Hot Topics in Total Rewards

The Great Resignation may be waning as our survey found nearly half of workers are planning to stay at their companies in the next 12 months, though younger workers may still need to be convinced of the benefits of staying.

Paychex, in partnership with Executive Networks, conducted a 10-minute online survey with 604 full-time and part-time employees who were all living in the U.S., working at small to mid-sized businesses (20-500 employees), and aged between 18-75 years old. The research sample included 65% active workers and 35% sedentary workers. Active workers work on the front line of their business, while sedentary workers work at a desk for a majority of their workday. The survey also segmented by employees who work fully remote (19%), fully on-site (63%), and hybrid (18%).

Overall, job stability and performing meaningful work were cited as the two most important reasons employees continue to stay at their companies.

However, there were variations depending on working arrangements (remote/hybrid/on-site and active/sedentary), industry sector, and generation.

Here were some of the top findings:

• More Baby Boomers (46%) reported that flexibility in work hours or schedule would make them stay long-term at their organization than Gen X (38%), Millennials (31%), and Gen Z (24%).
• Sedentary workers (20%) were more likely to say flexibility in work environment would make them more likely to stay at their company long-term than active workers (11%).
• Active workers (66%) were less likely to feel valued for the work they do than sedentary workers (75%)

Key Findings: What’s Important to Workers and What Makes Them Stay with a Company

#1 Almost half of employees surveyed plan to stay with their current companies

The data could lead us to believe that workers are starting to see the value of staying with their current employer. Most agreed that they currently perform reasonable amounts of work (71%), are provided the tools they need to be successful (71%), and that they feel valued for the work they do (69%). Additionally, 48% of employees said they do not plan to change companies within the next 12 months.

Out of those who reported they would like to change companies in the next 12 months, Millennials (34%) and Gen Z (30%) were significantly more likely to say they would want to switch employers than Baby Boomers (15%) and Gen X (22%) .

Employers may already recognize this, as Gen Z (49%) and Millennials (36%) are more likely to report having a "stay interview" at their company compared to Gen X (21%) and Baby Boomers (12%). For the purposes of this study, a stay interview was defined as when an employer meets with an employee to gather information about what the employee values about their job and to discover what the employee believes can be improved.

When it comes to leaving their current company, those in professional and business services (41%); retail, trade, transportation, and utilities (35%); and construction (36%) were the most likely to say they’re interested in leaving in the next 12 months. Those in education and health services (16%), as well as those in financial services (18%) were the least likely to report wanting to change companies.

#2 Employees value companies that align with their personal interests and values

When asked to consider factors outside of compensation and benefits, the top-ranked reasons employees work at their companies were:

1. Job stability
2. Meaningful work
3. Passion for their field of work or industry
4. A strong support system
5. Company growth
6. Opportunities for one’s personal career growth

The lowest-ranked reasons that employees choose to stay with their company include: company culture and values, company brand and reputation, and company products/services. From this we could infer that employees are making career decisions based on their own goals and values and not those of their employer.

When asked about what perks would make employees more likely to stay long-term with their employer, respondents were most likely to rank flexibility in hours/schedules (35%), opportunities for skills development, career advancement and internal job mobility (15%) as their top picks.

However, there were some key differences when we examined these factors based on generation, industry, and working arrangements.

#3 While Baby Boomers, Gen X, and Millennials value job stability and financial wellness most when it comes to staying with their organizations, Gen Z places value on mental health benefits

Baby Boomers (32%), Gen X (35%), and Millennials (31%) were significantly more likely to say that job stability is the most important reason they work at their company than Gen Z (14%).

When asked to rank benefits (aside from higher pay), more Gen Z (23%) participants cited mental health benefits as the top benefit that would make them stay at a company long-term compared to Millennials (14%), Gen X (5%), and Baby Boomers (3%).

Baby Boomers (14%), Gen X (16%), and Millennials (14%), were also more likely to rank financial wellness benefits as their top reason for staying at a company compared to Gen Z (7%).

When asked to rank perks (aside from higher pay), more Baby Boomers (46%) reported that flexibility in work hours and scheduling would make them more likely to stay long-term at their organization than Gen X (38%), Millennials (31%), and Gen Z (24%).

#4 Failing to Consider Industry Preferences When Evaluating Employee Values May Lead to Poor Retention

Aside from job stability, employees in leisure/hospitality (20%) and education/health services (16%) were most likely to say that passion for their field and industry is the most important reason they work at their company. They were also the two industries most likely to site meaningful work as their number one reason they work at their company (20% and 25% respectively). Manufacturing (6%); retail, trade, transportation, and utilities (5%); and other services (4%) were least likely to rank passion for their field and industry as number one.

Those in financial services (29%) were most likely to cite greater company commitment to work/life balance as their top reason to stay at an organization, followed by flexible work schedules (20%), while more opportunities for skills development, career advancement, and internal job mobility came in last for this group (3%).

And, those who work in leisure/hospitality (27%), construction (24%), and professional/business services (20%) were significantly more likely to cite financial wellness benefits as the top way to encourage them stay at their employer long-term. Those who work in manufacturing (9%); education/health services (6%); and retail, trade, transportation and utilities (13%) were least likely to rank financial wellness benefits at the top.

