The data highlights a disconnect between the importance employers say they place on advancing these strategies, and how much progress has been made,” Mercer’s global rewards solution leader said.

Published Jan. 14, 2025 / Ginger Christ

Dive Brief:

• Only 19% of U.S. companies have a pay transparency strategy in place, according to the results of Mercer’s 2024 Global Pay Transparency Survey Report, which were released Jan. 10. 
• Despite that, 63% of U.S. organizations said they planned to share pay information internally and externally in a standardized way, and 56% said employees should have the same access to compensation data, regardless of where they work in the world, Mercer found. 
• Of the more than 1,000 companies surveyed, over 300 of which are in the U.S., 77% identified compliance as a key driver for their strategy, and more than 50% cited improving employee satisfaction and aligning with company values as drivers of their policy.

Dive Insight:

Pay transparency is becoming increasingly important in the U.S., as more states, including New York, California and Colorado, pass legislation requiring employers to disclose pay or pay ranges. 

Beyond that, 75% of U.S. employers said they think candidates expect pay transparency, and 54% believe current employees expect it, Mercer found. 

“The data highlights a disconnect between the importance employers say they place on advancing these strategies, and how much progress has been made,” Gordon Frost, Mercer’s global rewards solution leader, said in a news release. “With fair pay the second-most important reason employees choose to stay with an organization, don’t wait to prioritize these efforts — because there is still a lot of work to be done.”

To address this, 65% of U.S. organizations plan to conduct pay equity studies, and 59% are adjusting their employee compensation models to align with external market rates, the report found. 

But organizations also reported that the biggest hurdle for them is manager inability to explain compensation programs to workers; 37% of U.S. companies identified this as their biggest challenge, Mercer said. 

“With manager enablement one of the biggest challenges our clients face in 2025, these employees will be critical to your pay transparency strategy’s success. Ensuring managers are equipped to deliver these messages to your workforce should be a key component of that rollout,” Tauseef Rahman, a partner in Mercer’s career practice, said in a statement. 

Three in 4 companies said they aren’t ready for pay transparency laws, according to the results of a survey by Aon plc, a global professional services firm, released in December. 

While the incoming Trump administration will likely try to weaken government agencies promoting pro-worker initiatives like pay transparency, state efforts will still have movement, Lulu Seikaly, senior employment counsel for Payscale, said regarding 2025 compensation trends.

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Source: HR Dive 

https://www.hrdive.com/news/1-in-5-us-companies-have-a-pay-transparency-strategy/737114/

Higher contribution limits to 401(k) and IRA accounts, plus other twists are ahead for savers and retirees.

Kerry Hannon · Senior Columnist

Updated Sat, January 4, 2025 at 5:08 AM PST 7 min read

Saving for retirement will get a modest boost in 2025 thanks to higher contribution limits and the phase-in of provisions stemming from the Secure 2.0 Act, which became law at the end of 2023.

For retirees, there are also changes for Social Security and Medicare worth noting.

Here’s a roundup of some of the key retirement-related changes to watch for in the new year.

Higher saver contribution limits

Employer-sponsored retirement plans come with sizable contribution limits — not that everyone can spare to set aside that much — and they’re increasing slightly. For 2025, you’ll be able to increase your annual contribution to your 401(k), 403(b), governmental 457 plans, and the federal government's Thrift Savings Plan to $23,500, up from $23,000.

The catch-up contribution limit, for those 50 or older, is holding steady at $7,500. There’s an extra layer of icing for workers aged 60 to 63, thanks to the Secure 2.0 law — a higher catch-up contribution limit of $11,250.

“People at this life stage often have college funding in the rearview mirror, so if they're in the position to turbocharge their retirement plan contributions in advance of retirement, they should take advantage of it,” Christine Benz, director of personal finance and retirement planning for Morningstar, told Yahoo Finance.

