Adjustments in 2022 will result in comparable pay among all company employees

Bret Thorn | Oct 19, 2021

McDonald’s has essentially achieved equal pay for women and other historically underrepresented groups across company-owned restaurant and corporate employees in the United States, the company announced Tuesday.

Chicago-based McDonald’s said it employs more than 180,000 people, that employees of all genders now receive equal pay for comparable work at all company-owned restaurants, and that women are paid 99.16% of men for comparable work among corporate staff in the United States. Globally that figure is 99.85%.

A McDonald’s representative said the U.S. figure would reach 100% once adjustments are made during next year’s “compensation cycle.”

That announcement came after working with pay analysis expert Mercer to conduct a study of corporate staff and company-owned restaurants globally.

Around 7% of McDonald’s approximately 39,000 locations worldwide are company-owned, the representative said.

The announcement was made in a letter to the global McDonald’s system from global chief people officer Heidi Capozzi.

“Making McDonald’s an inclusive brand is a core value because it isn’t just the responsibility of one person or one team. It depends on all of us,” Capozzi said. “Over the past 18 months, we’ve worked together to create a future where equality, fairness and opportunity aren’t just goals, but the lived experience of every single person in our communities.”

Earlier this year, McDonald’s said it was tying senior leader compensation in part to goals it set for developing a more diverse leadership team. Those goals include having 35% of positions of senior director and above filled by people of underrepresented groups, such as women and people of color, by 2025. It set a goal of having at least 45% of those roles filled by women by 2025 and 50% by 2030.

McDonald’s said it would continue to conduct a global pay analysis annually.

“We recognize that to realize our aspiration [of equal pay] we must also keep actively attacking the systemic biases that negatively impact women and people with other marginalized identities,” Capozzi said in the letter. “We’ll do this by continuing to hire, promote, and retain diverse, world-class talent; by offering the most competitive learning and development programming among our peers; and by creating formal mentoring and sponsorship programs to accelerate success in our workforce. McDonald’s has also joined the Catalyst Gender and Diversity KPI Alliance, a group of DEI advocates, corporations, academics, and trade organizations that support the adoption and use of a set of key performance indicators to measure gender and diversity in their organizations.”

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Source: Nation's Restaurant News 

https://www.nrn.com/quick-service/mcdonald-s-achieves-equal-pay-women-and-other-underrepresented-groups-corporate

On September 1, 2021, the Office of Federal Contract Compliance Programs (OFCCP), the Department of Labor sub-agency charged with enforcing affirmative action and non-discrimination requirements imposed on federal contractors by way of Executive Order 11246, announced that it was reversing its prior position regarding the use of EEO-1 compensation data collected by the Equal Employment Opportunity Commission for calendar years 2018 and 2019 (the so-called “Component 2”).1

Specifically, OFCCP announced that effective immediately, it is rescinding its prior policy under which the agency would not “request, accept, or use EEO-1 Component 2 data.”  The prior policy was based on OFCCP’s belief that it would not find significant utility in the data, “given limited resources and [the data’s] aggregated nature.”  

Reversing course, OFCCP now indicates that it has determined that the prior non-use policy was “premature and counter to the agency’s interests in ensuring pay equity.” The agency claims that its prior decision to not use Component 2 data was premature because, at that time, OFCCP had little information about the response rate of the collection, how the data was submitted and assembled, or the completeness of the data. Nor did the agency have the opportunity to review and analyze the data.

OFCCP’s announcement states that it will use information gathered in the prior Component 2 data collection to assess its utility for providing insight into pay disparities across industries and occupations, with the stated purpose of “strengthening Federal efforts to combat pay discrimination.”  Specifically, the agency indicates that it will evaluate the data’s utility, “because the joint collection and analysis of compensation data could improve OFCCP’s ability to efficiently and effectively investigate potential pay discrimination.”  OFCCP’s position is that compensation data, in conjunction with other available information, such as labor market survey data, could help OFCCP identify neutral criteria to select contractors for compliance evaluations.

Given the aggregated nature of the data, it is likely to be of limited use in proving pay discrimination, which usually involves a very close examination of the work and compensation of a specific individual vis-à-vis others.  That said, OFCCP’s 180-degree turn provides yet another example of the aggressive stance the Biden administration has taken (and is expected to continue to take) with respect to issues of pay equity, and its willingness to use the carrot of federal contracting to regulate private-sector employers that do business with the federal government.