What Employers Can Do to Retain Employees

1. Look for ways to build flexibility into work schedules. Our research shows workers highly value flexibility in when they work (working hours) rather than just where they work (remote/hybrid/on-site). Employers could start by taking regular polls to uncover employee suggestions for building schedule flexibility into all types of roles, as “flexibility” can mean different things to those in different industries. However, they should first consider what the business can accommodate and tailor the questions to what is feasible before asking an open-ended question in case you do not have the ability to meet most requests. What flexibility looks like for a healthcare worker, for example, may be different from that of an office worker. Employers can also explore a range of technology solutions which allow workers to easily indicate their scheduling preferences, see upcoming shifts and initiate shift swaps (if applicable), or request time off.
2. Survey employees to understand what benefits are of value to various segments of workers. As we saw in our research results, different generations place higher value on different benefits, so employers need to take an employee-centric approach to total rewards and benefits. And, if you have a mix of employees on-site, hybrid, or fully remote, it may be worth segmenting your survey results based on location so that you can offer a benefits package that addresses the needs across your workforce. Fully remote workers, for example, might prefer monthly remote work stipends to help them pay for home internet bills, while fully on-site workers might prefer access to financial wellness classes offered in person at the worksite.
3. Invest in a range of opportunities for skill development and provide greater access to mentoring and coaching opportunities. Workers are looking to their employer for opportunities to broaden their skills and grow their careers. Employers could start by questioning how they are approaching their investment in training and development: what is their total investment in training and development? How are they delivering this to employees? Is it aligned to their current and future strategic business priorities? Is it easily accessible and relevant?
4. Have regular check-ins or stay interviews with employees. Stay interviews are an opportunity to learn how to better engage your employees so they want to stay with your company. Rather than just interviewing employees on their way out in an exit interview, more employers need to have stay conversations with employees to receive their feedback on the workplace and what would motivate them to stay. This is especially important for younger workers who, as our research shows, are more likely than older workers to have had a stay interview, yet still want to switch companies. Employers can build regular check-ins as part of the company culture and train managers to have these on a regular basis with their teams. Stay interviews help employers learn about an employee’s career aspirations, receive feedback on what makes them want to stay with the company, and understand exactly what support and resources they need to succeed in their job.

“The future of work is creating a personalized, human experience at work. Employers should embark on active listening and conduct employee sentiment surveys, so they understand what makes an employee want to stay with their company and what changes they need to implement to increase employee retention.”

-Jeanne Meister, Executive Vice President, Executive Networks

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Source: Paychex, Inc. 

https://www.paychex.com/articles/human-resources/employee-retention-what-makes-employees-stay-leave

Does going on a vacation leave you feeling refreshed and ready to return to work, or does time off make you more likely to quit your job? Does working on vacation really make people want to quit more than those who don’t? We wanted to find out if there was any truth to the rumor that people are more likely to quit their job after vacation. We surveyed 1,000 full-time employees to get the scoop on post-vacation resignations.

How many people quit after coming back from paid time off?

Turns out there’s some truth to the rumor: Yikes. From our survey, 20% of respondents admitted they’d quit after returning from vacation, and nearly half (44%) have thought about it. Some respondents (12%) even used their vacation to look for another job.

While most people (89%) feel refreshed after taking paid time off (PTO), not everyone is ready to get back to work. In fact, 43% of respondents say they dread returning to work after time off. And a few people (11%) said they felt drained after their vacation.

How refreshed do employees feel returning to work after a vacation?

How soon do people quit after vacation?

How did you spend your summer vacation? Going on a trip, visiting friends and family, relaxing at home, or looking for a new job? While a significant number of employees think about quitting while on vacation, the majority don’t start job-seeking activities until after their time off. 

Thoughts of quitting don’t usually prompt impulsive decisions—most employees that do quit after a vacation take as long as three months (62%) to do so. Only 19% of respondents quit within a month of their vacation time. The takeaway is that while people do have time to think on vacation—thoughts which may include quitting—these don’t usually result in immediate action, meaning employers may have a chance to fix the situation before employees walk out the door. 

Most people who quit after vacation will do so within 1-3 months.

Working on vacation makes people more likely to quit

When it comes to retention, PTO policy or duration of time off matters less than whether employees work on vacation. More than half of employees (56%) stayed connected to work while on vacation. This could mean anything from checking the occasional email to joining meetings or working on tasks. 

Younger generations are the least likely to totally disconnect from work, and the most likely to stay very connected to work. And this isn’t because their employer requires them to; they may just feel like they have something to prove as a more junior-level employee. 

Which of the following best describes your relationship with work when you take paid time off?

	I totally disconnect from work — I don’t even think about work at all.	I somewhat disconnect from work — I may check my email once or twice or think about work-related problems, but I don’t take action on any work activities.	I stay somewhat connected to work — I check my email regularly but answer important messages only/limit my work activities.	I stay very connected to work — I work actively while I’m on vacation (e.g., taking meetings, creating deliverables)
Gen Z	33%	33%	22%	11%
Millennials	42%	31%	19%	7%
Gen X	49%	28%	17%	6%
Baby boomers	50%	32%	16%	2%

Working on vacation is more common for younger respondents.