The contribution limit on individual retirement accounts (IRAs) will stick at $7,000, and the catch‑up contribution limit for individuals 50 and over stays at $1,000 for 2025.

IRA deductions for singles covered by a retirement plan at work phases out for modified adjusted gross income (MAGI) between $79,000 and $89,000, up from $77,000 to $87,000. The deduction gradually disappears for married couples filing jointly between $126,000 and $146,000, up from $123,000 to $143,000.

Some good news for Roth IRA fans: The income limit range for contributing will increase to between $150,000 and $165,000 for singles and heads of household, up from $146,000 to $161,000. For married couples filing jointly, the range increases to between $236,000 and $246,000, up from $230,000 to $240,000.

Finally, the income limit for the Saver’s Credit, a nonrefundable tax credit worth up to $1,000 ($2,000 if married filing jointly) for taxpayers who contribute to a retirement account is $79,000 for married couples, up from $76,500; $59,250 for heads of household, up from $57,375; and $39,500 for singles and married individuals filing separately, up from $38,250.

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Source: Yahoo Finance

https://finance.yahoo.com/news/what-do-people-regret-the-most-when-they-retire-143035482.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAAAsT9E0zmDdAYJ7_Hfs_RCv9bLsFTXJEfcrowXg3ZR--HuJzyLmqXFQfKY5NJRl57vFzYixNpPmoDZw9o4sw9jGpIrkceCEkwsFmnfaDdA3IR_7TP0faU9d2aBpE3lmfmdqGwSHnszcK3PqVqScYa2LPyYGWheuIuoLmI1OmxV9h

Employers also plan to promote 9.3% of employees in 2025, up from 8% in 2024

December 10, 2024

Today, Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in helping clients realize their investment objectives, shape the future of work and enhance health and retirement outcomes for their people, released the results of the November 2024 Mercer QuickPulseTM US Compensation Planning Survey.  

According to the survey of more than 850 US organizations, employers are planning to raise their compensation budgets by 3.3% for merit increases and 3.7% for total salary increases for non-unionized employees in 2025. Sixty-nine percent of surveyed employers expressed confidence in their compensation budget projections. These figures remain consistent with the actual merit and total salary increases delivered in 2024, which were 3.3% and 3.6%1, respectively.

While these planned increases are similar to last year, they remain above historical trends, confirming that employers are prioritizing talent investment even in the face of economic uncertainty.

“Amid a persistently tight labor market and low unemployment, employers are recognizing the need to invest in their workforce to drive retention,” said Lauren Mason, Mercer’s US Workforce Solutions Leader. “To remain competitive in this environment, employers will need to look beyond compensation and transform work itself to improve the employee experience and unlock greater productivity.”

The majority of employers (80%) indicated that they have not finalized their compensation budgets. Among those with approved compensation budgets (20%), their 2025 budget projections were consistent with the projections made in August for all surveyed employers, which were 3.3% for merit increases and 3.6% for total salary increases.

The survey also revealed industry variations. The technology sector reported above-average compensation budgets, with increases of 3.5% for merit and 3.8% for total compensation, while the healthcare services industry reported below-average increases for merit and total compensation of 3.0% and 3.5%, respectively.

Employers are planning to promote 9.3% of employees in 2025, up from 8% in 2024. Many employers reported a flexible approach to promotions, conducting them as needed or via two or more cycles per year. This emphasis on career and compensation progression demonstrates a commitment to retaining essential talent and skills while fostering employee engagement and loyalty.

Reflecting the move towards greater pay transparency, 18% of companies said they are sharing pay ranges with all employees and candidates, while another 27% are considering this action. The August 2024 Compensation Planning Survey revealed that 52% of employers plan to conduct pay equity studies to meet rising transparency demands, underscoring a strong focus on fair pay practices.

“When employers aren’t clear about pay, employees create their own narratives—and those stories can be more negative than the reality,” said Ms. Mason. “Despite significant investment in pay in recent years, employee satisfaction with fair pay is still on the decline.”