Possibly the most significant consequence of this decision is that it may have the potential to expose contractor pay data to public disclosure through FOIA requests.  While an individual employer’s Component 2 data that has been provided to the EEOC is clearly protected from further disclosure by the EEOC, the FOIA protections that apply to EEO-1 data that is in OFCCP’s possession has been a subject of prior litigation.  

Littler’s WPI will apprise of relevant developments as they occur.

 

Footnotes

1 By way of background, in 2016 the EEOC published a final rule requiring employers to report certain compensation data of their workforce sorted by race, sex, ethnicity, salary range, and job category.  In 2017, the agency announced that it was suspending this effort and would not move forward with this collection.  Ultimately, a federal district court ruled that the agency’s suspension of the collection was unlawful, and required the EEOC to collect pay data for calendar years 2018 and 2019.  That collection was completed in early 2020.

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Source: JD Supra

https://www.jdsupra.com/legalnews/ofccp-reverses-course-will-use-eeo-1-8971089/

Published Sept. 14, 2021 by Ryan Golden 

Dive Brief:

• The U.S. Department of Labor's Office of Federal Contract Compliance Programs rescinded Sept. 2 a Trump administration notice that it did not intend to request, accept or utilize pay data collected under Component 2 of EEO-1 forms.
• In November 2019, OFCCP announced that it would not request, accept or use Component 2 data collected as part of EEO-1 forms for the 2017 and 2018 calendar years. In its Sept. 2 update, however, OFCCP did note that it had "previously expressed interest" in collecting summary compensation data ultimately by collaborating with the U.S. Equal Employment Opportunity Commission as part of the EEO-1 filing process.
• "Upon further consideration, OFCCP believes the position taken by the agency in the November 2019 notice was premature and counter to the agency's interests in ensuring pay equity," the agency said. OFCCP added it plans to examine Component 2 data because analyzing that data, in conjunction with other inputs, "could help OFCCP identify neutral criteria to select contractors for compliance evaluations."

Dive Insight:

The change is, in part, a reflection of the differing views of the OFCCP under the Trump and Biden administrations, respectively. In 2019, the agency disputed whether pay data collected via Component 2 would be useful; it said the data was collected in a "highly aggregated format" that "is not collected at a level of detail that would enable OFCCP to make comparisons among similarly situated employees as required by the Title VII standards that OFCCP applies in administering and enforcing Executive Order 11246."

OFCCP's reversal also has to be understood within the context of EEO-1 Component 2, an initiative that has experienced its own share of see-saw activity during the past four years. After a lengthy series of court battles required EEOC to institute pay data collection for 2017 and 2018, the agency ultimately declined to renew Component 2 for future years. 

Under recently appointed Chair Charlotte Burrows, however, EEOC has indicated it will continue to pursue methods for examining pay equity in U.S companies. The agency last year announced it was considering a rulemaking to include a new pay data reporting requirement to be published by October 2021. Per its filing with the Office of Information and Regulatory Affairs, that effort is still in the prerule stage.

Both Burrows and the Biden administration at large have said they aim to address pay equity in the future. In 2019, while a commissioner at EEOC, Burrows told an audience during a conference session that she felt EEO-1 Component 2 was "very useful" to EEOC. But the Commission's majority-Republican composition may oppose efforts to reinstate the requirement. Former chair and current commissioner Janet Dhillon, a Trump administration appointee, previously expressed concerns about Component 2.

EEOC's first pay data report, based on 2017 and 2018 Component 2 data, is scheduled to be published on Dec. 31, 2021, according to an agency announcement in July 2020.

Meanwhile, employers also may need to pay attention to state and local developments on pay data collection. California instituted a pay data reporting requirement for all employers in the state that are required to file EEO-1 reports. California employers were required to report pay data to the state's Department of Fair Employment and Housing by March 31.

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Source: HR Dive

https://www.hrdive.com/news/ofccp-reopens-door-to-request-employers-reported-pay-data/606556/

If not now when? The pressures on today’s workforce have never been greater. Healthcare, finances, work, children, aging loved ones; it is all a balancing act. If just one piece of that intricate puzzle falls out of place, things can go poorly.

We've seen this; we know this.  We hear about it on the news. We hear our friends and colleagues tell stories. We see women, and men, leave the workforce much earlier than expected because the precarious juggling act is too much.