Almost all of these employees (95%) did so by choice, either because they were worried about the catch up work waiting for them when they got back, or for peace of mind so they knew they weren’t missing anything important.

However, not being able to mentally disconnect from work comes at a cost. Employees who work while they’re on vacation experience increased thoughts of quitting and rates of departure than those who totally disconnect. This is especially true of those who were required to work while on PTO. 

Of those who thought about quitting after a vacation, those who stayed very connected to work while on vacation were 36% likely to actually quit, and those required to work while on vacation were 34% likely to quit. A significant portion (72%) of those who were required to work while on PTO thought about quitting while they were on vacation.

	Percentage of all respondents who thought about while quitting on vacation.	Quit rate for respondents who thought about quitting while on vacation.	Quit rate for all respondents.
Totally disconnect from work	43%	37%	26%
Somewhat disconnect from work	43%	44%	19%
Somewhat stay connected to work	45%	51%	23%
Very connected to work	52%	71%	36%

Working on vacation makes people more likely to quit after vacation.

Three demographic differences affecting likeliness to quit after vacation

While the average rate of people quitting after vacation averaged 20%, a few factors made this more or less likely, such as gender. While women and men think about quitting while on vacation at the same rates, men were more likely (+5%) to follow through and women were less likely (-4%) to quit after vacation. This makes sense when combined with the results indicating that men were already more interested in switching positions.

1. Gender

Which of the following best describes you?

	I’m actively looking for a new job.	I’m open to a new job, but not actively looking	I’m not looking to switch
Male	25%	54%	22%
Female	19%	49%	32%

Male respondents were more likely to be looking for a new job than women.

2. Age

Age also played a factor. While millennials and Gen Z were 2-5% more likely to quit after a vacation, Gen X and boomers were 9% less likely to. Older respondents were less likely to quit overall. This could be because boomers are closer to retirement. It could also be that older respondents feel greater stigma against job hopping, or that they’re more likely to be settled into careers they’re happy with rather than younger employees who are still trying to build career capital and experience.

Younger generations were more likely to be looking for or open to new jobs.

3. Caregiving responsibilities

Surprisingly, having dependents made respondents more likely to quit. Those with dependents were more likely to both think about and follow through with quitting. This may indicate that reasons for quitting have more to do with flexibility or compensation than personal reasons, such as conflicts at work.

How caregiving responsibilities affect the likelihood of quitting.

Caregivers are more likely to follow through on plans of quitting.

How employers can support employees at risk of quitting post-vacation

Employers trying to limit the likelihood of a post-vacation quit should pay close attention to demographics more at risk, such as millennials and those with dependents. Tactics such as stay interviews or even just having managers check in after a return from vacation could limit the likelihood of these groups leaving their jobs in the following months. 

Since working while on vacation seems to be a critical factor in quit rates, those who want to support boosting retention may want to create policies that prevent employees from working while on vacation.

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Source: Visier

https://www.visier.com/blog/quit-after-vacation/

By Ryan Golden

Dive Brief:

• The share of out-of-pocket healthcare costs paid by employees within employer-sponsored health plans increased from 17.4% in 2013 to 19% in 2019, and the rise of high-deductible health plans appears to be driving the trend, researchers at the Employee Benefits Research Institute said in a statement Monday.
• Researchers found that plan design played a role in whether costs increased. Those in non-high-deductible plans, such as preferred provider organizations and health maintenance organizations, saw decreased or stable costs during the same time frame. While most enrollees did not see out-of-pocket spending rise significantly, those who were high users of care and those with certain medical conditions did, EBRI said.
• Out-of-pocket spending for outpatient services grew faster than for inpatient services, while expenditures for prescription drugs declined. EBRI utilized data from the IBM Marketscan Commercial Claims and Encounters Database, encompassing more than 45 million patients.

Dive Insight:

As with many goods and services, healthcare has not been immune to inflationary pressures. U.S. health systems faced a combination of rising supply and labor expenses in recent months, according to Healthcare Dive, even as patient volumes have increased. As a result, providers are likely to pass on increased costs to commercial insurers during upcoming contract negotiations, Fierce Healthcare reported last week.

But from the employer perspective, employee benefits programs — including health benefits — remain a key component of talent management in a difficult hiring market, according to a McKinsey & Co. report from May. The consultancy also found that many employers have turned to HDHPs, among other strategies, as a way to address rising costs.

Yet increasing employee deductibles creates a “fundamental tension” between employers’ dual goals of securing workers’ well-being and controlling costs, according to EBRI.

“On the one hand, employers are more frequently implementing financial wellness programs as a means to improve their employees’ financial wellbeing,” Jake Spiegel, research associate at EBRI, said in the statement. “On the other hand, in an effort to wrangle health care cost increases, employers often turn to raising their health plan’s deductible, potentially offsetting the positive impact of any financial wellness initiatives.”

In their report, EBRI’s researchers also noted the role that health savings accounts, which may be offered in conjunction with a HDHP, may play in balancing increased out-of-pocket costs. Those enrolled in an HSA-eligible HDHP may be able to cover those costs using HSA contributions made by themselves and their employers. A previous EBRI report highlighted the role that pre-deductible coverage of chronic condition medications may play in HSA-eligible plans.