“Companies should continue to redesign and communicate how pay decisions are made, ensuring every dollar invested closes critical gaps and contributes to a more transparent, fair and rewarding experience,” Ms. Mason added.

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Source: Mercer

https://www.mercer.com/en-us/about/newsroom/us-employers-maintain-elevated-compensation-budgets-for-2025/

By the end of 2026, at least 14 U.S. states, four Canadian provinces and all European Union countries will have pay transparency laws in place.

Published Dec. 17, 2024 by Ginger Christ 

Dive Brief:

• Seventy-five percent of companies aren’t ready for pay transparency laws, according to the results of a survey by Aon plc, a global professional services firm, released Dec. 5. Yet, 14 U.S. states and four Canadian provinces will have laws in place by the end of 2025 and all European Union countries will by the end of 2026. 
• Of the 626 global U.S. employers surveyed, those in retail and e-commerce (33%), financial institutions (21%), manufacturing (20%) and professional and business services (20%) reported feeling the most prepared. 
• While 81% of employers surveyed said they include salary ranges on job listings, 63% said they don’t share salary ranges with current employees. Of the 37% who do share salary ranges with existing workers, 61% said they only disclose that information where they are required to do so by law.

Dive Insight:

In addition to states, some U.S. cities have passed their own laws requiring employers to disclose pay or salary ranges, including New York City and Cincinnati.

“The rise of pay transparency and pay equity initiatives reflects a broader cultural shift, particularly among younger employees,” Brooke Green, head of talent solutions for North America at Aon, said in a statement. While it was once considered “impolite to publish salary information,” Green said, not doing so may reinforce and exacerbate pay gaps.

Green said companies that comply with new regulations “sooner rather than later” will be better able to tackle pay disparities, encourage fairness and help workers make informed career choices. 

Forty-seven percent of companies with significant operations in Europe said they were concerned about the upcoming EU Pay Transparency Directive, according to an October report by software company Syndio. And one expert said the directive will “upend” how companies manage and explain pay. 

The laws are effective in making companies share pay information, according to an October story from Indeed’s Hiring Lab. The three states and localities that showed the largest growth in salary transparency over the past year — Hawaii, Washington, D.C., and New York — had pay transparency laws that went into effect around the last year.

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Source: HR Dive

https://www.hrdive.com/news/employers-arent-prepared-for-pay-transparency-laws/735789/ 

The program, created in SECURE 2.0, addresses student loans, which are considered a significant impediment to retirement savings.

Reported by Amy Resnick

The Internal Revenue Service published guidance Monday to assist plan sponsors providing or planning to provide matching contributions based on employees’ qualified student loan payments.

The IRS published Notice 2024-63, which uses a question and answer format, to illustrate the rules for employers with 401(k), 403(b) and governmental 457(b) plans to provide matching contributions based on qualified student loan payments, abbreviated as QSLP, rather than based only on elective contributions to retirement plans. Student loan defined contribution plan matching was permitted under the SECURE 2.0 Act of 2022.

Student loan repayment is frequently identified as one of the largest causes of financial stress and impediments to retirement savings among U.S. workers.

The notice also separately outlines QSLP rules for SIMPLE IRA plans.

The IRS is taking public comments on the notice, which applies to plan years beginning after Dec. 31, 2024. The comment period runs for 60 days after the notice is published in the Federal Register.

The ERISA Industry Committee, representing large employers in their capacity as benefit plan sponsors, supported the IRS’ action.

“ERIC’s member companies are committed to the financial wellbeing of their employees, including those with outstanding student loans,” said Andy Banducci, ERIC’s senior vice president for retirement and compensation policy, in a statement. “That is why we lobbied Congress to enact a tax law change allowing employers to make retirement plan matching contributions on account of workers’ qualified student loan payments. We applaud the IRS for issuing interim guidance implementing this change and look forward to providing technical comments to IRS in the coming weeks.”