What kind of impact does caring for an aging loved one have on working adults? Are employers supportive? Do employees get the help they need? We asked these questions in the Homethrive 2021 Employee Caregiving Survey to find the answers.

Survey at a Glance

The Homethrive 2021 Employee Caregiving Survey was conducted  via a third-party survey provider from June 28 - July 21, 2021. Two hundred adults in the U.S., who work outside the home while also providing support for an aging loved one, were surveyed about how those caregiving responsibilities impact their employment. Respondents were from a variety of companies and industries, make at least $50,000 per year, and currently support at least one aging loved one. The survey pool was 64% female and 36% male.

• 43% of respondents are distracted, worried, or focused on caregiving — and not their jobs — 5 or more hours per week, while 20% are distracted at work more than 9 hours per week
• More than half of respondents indicated their supervisors were not as supportive as they needed them to be about their outside-of-work caregiving responsibilities
• One third of respondents said that because of their caregiving responsibilities outside of work, their supervisor had noticed a change in their work habits either because it was impacting their job performance or because they were noticeably under stress
• Despite the growing need for employee benefits that support caregivers, 79% of employers are not yet offering them or are not communicating about such benefits
• The vast majority (84%) of respondents were receptive to the idea of their employer offering a benefit that provided them with resources, guidance, or support for caregiving

To continue reading, please go to: 

https://info.homethrive.com/2021employeecaregivingsurveyreport 

By Joanna Kim-Brunetti | August 31, 2021

The Canada Pay Equity Act goes into effect today, August 31, 2021, marking the official commencement of a major international move to advance workplace equality.

The Act has been highly anticipated since its original passage in 2018. Now that the law is in full force, affected employers must develop and implement pay equity plans that address systemic gender-based discrimination in their workplaces.

We’ve previously taken a deeper dive into examining the Act and its requirements. Below we’ve outlined a recap on the law and how it may signal potential legislative changes in the U.S..

The Canada Pay Equity Act in a nutshell

The Canada Pay Equity Act applies to federally regulated employers in public and private sectors with 10 or more employees.

An integral piece of the Act requires that employers draft and post pay equity plans for the purpose of identifying and resolving gender wage gaps. The plans must follow a strict set of criteria, which obliges organizations to: identify job classes; determine if gender predominance exists in those job classes; evaluate work; calculate compensation; and compare compensation.

Upon completion of the above tasks, employers must increase compensation for the predominantly female job classes that are comparatively underpaid within three to five years of the law’s effective date.

As further means of accountability, employers must also provide employees an opportunity to comment on draft plans and take that feedback into consideration. They have three years to implement their plans.

Employers with 100 or more employees (and employers with 10 to 99 employees if some or all employees are unionized)  must also establish a representative pay equity committee. The committee is responsible for developing the pay equity plan, as well as reviewing and updating it every five years.

Employers that do not comply with the Act are subject to penalties. Violations could cost an organization between $30,000 to $50,000, as imposed by the Canada Pay Equity Commissioner.

Pay equity trend picks up speed, at home and abroad

Canada’s pay equity law may be a breakthrough in today’s world, but such legislation is shaping up to be standard in the world of tomorrow. As other recent efforts in the U.S. and abroad show, the workplace equality trend isn’t going away any time soon – in fact, it’s picking up speed. Rhode Island and Colorado are among the wave of states working to close the gender and racial pay gap. The issue has even made its way to Congress, which contemplated the idea of passing federal pay equity legislation last spring.

The Canada Pay Equity Act’s continuous improvement model and a societal shift toward progress are examples that performative measures won’t be enough for organizations when it comes to confronting systemic discrimination. Change must be authentic and forward moving. Ongoing accountability and maintenance are critical factors in advancing effective diversity, equity, and inclusion (DEI) goals.

Employers can get ahead of the curve by implementing a pay equity program within their organizations and conducting a pay equity audit. Ongoing pay equity analytics and DEI monitoring are key features of our PayParity solution, which provides DEI consulting services and pay equity software employers need to be proactive. PayParity addresses pay disparities at the intersection of race and gender, allowing employers to narrow in on the root-causes for perpetuating wage discrimination. 

To learn more about how to meet your organization’s DEI goals, download our white paper Designing a Successful Pay Equity for Your Organization.