Aside from increasing patient deductibles, there are a variety of other cost-saving healthcare measures employers may seek. An executive for insurer NFP previously told HR Dive that these options can include care navigation services, virtual care options and value-based care arrangements, among others.

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Source: HR Dive

https://www.hrdive.com/news/high-deductible-plans-drive-increased-employee-out-of-pocket-spend-ebri-study/628935/

WTW survey reveals fewer employers expect broad attraction and retention challenges next year; will continue to focus on pay and employee experience

July 14, 2022

ARLINGTON, Va., July 14, 2022 (GLOBE NEWSWIRE) -- Salary budgets for U.S. employees are projected to increase in 2023, mainly influenced by a labor market with more open jobs than people to fill them. Leading global advisory, broking and solutions company WTW’s (NASDAQ: WTW) Salary Budget Planning Report found that companies are budgeting an overall average increase of 4.1% for 2023, compared with the average actual 4.0% increase in 2022. These are the largest increases since 2008.

According to the report, nearly two in three (64%) U.S. employers have budgeted for higher employee pay raises than last year, while two-fifths (41%) have increased their budgets since original projections were made earlier this year. Less than half of companies (45%) are sticking with the pay budgets they set at the start of the year. Some companies are also making more frequent salary increase adjustments. More than one-third (36%) have already increased or plan to increase how often they raise salaries. Among those respondents, the vast majority (92%) have or will adjust salaries twice per year.

Concerns over a tighter labor market seem to be the main driver for the higher budgets, with nearly three in four respondents (73%) citing this as their top factor. Additionally, 46% of respondents cited employee expectations for higher increases that are driven by inflation, and 28% adjusted their budgets in anticipation of stronger financial results.

“Compounding economic conditions and new ways of working are leading organizations to continually reassess their salary budgets to remain competitive,” said Hatti Johansson, research director, Rewards Data Intelligence, WTW. “With such a dynamic environment, it’s imperative for organizations not only to have a clear compensation strategy but also a keen understanding and appreciation of the factors that influence compensation growth. And, if an organization is planning to increase budgets, it’s best to be prepared as to how to award and communicate pay changes as quickly and effectively as possible.”

According to the survey, attraction and retention challenges continue to plague organizations, although fewer respondents expect those difficulties to be at the same level next year. Over nine in 10 respondents (94%) are experiencing difficulties attracting talent this year, but only 40% expect difficulty in 2023. Similarly, 89% of companies reported difficulty retaining workers this year, but that number is expected to drop to just under 60% next year.

In fact, many companies have taken or plan to take non-monetary actions to attract talent. For example, 69% of respondents have increased workplace flexibility, and 19% are planning or considering doing so in the next couple of years. Six in 10 respondents (59%) have placed a broader emphasis on diversity, equity and inclusion (DEI), and 24% are planning or considering doing so in the next few years. Additionally, 49% of companies continue to enhance recruitment offers with sign-on bonuses and equity/long-term incentive awards, while over 21% are planning or considering doing so in the next few years.

Efforts to retain talent are also under way. Almost three-fifths (58%) of companies have broadened their emphasis on DEI to retain more talent, and over 26% are planning or considering doing so. In addition, half (50%) have increased the flexibility for remote work, and 25% are planning or considering doing so in the future. Almost 40% have changed their compensation programs (e.g., base salary and short- and long-term incentive plans), and another 35% are planning or considering. Over 36% have made changes to improve their employees’ experience, and 45% are planning or considering doing so.

“With a possible recession looming, continued high inflation and employers grappling with talent supply challenges, organizations need to get more creative to address attraction and retention challenges,” said Catherine Hartmann, global practice leader, Work, Rewards & Careers, WTW. “The workforce is composed of a diverse employee population, each with their own unique dynamics. Employers are challenged to meet their preferences and needs while delivering on a superior employee experience for all.”

About the survey

The Salary Budget Planning Report is compiled by WTW’s Reward Data Intelligence practice. The survey was conducted in April and May 2022. Approximately 22,570 sets of responses were received from companies across 168 countries worldwide. In the U.S., 1,430 organizations responded.

About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

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Source: Willis Towers Watson Public Limited Company (WTW)

https://www.globenewswire.com/news-release/2022/07/14/2479938/0/en/Tight-labor-market-drives-U-S-employers-to-boost-2023-pay-raises.html

July 1, 2022 by Debby Routt, Forbes Councils Member, Forbes Human Resources Council

Since the pandemic started, HR professionals have had to juggle retaining their current employees while also attracting new talent. Employees have more options than ever when it comes to job choice. They’ve come to expect benefits like comprehensive healthcare plans, creative time off options and development opportunities that include job shadowing. But, while important, benefits are just one of many reasons a candidate chooses you over another company or why an employee stays at your company.

Now is the time for HR leaders to get creative and look for areas where they can make adjustments to their employee benefits. Here are some ways to help you stand out.

Behavioral health services have taken center stage recently as more employers are offering counseling as part of their employee assistance programs (EAPs). HR professionals need to start looking at the quality of these services at a much deeper level. Historically, EAPs provided high-level counseling with a predetermined number of visits per year and were bundled together with other benefits like short-term disability for a reduced price. But now, more EAPs are providing comprehensive mental health services for employees.