The regulator also announced plans to issue proposed regulations providing further guidance on the QSLP benefit, stating that plan sponsors may rely on the notice until the proposed regulations are issued.

The guidance makes clear that plans cannot include provisions limiting QSLP matching to certain qualified education loans and that “all employees … eligible to receive matching contributions on account of elective deferrals must be eligible to receive matching contributions on account of ‘qualified student loan payments.’”

It also states that plans have to offer uniform treatment of elective deferral matches and QSLP matches.

“A plan with a QSLP match feature may not include provisions that exclude employees from receiving QSLP matches if those employees are eligible to receive elective deferral matches, and a plan with a QSLP match feature may not include provisions that exclude employees from receiving elective deferral matches if those employees are eligible to receive QSLP matches,”  the IRS wrote.

Overall, the notice addresses plan administration issues raised by Section 110 of SECURE 2.0, including:

• Only an employee’s qualified education loan payments that were made during a plan year are eligible to be counted for purposes of the employee’s QSLP match for that plan year;
• A qualified education loan payment is a QSLP only if the certification requirement is satisfied with respect to that payment. A plan may require a separate certification for each qualified education loan payment intended to qualify as a QSLP or permit an annual certification that applies for all qualified education loan payments intended to qualify as QSLPs for a year; and
• To certify a QSLP, the plan or its third-party service provider much receive the amount of the loan payment made, the date of the loan payment, that the payment was made by the employee, that the loan being repaid is a qualified education loan and was used to pay for qualified higher education expenses of the employee, the employee’s spouse or the employee’s dependent, and that the employee incurred the loan.

The notice also offers examples of administrative procedures and optional Actual Deferral Percentage testing.

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Source: PLANADVISER

https://www.planadviser.com/interim-irs-guidance-published-student-loan-matching-payments/

15th August 2024 

Payscale Inc., a leading provider of compensation data, software, and services, has released the results of its ninth annual Salary Budget Survey, a key resource for HR and compensation professionals determining pay increase strategies for the upcoming year. The survey results reveal that U.S. employers are budgeting for 3.5% pay raises in 2025.  

“Given the stabilization of inflation and the easing of labor market conditions, we’re seeing a slight reduction in planned salary increases for 2025, though figures are still above the 3% pre-pandemic baseline that employees have come to expect,” says Ruth Thomas, chief of research and insights at Payscale. “When we zoom in on different industries and sectors, we observe that raises can vary by up to 1.4%, indicating that labor is in higher demand for some organizations.”  

Pay raise growth is on the decline—but slightly more people are set to receive one, the survey finds. Going into 2025, organizations are anticipating pay increases of 3.5% in the U.S. and 3.3% in Canada, a slight drop from 2024. So far, actual pay increases in the U.S. have averaged 3.6%, down from the 4% pay raises observed in 2023. Although rates are declining, 85% of employees will receive a base pay bump this year, compared to 83% last year.  

Employees in certain industries will experience rates exceeding 4%, while those in other lines fo work will barely surpass 3%. Government workers and those in the engineering and science fields can expect to see higher-than-average salary increases, averaging 4.5% and 4.2%, respectively. Conversely, retail and customer service employees and those that work in education—including teachers—will see raises of just 3.1%.  

While most salary increase budgets remain unchanged, organizations with higher and lower budgets both point to the economy as a main reason for the shift. Just two in 10 organizations anticipate a compensation budget that’s higher than last year’s, and even fewer are expecting a lower budget allocation. Most organizations (66%) expect budgets to stay the same. For those with higher budgets, increased competition for labor was the primary reason, followed by economic performance. For those with reduced salary budgets, outsized increases in years prior and concern about the economy were cited.  

“Although perceptions of the current economy are mixed, organizations in a growth phase and those facing headwinds are competing for the same talent,” says Lexi Clarke, chief people officer at Payscale. “Employers must have a compensation strategy built on data to guide their salary increase budgets, or they risk losing top talent this budgeting cycle.”  