Organizations looking to disclose pay equity, diversity, and inclusion data information should do so within an ESG reporting framework. Download our white paper, DEI in ESG Reporting to learn about the different standards you can leverage for sharing your progress.

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Source: Trusaic

https://trusaic.com/blog/canada-pay-equity-act-takes-effect-today/?utm_campaign=IW&utm_medium=email&_hsenc=p2ANqtz-87wm5S4p4aZXYAXbbivrf9-KzYE6k7D8b6CxmPLaHl8ryoHHCare3qKX2LsH4LlzWSX4LPA9w9f18Wpv_gnKrWpNGZRJYGrauHAwcsjioARnYDIig&_hsmi=154271496&utm_content=154271496&utm_source=hs_email&hsCtaTracking=9156a467-9829-4e4e-915c-e959096ba2d7%7C99b23ad3-f39c-42f4-8d15-d0b69eebfd08

By Mary Schlangenstein | August 25, 2021

Delta Air Lines Inc. will impose a $200 monthly surcharge on employees who aren’t vaccinated against Covid-19, becoming the first major U.S. company to levy a penalty to encourage workers to get protected.

The new policy was outlined in a memo from Chief Executive Officer Ed Bastian, who said 75% of the carrier’s workers already are vaccinated. Increasing cases of coronavirus linked to a “very aggressive” variant are driving the push for all employees to get the shots, he said in the note to employees Wednesday.

The fee applies to employees in the airline’s health-care plan who haven’t received shots by Nov. 1. The company also will require weekly testing for employees who aren’t vaccinated by mid-September.

Delta stopped short of a mandatory vaccine requirement like the one imposed earlier this month by United Airlines Holdings Inc. and other companies. Goldman Sachs Group Inc., Alphabet Inc.’s Google and Facebook Inc. also have announced vaccine requirements.

Delta is confident that its approach will succeed in moving its worker vaccination rate beyond 75%, a spokesman said when asked why the company didn’t impose a mandate. The potential penalty is “well within” legal parameters, he said. 

While vaccine requirements have increased since Pfizer Inc. and BioNTech SE’s vaccine received full Food and Drug Administration approval on Monday, employers are treading carefully for fear they’ll hurt morale and spur defections in a tight labor market. Some consultants doubt that surcharges will be as persuasive as demanding inoculation, though the size of Delta’s surcharge could change that calculus.

“Vaccine hesitant employees are likely to see this as a mandate or a punitive measure, as it creates an additional annual cost of $2,400 for that employee,” said Brian Kropp, chief of human-resources research for the Gartner consulting firm. 

The fee for unvaccinated employees is “to address the financial risk” from their decision, Bastian said. The average hospital stay for Covid-19 patients has cost Delta $50,000 each, he said.

“With this week’s announcement that the FDA has granted full approval for the Pfizer vaccine, the time for you to get vaccinated is now,” Bastian said.

American Airlines Group Inc. and Southwest Airlines Co. continue to encourage employees to be vaccinated but haven’t imposed mandates.

Delta was the best performer on the S&P 500 Airlines Index, rising 1.9% to $41.30 at 2:09 p.m. in New York. 

In May, Delta became the first major U.S. airline to require coronavirus shots for new employees. The airline had agreed not to mandate vaccinations for its pilots, the only major work group represented by a union, until at least Nov. 21. The pact also provided incentives for pilots to be vaccinated.

Delta would have to negotiate a new agreement “over any employer-mandated vaccination for pilots,” the Air Line Pilots Association said in a statement. Union leadership “has consistently advocated to maintain the right of each individual pilot to consult with his or her medical provider regarding Covid-19 vaccinations or booster doses.”

Under the policy announced Wednesday, any worker not fully vaccinated by Sept. 12 will be required to take a weekly coronavirus test “while community case rates are high,” Bastian’s memo said. 

Employees who aren’t vaccinated must wear masks in all indoor settings, effective immediately. Delta also said that starting Sept. 30, the airline would preserve full pay for workers who have received both shots but who still get sick and may end up on short-term disability.

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Source: Bloomberg

https://www.bloomberg.com/news/articles/2021-08-25/delta-air-lines-to-impose-surcharge-on-unvaccinated-employees

PwC US Pulse Survey: Next in work

At a pivotal moment for the future of work, companies can help their businesses and employees thrive

Employees have had more than a year to reflect on their needs and aspirations, and many want a new model of work. Our latest US Pulse Survey found that 65% of employees are looking for a new job. We also talked to executives, 88% of whom told us they are seeing higher turnover than normal. 