The adage “you get what you pay for” is true when it comes to EAPs. Organizations must ask the right questions when evaluating a potential partner. For example, ask how many certified specialists they employ and if they have a waitlist. Ask about the average wait time to get an appointment with a counselor since some counselors have long waitlists due to high demand. Check to see if they have specialists who are certified to work with your employees’ children as the pandemic has impacted our younger populations in profound ways. HR leaders should also talk with other companies that use the EAP services they are evaluating or ask for references.

It's also crucial to take the time to find a partner that really understands your organization and your employee population, instead of taking a cookie-cutter approach. You should choose an EAP that can provide you with reporting to identify the challenges your employee population is currently facing. If you have several employees who are reaching out for help with anxiety, childcare needs or financial hardships, use the data as you evaluate benefit plans to make more informed decisions about what to offer.

An EAP isn’t valuable if your employees don’t take advantage of it. All too often, HR leaders get an EAP and have extremely low utilization rates. Your EAP shouldn't be a “get it and forget it” benefit. You must put a plan in place to promote the offerings throughout the year. Find ways to make the services more attractive to your employees. If it’s not front and center, you’re wasting money.

Flexibility Is A Must For Work-Life Balance

Letting employees have time off has always been important to prevent burnout, but it's even more so now since they are juggling the challenges brought on by the pandemic. Even with increased flexibility provided by remote and hybrid work schedules, employees are finding it difficult to step away from their work even when they have days off.

Traditional PTO plans may no longer be the answer. When making changes to PTO benefits, employers need to consider their employees’ needs to help them disconnect. Sometimes it might be stepping away for a few hours to attend a PTA meeting or to attend a wellness class. Many employees have come to expect the ability to move away from the standard 9-to-5 work schedule and are wanting more flexible hours.

Work-life balance is crucial right now. If an employee doesn’t have any meetings scheduled in the afternoon and wants to join their kids on the playground for recess, they should feel empowered to do so if their job allows them to. This will help balance the times when they need to put in additional hours during evenings or weekends.

For employees to feel comfortable taking time out for themselves or their families when needed, organizations need to make sure they’re creating a culture that supports this type of flexibility. They should also try to honor their employees' PTO by minimizing incidents when they need to contact them during vacation time.

Professional Development Should Be A Two-Way Conversation

Investing in your employees has always been incredibly important to ensure they have a robust career development plan. But the Great Resignation has caused more employees to start looking for professional development opportunities as they are able to compete in more job markets due to the flexibility of remote work. If employers don't provide these opportunities, expect employees to find a company that will.

It's important that managers have a conversation with their employees to help them identify beneficial development opportunities and how they will help to support them in their career paths. Goal setting is an effective way to kick off this conversation by identifying how an employee wants to grow in their career. Managers can provide guidance on options such as on-the-job training, classes, webinars, podcasts, job shadowing and books that could be beneficial. If they know they will need to complete their professional development outside of work hours, they should have clear expectations so they can plan for the additional time commitment.

Finally, organizations should invest in good management training. Employees historically don't leave companies, but instead, leave bad managers. Now is one of the most important times to make sure that managers are really in sync with their employees so they’re able to effectively lead and manage their team. Leading in a hybrid work environment is much different than anything many managers have faced before. Make sure you are working with your leaders on how to manage in a hybrid environment. While some employees are natural people leaders, others need guidance so they can effectively deal with things like personnel issues, development plans and difficult conversations.

As employee priorities continue to shift, it's vital that companies keep pace and rethink their benefits.

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Source: Forbes

https://www.forbes.com/sites/forbeshumanresourcescouncil/2022/07/01/shifting-priorities-rethinking-employee-benefits/?sh=bb85380222ab

• Firm quantifies the "Great Resignation" and the challenges employers face attracting and retaining top talent
• Average budgeted employee salary increases reach 5.2 percent, up from 4.5 percent last year

CHICAGO, June 2, 2022 /PRNewswire  Opens in a new tab/ -- Aon plc  Opens in a new tab (NYSE: AON) reported a 41 percent spike in voluntary employee departures last year amid the "Great Resignation" in the United States, according to data from the firm's Salary Increase and Turnover Study. Aon, a leading global professional services firm, reported 21.8 percent of U.S. employees left their jobs in 2021, of which 17.2 percent departed voluntarily. In 2020, 19.7 percent left employers, of which 11.9 percent departed voluntarily.  

"The spike we've seen in voluntary departures quantifies the challenges employers face during this period we call the 'Great Resignation,'" said Michael Burke, CEO for Human Capital Solutions at Aon. "Employers must look to the underlying root cause and not merely treat the symptoms. They will need to review total rewards strategies and look at resilience, agility, wellbeing and purpose in order to retain and attract top talent in their respective industries. A tight labor market will continue to challenge employers in the near term."

Figures come from Aon's Human Capital Solutions bi-annual Salary Increase and Turnover Study, which is a global survey of nearly 2,000 employers. The report provides insights on salary increases and employee retention powered by industry-leading data and analytics that reflects how broader economic circumstances impact the talent landscape.