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Source: HRO Today

https://www.hrotoday.com/news/ticker/u-s-employers-forecast-3-5-pay-increases-in-2025/

From the employer side, the number of jobs offering “a little flexibility” more than tripled between June 2024 and the same time last year, Flexa’s data showed.

Published Aug. 12, 2024

By Laurel KalserContributor

Dive Brief:

• Employers may have found a compromise for staff resisting return-to-office mandates: Offering them a little flexibility over when they have to be at work, according to an analysis released Aug. 4 by U.K.-based Flexa, a global job platform focusing on flexible workplaces.
• The analysis found that in June, 14% of job seekers, up from 11% in April, expressed a preference for roles offering “core hours” — where employees are required to work during certain hours, such as 11 a.m. to 3 p.m., but may complete their work in their own time.
• From the employer side, the number of jobs offering “a little flexibility” more than tripled between June 2024 and the same time last year, Flexa’s data showed. “A little flexibility” means employers can start or finish their work a little early or a little late, but otherwise work regular hours, according to the platform. In June, nearly 8 in 10 job postings mentioned the benefit, a steep increase from 50% two months earlier, Flexa found.

Dive Insight:

Workers’ post-pandemic preference for job flexibility isn’t limited to where they work, according to Flexa data from more than 4,000 job posts and preferences expressed by 9,473 job seekers in the U.S. and Europe between April and June 2024.

Employees are also looking for flexibility over when they work, the data showed. “Demand for core hours is not a million miles away from current levels of supply, but is increasing by contrast,” Flexa said.

In June, 39% of workers said they didn’t mind whether they had flexible hours or not (as opposed to it being something they sought specifically). But that’s a rapid downturn from April, when 49% said they didn’t mind, and it’s the lowest amount since December 2021, the platform pointed out, meaning employees increasingly seek it out.

Fortunately, “flexible working hours are something that far more employers agree with them on, thanks to the trend towards asynchronous work and output-led management,” Flexa CEO and co-founder Molly Johnson-Jones stated in the report.

For now, employers seem reluctant to offer anything more than “a little flexibility,” according to the data. In June, the number of job vacancies that offered core hours plummeted to 8%, down from 15% in April.

According to a 2022 survey from digital payroll solutions firm Deluxe, some employees may even prefer flexible working hours to the flexibility of working from home. One in five employees at small-to-mid-size businesses said the No. 1 action their employer should take to improve their working environment is to offer flexible scheduling that lets them adjust their work hours.

Notably, if employer support for flexible scheduling lags behind employee demand, employer support for hybrid working arrangements remains strong. Nearly two-thirds of employers who responded to the Society for Human Resource Management’s 2024 annual benefits survey, released in June, offer a hybrid work model.

Even so, most employers have yet to adapt their practices to support the shift to hybrid arrangements, a March report by TechSmith Corp., Global Workplace Analytics and Carytid Workplace Consultancy pointed out.

Leaders and managers need hybrid-related skills, such as establishing team or meeting norms, the report explained, but 3 out of 4 workers said they haven’t received training on these skills.

Employees’ current focus is on flexible working hours, Flexa indicated. “Not since the pandemic have workers cared as much [about this],” Johnson-Jones said. That could be for several reasons, such as staff wanting a better work-life balance or seeking a flexible schedule to balance out having less influence over their working location, she explained.

“Ultimately, flexible working hours meet many different needs for many different workers. And having even just ‘a little flexibility’ around work start and finish times can make a big difference,” Johnson-Jones added.

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Source: HR Dive

https://www.hrdive.com/news/job-seekers-increasingly-want-core-hours-flexibility/723571/

July 15, 2024

Almost half (47%) of U.S. organizations report their salary budgets for the 2024 cycle are lower than the previous year, as the overall median pay raise for 2024 fell to 4.1%, according to WTW.