For the most part, executives have a good grasp on why their employees are looking elsewhere. But when it comes to offering incentives that employees want most, they’re falling short in two key areas: benefits and comp. This employer-employee tension compounds the challenge facing companies eager to redesign work. Rising inflation, the surging delta variant and tension over vaccines, masks and shifting return-to-work plans are creating extra uncertainty.

How can executives balance their strategic and operational goals with shifting employee expectations? Companies have a tremendous opportunity to transform work. By redesigning work, you can help drive growth, better anticipate uncertainty and create a workplace that top talent is eager to join. To successfully execute your plans, you’ll need to figure out your hybrid work model, make changes to processes and operating models, revamp strategic planning and, most importantly, attract and retain top talent.

Our survey offers insights into the changes executives are making as they redesign work and how they are centering many of those decisions around people.

To continue reading, please go to:

https://www.pwc.com/us/en/library/pulse-survey/future-of-work.html

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Source: PricewaterhouseCoopers (PwC)

New York-based Moog went into "survival mode," said Kristine Karnath, so the 70-year-old firm sought to plug up gaps in its support system for workers.

Published Aug. 19, 2021 by Ryan Golden

When a global crisis strikes, even the most firmly rooted organizations may need to pause and re-evaluate.

New York-based aerospace and industrial manufacturer Moog recently celebrated its 70th year in business. Since its founding, the company has sought to sustain a culture in which employees can easily collaborate, be creative and have autonomy without the pressures of bureaucracy or hierarchy, according to Kristine Karnath, Moog's U.S. director of benefits. That culture, she added, influences how Moog makes benefits decisions.

But COVID-19 put the company into "survival mode," Karnath said during an Aug. 11 presentation as part of the Disability Management Employer Coalition's 2021 virtual annual conference. When its clients in the commercial airline industry suffered financial losses, Moog's leaders knew it had to adjust.

"The last thing we wanted to do was have a layoff or a furlough," Karnath said. "We were able to maintain everything that we had pre-pandemic and continue that moving forward, but we started to look at what do we need to change."

Moog realized it was entering a new world, and it sought a benefits strategy that could adapt to the changes brought on by the pandemic, Karnath said. One example was a telemedicine platform that Moog worked to ensure was "completely accessible" to employees; it also added behavioral health support to the platform after seeing utilization spike.

Prior to the pandemic, the company also had offered on-site medical centers and fitness classes, and it transitioned those services to a virtual format. It added mental health and physical wellness holidays to its schedule after realizing it had gaps in its holiday schedule and observing that, despite having an unlimited vacation policy, staff were not taking days off.

"We wanted specifically to have it be holidays where the entire business was shut down so that people didn't feel the pressure to work," Karnath said. "We wanted those days where we kind of forced people to take that time off and to recoup a bit."

Moog also realized it lacked benefits to support caregivers as employees began taking care of children at home during the work day. It added a program to address that need, Karnath said.

Remote work creates two groups of employees

Few Moog employees were remote prior to the pandemic, Karnath said. But with the need to send some to work from home came the division of its U.S. employees essentially into two groups. That proved a challenge, in part, because the company traditionally maintained a similar benefits package across the board for all employees, she explained.

"Our on-site employees looked at our employees at home and thought, ‘well they're on permanent vacation, they're not working, they're watching TV,'" Karnath said. "We also knew that our employees at home were dealing with different situations … they were a parent, a teacher, a caregiver; they had multiple roles they were now playing and trying to balance all of that."

Some on-site employees wanted hazard pay, but Moog pushed back. "We didn't feel that it was appropriate to pay those employees hazard pay because we were doing everything we possibly could to keep those employees safe," Karnath said. "If we paid hazard pay, we felt that that was saying, ‘you are in a hazardous situation, we're not doing everything we can, so we're going to pay you additional.'"

Similarly, Moog did not want to recognize one group of employees without recognizing the other, Karnath said. Ultimately, it decided to focus on the particular issues both groups faced. It offered short-term disability coverage to those with medical conditions that put them at risk of contracting COVID-19. It offered paid leave to employees with immunocompromised persons at home and continued to offer unpaid leave with full benefits and the promise of returning to their job after the end of the period of paid leave.