The study also shows:

• Average budgeted salary increases in 2022 reached 5.2 percent, up from 4.5 percent last year in the U.S. This includes merit raises and promotions.
• Forty percent of U.S. employers say they will hire aggressively in 2022, while 46 percent plan to hire at a normal pace, 13 percent will be very selective and 1 percent will freeze hiring.
• Energy (10.6 percent), construction (15 percent) and financial services (15.6 percent) had the lowest voluntary departure rates among industries measured.

The report includes measurable data samples from 10 industries, which include business consulting, construction/real estate, energy, entertainment, financial services, life sciences, manufacturing, retail/hospitality, technology and transportation.

"We use these data insights to provide advice and solutions that give employers from an array of industries the clarity and confidence needed to make better decisions to protect and grow their business," said Michael Deeks, global head of the data business for Human Capital Solutions at Aon.  "It's a hot job market out there and as a result, we are seeing turnover grow and many companies allocate more money in their salary budgets."

To learn more about the report, click here  Opens in a new tab.

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Source: Aon

https://aon.mediaroom.com/2022-06-02-Voluntary-Employee-Departures-Spike-41-Percent-Among-U-S-Businesses,-Aon-Reports

Employers can reduce compliance risk by conducting annual audits and giving employees time to file certifications, WorkForce Software’s Paul Kramer said.

Published July 5, 2022 by Ryan Golden

Employers likely need few reminders about the importance of Family and Medical Leave Act compliance, though that has not stopped federal regulators from telegraphing their enforcement plans in recent months.

As with other areas of compliance, employers continue to face litigation around the FMLA, often incurring costly settlements and associated legal fees.

Last week, a live web Q&A session presented by the Disability Management Employer Coalition covered areas including FMLA audits, concurrent leaves and delayed worker certifications. Paul Kramer, head of compliance at vendor WorkForce Software, walked employers through a set of considerations for FMLA compliance.

#1: Be proactive about DOL audits — and do your own

FMLA audits can translate into a lengthy process, but things tend to move quickly once the U.S. Department of Labor notifies an employer that an audit will take place, Kramer said. Among other items, the agency may seek to examine company and employee records; interview management and employees; and conduct on-site visits and inspections.

Attorneys who previously spoke to HR Dive said employers should prepare by gathering necessary materials, composing a position statement and designating a point of contact for the audit. Kramer similarly advised employers to:

• Review their FMLA correspondence and policies.
• Ensure leaves have been properly tracked and calculated.
• Analyze their FMLA certifications and practices for fairness and consistency.
• Review any steps taken to curb leave abuse.
• Ensure employees have been given proper notice of their leave rights.
• Check that company records are complete and accurate.

Kramer also recommended that employers perform their own audits annually. He noted that FMLA records must be maintained for at least three years.

#2: Be aware of when leaves may run concurrently

Employers may have situations in which FMLA leave runs concurrently with other leave. Kramer said determining whether an employee qualifies for different leave can be a key challenge.

“I think a big problem with leaves that run concurrently is that you have to make sure the employee actually qualifies for each concurrently run leave,” Kramer said. “Different leave laws have different qualification requirements employees must meet to be eligible for the leave and you must make sure the employee meets them before approving the leave.”

Asked by an audience member who worked for a public-sector organization about tracking family and medical leave that may interact with workers’ compensation cases, Kramer said that an employee’s workers’ compensation absence due to an on-the-job injury also may qualify as a serious health condition for FMLA purposes. “If it does, the workers’ compensation absence and FMLA leave may run concurrently,” he added.

#3: Be careful when denying leave over delayed certifications

Under certain circumstances, the FMLA permits employers to require that eligible employees submit a certification from a healthcare provider to support the employee’s need for FMLA leave.

Generally, an employee must provide the certification within 15 calendar days of the employer’s request, but Kramer said he would advise employers to grant “a little extra time” to employees if needed. By doing so, the employer may be able to use the granting of extra time as evidence that it did not retaliate against the employee in the event the employer is sued.

“You have to be cautious about denying FMLA leave because a certification is a little late,” Kramer said. “When an employee makes diligent good faith efforts to provide the certification timely but is unable to meet the 15-day calendar deadline, the employee is entitled to additional time to return the requested certification. Do you want to risk the DOL or a court concluding that the employee made diligent good faith efforts to provide the certification timely and that you wrongly denied the leave?”

Kramer also said employers may want to require employees to put leave requests in writing; “There is evidence to suggest that when you require leave requests in writing it reduces dishonest behavior. Think about it. If someone asks you to put something in writing, aren’t you always more careful to be accurate?”

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Source: HR Dive

https://www.hrdive.com/news/you-have-to-be-cautious-3-fast-fmla-compliance-tips/626564/

By Leah Shepherd, June 15, 2022

A proposed bill in California would make pay more transparent. Under the bill, employers with 15 or more employees would have to include pay range in all of their job postings and publicly report how much certain groups of employees are paid.

"I give the bill a moderate chance of passing," said Anthony Zaller, an attorney with Zaller Law Group, based in El Segundo, Calif. "If passed, it would be one of the strongest pay transparency laws in the country. Not only does the bill require employers to report wages for employees across race, gender and position in the company, it also proposes to publish each employer's information on the Internet."

"It seems to be moving through the Senate quite quickly, but it does have quite far to go before the governor signs it," said Laura Reathaford, an attorney with the law firm Lathrop GPM, based in Los Angeles.