ARLINGTON, VA, July 15, 2024 — Almost half (47%) of U.S. organizations report that their salary budgets for the 2024 cycle are lower than the previous year, as the overall median pay raise for 2024 fell to 4.1%, compared with 4.5% in 2023. That’s according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

The report found employers are being more conservative with their salary budgets as they anticipate lower demand resulting in longer-term stability in their employee base following a period of high resignation and turnover. While around two-fifths of employers (38%) report having trouble attracting and retaining talent in 2024, this figure has dropped almost 20 percentage points from two years ago (57%).

“

As the workplace stabilizes and employers look more toward the future, companies are reviewing and updating their compensation philosophies to ensure they align with business strategy,”

Lesli Jennings | North America leader, Work, Rewards and Careers, WTW

Overall salary budget increases are expected to rise by 3.9% in 2025, which, despite declining since 2023, remain fairly high.

In addition, total annual payroll expenses (which include salaries, bonuses, variable pay and benefit costs) continue to rise substantially in the U.S., as a majority (73%) of companies report that their total payroll expense was higher than last year.

Inflation can impact salary budgets in both directions. Those organizations that lowered salary budgets cited concerns related to cost management, weaker financial results and inflationary pressures as the leading causes, whereas those that raised salary budgets this year cited inflationary pressures and a tight labor market.

In light of these issues, companies are looking to make longer-term changes to their compensation programs. Over half (51%) of companies that have made changes to compensation programs or workplace flexibility have undertaken a compensation review for specific groups; almost half (49%) are hiring people at higher salaries, and 45% have undertaken a full compensation review of all employees.

Additionally, organizations are taking actions to address current market conditions and employee needs, particularly providing more workplace flexibility (52%) and improving the employee experience (52%).

“As the workplace stabilizes and employers look more toward the future, companies are reviewing and updating their compensation philosophies to ensure they align with business strategy,” said Lesli Jennings, North America leader, Work, Rewards and Careers, WTW.

“In light of cost management concerns, employers are taking more of a holistic approach to their reward programs, factoring in bonuses, long-term incentives, and health and wellness benefits; however, a more targeted review of specific employee groups could allow for greater support for those with in-demand skills or those in lower salary ranges. Pay equity is top of mind for employers, and giving a big-picture view of what employees are offered ensures the salary increase process is clear and emphasizes the connection to business performance,” added Jennings.

About the survey

The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from April to June of 2024. Approximately 32,000 responses were received from companies across 168 countries worldwide. In the U.S., 1,888 organizations responded.

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Source: WTW

https://www.wtwco.com/en-us/news/2024/07/employers-more-conservative-with-salary-budgets-as-employee-base-stabilizes

NEW YORK, June 27, 2024 – Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in redefining the world of work, reshaping retirement and investment outcomes and unlocking real health and well-being, today released the results of its Survey on Health and Benefit Strategies for 2025. The survey reveals that despite higher healthcare cost trends, the majority of employers will not cut health benefits, and many will make enhancements to their programs, although they may be doing so more selectively than in past years. 

“Employers are juggling faster cost growth with the need to offer attractive benefits and keep healthcare affordable for all employees,” said Ed Lehman, Mercer’s US Health and Benefits Leader. “That’s why it’s important they assess their investments in employee health more carefully than ever to create real, long-term value for employees.”

“To strike a balance between cost containment and ensuring access to high-quality care for their employees, employers are leveraging strategies like high-performance networks and enhanced clinical case management,” said Mr. Lehman. According to the survey, in 2025, more than a third of large employers (36% of those with 500 or more employees) will offer a high-performance, narrow network or other alternative medical plan designed to steer employees to quality, cost-efficient care. 

Focus on inclusive reproductive benefits 

The survey highlights the continued growth in benefits and resources to support women’s reproductive health needs, from pre-conception planning, which will be offered by 35% of large employers in 2025, to benefits designed to help women returning to work after becoming a parent (31%).