For virtual workers, Moog asked managers to shorten meetings times from 60-minute windows to 50-minute windows to give employees the ability to take care of tasks outside of work. "There's nothing magical about that last 10 minutes," Karnath said. "We knew that people at home needed time. You can't tell your kids to wait eight hours so that you can help them."

Toeing the line on communications

Keeping an apolitical, fact-based approach is important when relaying information about COVID-19 safety to employees, Karnath said. Moog put forth branded messaging to employees about the virus, vaccines, policies and other topics such as staying active during quarantine. At times, that messaging would occur three to four times per week.

"When we communicated information, we knew we needed to keep the politics out of it as well," Karnath said. "Any area we thought employees might be questioning, nervous about or anxious about, we wanted to make sure that we were addressing that."

In 2019, Moog decided it would focus on mental health and well-being throughout 2020. It kept this plan moving into the pandemic, Karnath said, tailoring specific mental health topics to particular months. February saw a focus on building relationships, while August dealt with community service and November with financial wellness.

"We wanted people to see that mental well-being wasn't just about depression, anxiety or a diagnosable condition," Karnath said, "we wanted them to see it was about everyday life."

However, the company realized it needed to build on those efforts even further, she added. "We were being bombarded with so much information, so many emotions, that there were a lot of people who didn't even recognize that they were feeling anxious, they were depressed," Karnath said. In addition to the use of telehealth benefits and employee assistance programs, Moog trained managers to recognize mental health issues in their reports and point them toward available resources.

Along those same lines, Moog encouraged managers to be vulnerable and open up to their teams about their struggles. Within her own team, Karnath talked about times when she had trouble focusing on work. "Our conversations really changed once I started sharing that," she said. "There was this feeling that I don't need to be that A-plus employee. I can admit that I'm having a hard time here, and that's okay. And they also knew that it was a safe place to do that."

Going forward, Karnath said Moog needs to continue to adapt to employees' needs as expectations around work change. She added that the organization's focus on transparency and trust has helped manage its culture during a turbulent time.

"We have some managers who think when this is all over we're just going to go back to 2019 and everything is just going to go back to the way that it was," Karnath said. "We know as an organization that's not true. The world has changed."

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Source: HR Dive

https://www.hrdive.com/news/how-the-pandemic-forced-one-manufacturer-back-to-benefits-basics/605260/

Among other things, more flex time, work-from-anywhere periods, and continuing stipends for home offices

By Suman Bhattacharyya

Aug. 14, 2021 

With the coming of the hybrid workplace, employee benefits are being put under the microscope. And many companies are realizing that the current crop of benefits may not make as much sense as they used to.

“A lot of employers are re-evaluating their benefits propositions,‘’ says Lauren Mason, a principal at Mercer, a management-consulting firm. “Employee values have shifted quite significantly because of the stressors of the pandemic and around child care and other concerns, as well as just re-evaluating life circumstances.”

For many companies, this means expanding some benefits while making others less of a priority. In a Care.com survey of 500 human-resource executives in the U.S. conducted in December 2020 and January 2021, 66% said they plan to offer more flexibility, with 63% planning to increase child-care benefits and 41% planning to expand senior-care offerings. At the same time, some benefits that were important pre-Covid, including commuter benefits, on-site meals and on-site child care, are becoming less important, the survey found.

Here’s a closer look at how companies and HR experts expect benefits to change in a world transformed by the pandemic:

Flexible time off that employees can take when they need.

One lesson companies learned from the pandemic is that people often work best when they feel they have more control over their hours, tailored to their specific life needs at the moment. It’s best to focus on output, many HR executives say, rather than time spent working.

One result is that the notion of flexible time off where there are no formal limits, and employees simply take time off when they feel they need it—is one policy that experts say has become more popular, and will become even more so in the years ahead. According to Mercer surveys, the percentage of employers offering such “unlimited paid time off” to at least some employees rose to 20% this year from 14% in 2015.

Fair Isaac Corp. FICO -0.48% , a data-analytics software firm, rolled out a nonaccrual-based vacation policy this year for most of its U.S. employees. “Traditional vacation policies assume that you earn it and then you use it on sort of a 9-to-5, Monday-through-Friday kind of basis. It was just an outdated concept,” says Rich Deal, executive vice president and chief human-resources officer at Fair Isaac. He says the company started a “much more fluid policy that’s trust-based. It doesn’t put accrual limits and usage limits around it, and that acknowledges that work can happen at any time of the day.”