If it passes, HR professionals would need to implement a consistent protocol to ensure that job ads reflect accurate pay scales. "It will be important for HR professionals to have a compliance system in place to review and approve all job ads to ensure they are legally compliant," Zaller said. "It will also be important to have records of the ads placed and retain these records for the time period required by the bill."

That means HR professionals should document pay history for each employee for the duration of their employment plus three years after the employment ends.

This effort toward pay transparency is meant to help employers to detect and avoid discriminatory pay patterns.

It's still unclear whether the proposed law in California would impact salary negotiations with job applicants.

"While it sets a range for the negotiations and gives employees an idea of what the position pays, the ranges could be large, and many employers are currently posting wage expectations to attract qualified employees," Zaller said. "Moreover, California law already prohibits employers from asking employees about prior salary history."

"Job applicants do not apply for jobs simply because the salary range has been disclosed. They apply for jobs where the salary and wages are competitive," Reathaford said. "Therefore, I think one effect this law will have is that employers may be pressured to offer higher wages because the salaries and wages of their competitors will be more robust and accessible."

Similar Bill in New York

The New York State Legislature recently passed a similar bill that would require employers with four or more employees to include salary ranges in their job ads. Gov. Kathleen Hochul has not signed it yet.

New York City has a similar pay transparency law that will take effect on Nov. 1. The New York City Commission on Human Rights recently released guidance to clarify that the law applies to both internal and external job postings. Bonuses, stock, benefits, overtime pay and commissions are not included as salary.

Although employers in New York City won't be fined if they correct a first violation within 30 days, they may have to pay civil penalties of up to $250,000 for any subsequent violations.

Pay Data Reporting

California's proposed bill would require private employers with 100 or more workers to submit a pay data report to the state's Department of Fair Employment and Housing. The report must include the number of employees by race, ethnicity and sex in these job categories:

• Executive- or senior-level officials and managers.
• First- or mid-level officials and managers.
• Professionals.
• Technicians.
• Sales workers.
• Administrative support workers.
• Craft workers.
• Operatives.
• Laborers and helpers.
• Service workers.

The pay data report also must include the number of employees by race, ethnicity and sex whose annual earnings fall within each of the pay bands used by the U.S. Bureau of Labor Statistics in the Occupational Employment Statistics survey.

Employers with multiple establishments would have to submit a report for each establishment. Failure to provide a report each year could result in a fine of $100 per employee.

The state will publish these annual pay reports on a website that the general public can view.

Ultimately, preventing discrimination is the purpose of this record-keeping.

"The underlying goal is to have employers evaluate any pay disparities within their organization, specifically along racial or gender lines. The law is meant to encourage compliance with equal pay and anti-discrimination laws. If companies and HR professionals keep this goal in mind, the reporting obligation should be less of a concern," Reathaford said.

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Source: Society for Human Resource Management (SHRM) 

https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/california-pay-transparency.aspx

HR Dive spoke with Salary.com’s David Turetsky, who encouraged employers to speak openly with workers amid economic frustrations.

Published June 14, 2022 by Katie Clarey

The pandemic may have spurred last year’s record-high quit rates, but job seekers weren’t necessarily all motivated by health and safety concerns. Many left because of low pay.

A Pew Research Center study released in March found that 63% of those who left a job said low pay numbered among the reasons why they quit, alongside a lack of advancement opportunities (63%) and feeling disrespected at work (57%). Thirty-seven percent of respondents said low pay was a major reason why they left their jobs.

David Turetsky, VP of consulting at Salary.com, saw Pew’s findings play out in real time. “We came out of a pandemic where everyone was worried for their health. That’s part of why the Great Resignation happened,” he said. “Workers decided ‘I’m not getting paid enough to kill myself at work.’”

It appears many workers received the compensation boost they wanted by switching jobs. According to Pew, more than half of those who switched jobs said they earned more money in their new gig. A February Conference Board survey produced similar findings, revealing that a third of employees who made pandemic-era job switches made over 30% more in their new positions. A fifth landed increases of 10% to 20%. 

Workers who jumped ship weren’t the only ones to benefit from a teeming job market. At the beginning of the year, ADP Research Institute analyzed the wages of 18 million workers during the last three months of 2021. It found wage growth among existing job holders hit 5.9% in December from a year earlier — the biggest increase the firm had seen since 2014, it said. Wage gains for existing employees averaged 5.7% in the last quarter of 2021, representing an all-time high for that timeframe.

Salary.com captured organizations’ preparations for the widespread uptick in pay in a fall 2021 poll. The research revealed 52% of organizations planned to boost funding for merit increases, a large jump from the 19% of respondents that reported such plans in 2020. Organizations also communicated plans for increased bonus spending.

Meanwhile, 40% of respondents said they were incorporating premiums into base salaries, and 33% said they were providing hiring bonuses. Nearly two-thirds of those polled said they were using referral bonuses and hiring bonuses, up 24% since 2020.

Since employers reported their plans for higher salaries and alluring bonuses, however, the broader economic situation has tightened, with inflation soaring, expenses rising and preparations beginning for a potential recession. A more recent Salary.com survey revealed 98% of employers are somewhat or very concerned that rising inflation rates will erode employee compensation.