There has been significant growth in fertility treatment coverage in the past few years. As Mercer previously reported, the prevalence of coverage for in vitro fertilization (IVF) doubled between 2019 and 2023, when it reached 45% among large employers. The majority of employers providing fertility benefits say they are designed to be inclusive (61%), extending coverage beyond women who meet the clinical definition of infertility.

Ensuring access to specialized care during menopause is a new but fast-growing benefit. Next year, 18% of employers plan to offer specific resources for women going through menopause, up from just 4% in 2023.

This year, the survey explored coverage for men’s reproductive health for the first time and found that over a third of employers (35%) now offer coverage for men’s fertility testing and 20% cover sperm freezing, similar to the percentage that cover egg freezing (19%). 

Coverage for weight-loss medication likely to expand

The surge in utilization of glucagon-like peptide 1 (GLP-1) drugs for diabetes and obesity treatment had a notable impact on benefit budgets last year.

Currently, only about half of the large employers surveyed (52%) cover weight-loss medications. But as more GLP-1 drugs are approved to treat obesity, employers are facing growing pressure to cover them. Plans may experience substantial net new costs given that the drugs cost about $1,000 per month per patient (not counting manufacturers’ rebates, which vary) and a large number of patients may benefit from them.

The survey asked employers about their plans concerning coverage for weight-loss medications. Despite the cost, very few large employers have either dropped coverage or plan to drop it (3%), and only 10% say they are considering it. On the other hand, 27% of employers are considering adding coverage. 

Moving up the benefits agenda: climate-related health impacts 

Nearly two-thirds of large employer respondents said their workers have been affected by some type of climate event or natural disaster in the past two years — with over a third stating their business operations have been affected. While events like floods and wildfires have an obvious impact on employee health and safety, climate-related conditions such as extreme heat and poor air quality can lead to heat stress, heat stroke, chronic disease complications and mental health issues. 

The good news is that around half of respondents (53%) have at least some policies or programs in place in preparation for climate events or have plans to implement them in 2025. These include policies and resources to help employees in the aftermath of a disaster and guidelines to ensure worker safety and health during extreme weather conditions.

“Employers are starting to think about the impact climate events can have on their people and their businesses,” said Tracy Watts, Mercer’s National Leader for US Health Policy. “Employers could do more to plan for climate events and safeguard employee health. Conducting a vulnerability assessment to understand which employees are most at risk is a good place to start.”

Click here to learn more and download the report.

About Health & Benefit Strategies for 2025 

This study includes 697 organizations (537 organizations with 500 or more employees and 160 organizations with fewer than 500 employees). The study was fielded between March 21 and April 12, 2024. 

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Source: Mercer

https://www.mercer.com/en-us/about/newsroom/the-majority-of-us-employers-plan-to-maintain-their-current-benefits-in-2025/

July 12, 2024 | Kathryn Mayer

In light of heightened employee expectations and new laws requiring salary disclosures, calls for pay equity have never been louder. A new report indicates that while a majority of employers are working toward pay equity, there is still work to be done.

Nearly three-quarters of employers (70%) said they have analyzed their compensation strategies and shared existing gender pay gap statistics with employees and/or external stakeholders, according to new data from compensation firm beqom.

That has led to a number of problems being uncovered, according to beqom’s survey of 875 salary and compensation decision-makers in the U.S. and the U.K., including wage discrimination (cited by 64% of respondents), promotion disparities (57%), below-market salary ranges (54%), pay compression (53%), and gender pay gaps (48%).

In response to some of the pay problems they’ve uncovered, most companies have reported taking steps to close existing wage gaps and foster transparency, the beqom report found.

Those strategies include listing salary ranges within new job descriptions (81%), increasing salaries due to inflation and economic standard-of-living costs (68%), implementing a process for continuous feedback (67%), increasing pay to correct existing pay gaps and salary inconsistencies (65%), providing clear structure for bonuses and performance review processes (65%), and increasing salaries based on performance (65%).

