continue to look for ways to control healthcare costs. Some large corporations, like Intel, Cisco Systems, Walmart and Boeing, are taking a bold step by bypassing insurance companies and negotiating prices directly with healthcare providers. Other cost-cutting strategies include offering second-opinion services, focusing on healthcare outcomes and preventive care and finding ways to change the payment and delivery of healthcare services through performance networks​, accountable care organizations (ACOs) and centers of excellence. Generally, employers are getting more directly involved in healthcare management, especially as healthcare benefits remain a key talent attractor. 

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    Source: HR Dive

  • 16 Aug 2018 3:06 PM | Bill Brewer (Administrator)

    Image result for Tight Labor Market Doesn't Move Wage Needle

    Even with low unemployment and this year's tax windfall, employers are planning essentially flat salary increases for 2019, studies show.

    David McCann

    August 16, 2018 | | US

    The labor market is tight. U.S. companies are challenged more than ever to find, win, and retain talent. At the same time, a majority of U.S. companies have extra cash on hand, thanks to the Tax Cuts and Jobs Act.

    Despite all that, companies generally are planning to boost their compensation budgets by only the tiniest of increments in 2019, according to two new reports from major human capital advisory firms.

    Mercer reported that the average budget for merit salary increases for non-union employees, which has grown at a flat 2.8% each year from 2015 through 2018, will tick up to just 2.9% for next year. The data was derived from a survey of 1,526 organizations.

    A similar trend line was documented by Willis Towers Watson, based on a survey of 814 companies. The firm’s numbers show that exempt, non-management (i.e., professional) employees will receive an average pay hike of 3.1% in 2019, compared with 3.0% this year.

    Non-exempt, hourly employees will see pay growth of 3.0%, versus 2.9% in 2018, according to Willis Towers Watson. Raises for management employees and non-exempt salaried employees will stay flat with last year’s 3.1% and 3.0%, respectively. Executives actually will see the rate of increase in their salaries fall, from 3.2% this year to 3.1% in 2019.

    As is usually the case with data, these statistics can be viewed in multiple lights.

    “After a decade of consistently flat pay raises, we are witnessing a slight uptick as companies are feeling pressure to boost salaries, given the low unemployment rate and the best job market in many years,” said Sandra McLellan, North America rewards business leader at Willis Towers Watson. “A growing number of companies are coming to grips with the fact that employees are more willing to change companies to advance their careers.”

    She continued, “While companies have been able to hold the line on raises, the tides are changing. Many companies are establishing slightly larger salary budgets while at the same time focusing on variable pay, such as annual incentives and discretionary bonuses, to recognize and reward their best performers.”

    Mercer, by contrast, criticized companies for their tepid pay hikes.

    “This should be a ‘golden age’ for American workers” because of low unemployment and the concomitant war for talent, according to a blog post by Lauren Mason, principal, workforce rewards, and Mary Ann Sardone, partner and North America workforce rewards practice leader.

    “Talent is critical to business transformation, and how you reward your talent will impact your ability to retain and build the workforce you need to deliver on future business objectives,” they wrote.

    However, they added, “current compensation systems are suffering from 10 years of minimal salary increase budgets that are generally being spread through organizations like peanut butter.”

    Employees understood the tight budgets in a weak economy, but the economy has improved, Mason and Sardone noted. The proportion of employees who consider their pay to be “fair” has declined to 52% from 57% over the last five years, and those who perceive their pay is aligned with their performance have dropped to 47% from 55%, according to Mercer analyses.

    Nonetheless, U.S. salary increase budgets likely will remain relatively flat through 2021, based on current economic projections and 20 years of historical data, according to Mercer.

    Many factors are contributing to the flat trend, the bloggers wrote, but three stand out:

    Cost containment: As companies have placed more focus on maximizing shareholder value, they’ve focused on reducing costs.

    Economic uncertainty: Due to the current political climate, CFOs and other financial leaders continue to be conservative and hold onto cash reserves. Salary increases are not easily reversible, so there’s hesitation to pull the trigger on longer-term fixed costs.

    Globalization of labor forces: Wage stagnation is not just a U.S. issue, but a global one. Employers are increasingly able to tap into a global pipeline for talent, which drives wages toward a global equilibrium over time.

    A mere 4% of Mercer survey respondents said they will be directing savings generated by the Tax Cuts and Jobs Act into their salary increase budgets. Two-thirds (68%) said they won’t be using tax-windfall dollars for that, while 28% said they’re not anticipating any tax savings as a result of tax reform.

    Meanwhile, the discretionary bonuses that McLellan of Willis Towers Watson referred to are generally paid for special projects or one-time achievements, she said.

    Those will average 5.9% of salary for exempt employees in 2019, up slightly from this year, according to the firm’s survey.

    At the same time, annual performance bonuses, which are generally tied to company or employee performance goals, are projected to hold steady or decline slightly in 2019 for most employee groups, Willis Towers Watson said.

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