Stormy economic conditions led Turetsky back to the lesson he believes employers should learn from the latter half of 2021 and its high quit rates: “Compensation should not be the reason why people leave,” he said. The Great Resignation motivated companies to review their pay practices and policies and ensure they’re competitive and transparent.

He referenced the recent headlines heralding Microsoft’s decision to nearly double its budget for employee salary increases in an effort to retain staff. “That’s Microsoft. They can do that,” Turetsky said. “There are a lot of other organizations that can’t. They’d love to, but they can’t.” Instead, smaller organizations have to make hard decisions about how to dispense the funding they have to help employees deal with the economic conditions at hand.

Many companies are turning to compensation tools that don’t compound, Turetsky said. Instead of heightening base salary, organizations use tools like stay bonuses and lump-sum payments.

Employers need to think beyond more granular pay tactics to quell quit rates during hard economic times, especially when pay may be affected, Turetsky said. ”I’m always on the side of being more open. The more you try and hold back from employees, the more they don’t understand when you make strange policy decisions. You have to tell people why you’re doing the things you do so it makes sense to them, so they believe in your mission and so they’ll stay.”

When companies don’t communicate openly with employees, they send the message that workers aren’t mature enough to be in the know on business decisions. Turetsky noted that this frustration fuels labor organization — an effort that’s fundamentally rooted in taking power from opaque management.

“It all comes back down to how you treat employees,” Turetsky said. “And it starts from the hire: how you hire them, how you pay them, paying them fairly.”

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Source: HR Dive 

https://www.hrdive.com/news/consultant-says-shifting-market-is-pushing-pay-cultural-transparency/625395/

Published June 22, 2022 By Laurel Kalser

Dive Brief:

• Mental health coverage and telemedicine or telehealth services are among the most important benefits employers feel they can offer employees in 2022, according to the Society for Human Resource Management’s annual benefits survey released June 12. The survey was conducted in January and February and sent to U.S.-based SHRM members representing a variety of industries and sectors that range in size from two to more than 25,000 employees.
• Of the survey’s 3,129 responses, 93% said they offered telemedicine or telehealth, a 20% jump from 2019, when the category was last recorded. Similarly, respondents offering mental health coverage hit a new high of 91%, up from prior to the pandemic. “The strong prevalence of these benefits, even after businesses have returned to more normal conditions following the COVID-19 vaccine rollout,” indicates they’re likely to become “permanent fixtures,” the executive summary noted.
• Retirement savings and planning benefits were next, with 82% of employers saying they were important to offer, up from 55% in 2020/21. Most employers offered some type of retirement plan; 94% offered a traditional 401(k), 68% offered a Roth 401(k). Many employers also provided some type of employer match. Just over half (51%) said they automatically enroll new or existing employees in their company’s retirement plan, a figure that’s held steady since the pandemic’s onset.

Dive Insight:

As reflected in the survey, employer priorities continue to adapt to evolving post-pandemic needs. For example, while nearly all of employers currently offer paid vacation (99%) or sick (96%) leave, the prevalence of leave for new parents, beyond what’s required by law, returned to pre-pandemic levels. In particular, the number of organizations offering paid maternity leave dropped to 35% in 2022, down from 53% in 2020; paid paternity leave dropped to 27% in 2022, down from 44% in 2020.

The decline could be attributed to direct parental leave needs early in the pandemic, the executive summary explained. “Now that many businesses have returned to a more typical way of operating, employers seem to be dialing back on expanded parental leave opportunities,” the summary said.

Consistent with the priorities employers now place on mental health coverage, the survey revealed emerging support for mental health leave: 1 in 5 employers said they offered paid mental health days separate from regular sick leave. That’s in line with what one employment law attorney urged HR professionals June 13 at SHRM’s annual conference. 

With the stresses brought on by the pandemic, an employer should ensure that employees know it appreciates what’s going on in the world and supports their mental health, the attorney said. Employers can show support by training managers on how to respond to leave requests as well as emphasizing the importance of using inclusive language.

The survey also reflects the pandemic-triggered shifting between in-person and remote work. Hybrid work opportunities continue to be well-represented among benefit offerings, the survey found. About 2/3 of employments (63%) said they offer most of their workers the opportunity to adopt some combination of remote and in-person work. Across all organizations, 62% said they reimburse or offer a subsidy to employees for at-home office work or equipment. On average, thees employers provided about $891 to employees to cover the costs of working at home.

In developing a hybrid work model, employers need to be intentional and build trust, a global diversity, equity and inclusion strategist said during her June 13 presentation at SHRM’s annual conference. While company leaders look for models to adopt, they should keep in mind that no one size fits all, the strategist said. She outlined five questions employers should ask to structure their model, including who gets to choose in-person versus remote work and when, and how and for whom they will use management tactics like surveillance.

The possibility of remote work gives organizations access to wider talent pools, the survey’s executive summary noted. Because workers also have more options for where and when they will work, employers face a challenging talent landscape. But benefits can be instrumental in how this plays out, the summary concluded.

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Source: HR Dive

https://www.hrdive.com/news/shrm-mental-health-telehealth-benefits-are-post-pandemic-priorities/625754/