The report finds that “employers are making meaningful progress and taking action,” said Tanya Jansen, co-founder and chief marketing officer of beqom, but it also uncovers a big gap: About 1 in 3 employers (34%) still don’t have a pay equity strategy in place.

Some Employers Struggling with Developing Strategy

Perhaps even more surprising, more than half of the compensation decision-makers surveyed by beqom said they doubt their company complies with global standards, and 45% said their approach to pay equity is hurting their ability to attract talent.

Compliance complexities are another matter. Just 2 in 5 employers (41%) said they are aware of global pay equity standards.

The data is evidence that employers are grappling with addressing wage discrepancies and promoting fair compensation, even when they know they should be doing more, Jansen said. “They understand the urgency in confronting wage gaps but find themselves navigating a complex web of regulatory requirements and stakeholder demands,” she said.

Numerous states now have laws requiring some kind of pay transparency, such as including pay ranges in job postings.

Part of the reason why some employers don’t have a pay equity strategy is because of those complexities and variations in standards. Meanwhile, smaller firms specifically may face difficulties because they often lack the necessary resources and expertise to address the topic, said Jeremy Feinstein, managing director at Empsight, a New York City-based human resource consulting firm specializing in compensation.

Jesse Meschuk, a Los Angeles-based human capital advisor and HR expert specializing in compensation, said figuring out a pay equity strategy can be “tricky.”

“What to disclose, how to get managers and employees ready—these are all actions that take careful planning and communication,” he said.

But not having a strategy in place proves to be problematic, experts said.

“Companies without a pay equity strategy are exposed to significant risks, including legal repercussions, challenges in attracting and retaining talent, and a weakened employer value proposition,” Feinstein said.

“The one-third who don’t have a strategy in place need to do so, and do so soon,” Meschuk said. “Regulations are increasing across the U.S.”

Wage Discrimination, Gender Pay Gap

The findings from beqom follow a report from Payscale earlier this year, which found that the U.S. gender pay gap for 2024 remains the same as last year, with women earning just 83 cents for every dollar earned by men. The gap is even worse for women who work remotely (79 cents) compared to women who work in person (89 cents). It’s also worse for working mothers, with the report finding that working mothers make 75 cents for every dollar a working father earns, while women and men without children have a pay gap of 88 cents.

Since 2019, the uncontrolled gender pay gap has narrowed by 5 cents for Black women and Native American and Alaska Native women, as well as by 4 cents for Hispanic women and Native Hawaiian and other Pacific Islander women, Payscale found.

While that movement is helpful, it’s not especially encouraging overall, said Ruth Thomas, pay equity strategist at Payscale, earlier this year.

“The only small sign of progress is pay gaps for women of color are closing more rapidly than pay gaps overall, but this is partially because these pay gaps are wider to begin with,” she said. The data implies the need for “legislators and employers to take action to break this cycle of stalled pay gaps and speed up the historically slow progress toward gender equality.”

Getting a Pay Equity Strategy in Place

To establish a robust pay equity strategy, Feinstein recommended that employers first examine their job architecture framework. This involves ensuring that employees are correctly classified within the organization through clearly defined job families, sub-families, and individual roles within them, combined with a comprehensive grading/leveling strategy, he said.

Meschuk said organizations should “gather all the relevant information you will need— job levels, salary ranges, individual employee profiles/experience, performance evaluation histories, promotion data, and actual compensation information.

“If some of this does not yet exist, it may make sense to do some initial work to best position yourself for a robust analysis—put in place a rudimentary job leveling/evaluation system so you can compare like jobs across departments and ensure you have a sufficient number of data points.” 

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Source: Society for Human Resource Management (SHRM)

https://www.shrm.org/mena/topics-tools/news/benefits-compensation/1-in-3-employers-don-t-have-a-pay-equity-strategy-