Under flexible vacation policies, managers still have to approve time-off requests, and employees will still be held accountable for poor performance due to extended leave periods. “If you take so much time off that you don’t perform, that’s a performance issue and you can lose your job,” says Iain Urquhart, senior vice president of Americas at Barco, BAR 0.20% a Belgium-based visualization-technology company that moved to a flexible vacation policy in July.

Fewer sick days but more ‘home leave’ days.

The Covid pandemic highlighted the importance of working around schedules and needs, including circumstances when an employee may be feeling slightly ill but can still contribute a portion of their workload. Nicholas Bloom, an economics professor at Stanford University who studies remote work, calls this “home leave.”

Dr. Bloom says a company might give workers 10 extra days of home leave a year, beyond the work-from-home days allowed. In return, he says, the employee might take, perhaps, two fewer of their allotted sick days.

“Sick leave is when you really don’t work, but with home leave, for all intents and purposes, you’re working,” he says. “It’s far less costly. If you think of sick leave, you may get zero output, but with home leave, you may get 80%.”

Work-from-anywhere periods.

If the pandemic taught companies anything, it was that employees relish the opportunity to work for extended periods outside the office.

Revolut, a London-based financial-technology company, this year increased allocated work-from-abroad time for its employees to a maximum of 60 days from 29 days, in response to employee surveys.

“Creating this policy was clearly motivated by last year’s experience, and it represents what we felt could be beneficial and appreciated by a young, global workforce like ours,” says Jim MacDougall, the company’s vice president of people. Mr. MacDougall says the company will monitor employee feedback, and then decide whether to make it a continuing benefit.

Alphabet Inc.’s GOOG +0.49% Google also has expanded its work-from-anywhere allocations for employees, from two weeks to four weeks. And business-information services company Thomson Reuters TRI -1.42% says it’s set to unveil a new leave approach in the coming months that will incorporate work-from-anywhere benefits.

“The pandemic has accelerated people’s focus on how they want to live their lives and how work can fit into their ideal life, and work from anywhere—flexible work, primarily—gives them more opportunity to do that,” says Mary Alice Vuicic, the company’s chief people officer.

Continuing stipends for home offices.

According to a survey of more than 3,600 world-wide employees carried out by Gartner Inc. within the past year, 71% said they feel their employer should help cover home-office expenses while they are asked to work remotely, though only 44% of employees reported that their organizations covered home-office expenses for some or all employees.

Bluecore, a New York marketing-technology company, says it’s going to continue offering its employees a $200 monthly stipend, with wide latitude on how it is spent. “It could be for health and well-being, like the Calm app, or workout equipment, or if you need more office type of stuff, you can use it relative to however it makes you productive,” says Michelle McComb, chief financial officer at Bluecore.

Expanded discounted services for employees.

Experts expect companies to offer employees more deals based on discounted rates companies negotiate with third-party vendors. Mercer’s surveys found that almost a quarter of all employers with 500 or more employees say they will add or expand such voluntary benefit offerings in 2021.

Two areas that were of particular importance to employees during the pandemic: pet insurance (for all those dogs and cats adopted during lockdown) and identity-theft protection (as a result of employees using their work computers for personal activities while working from home).

A recent study from Willis Towers Watson, a consulting firm, found that 47% of employers surveyed offered pet insurance, with 69% saying they would offer it by 2022 or beyond. The study found that 53% of employers currently offer identity-theft protection, with 78% planning to offer it by 2022 or later.

Benefits that will aim to translate in-office perks for hybrid work environments.

Before the pandemic, many offices offered in-office catering, on-site gyms and other perks to attract employees. In a hybrid context, companies are exploring how to offer similar benefits for employees who are working remotely, in part through delivery and subscription and digital services.

A survey by Willis Towers Watson found that 80% of employers were planning to increase perks this year. It further found that most employers suspended on-site perks, such as food, gyms, fitness classes and social events, and instead offered virtual perks, such as access to health and wellness apps and telehealth.

Infragistics, a user-experience technology company based in Cranbury, N.J., offered on-site cooked meals to its employees before the pandemic. The company, which plans to reopen its Cranbury office this fall, will have a hybrid workforce. So while it’s planning to bring the chefs back to the office, it also is trying to figure out how to offer some of the food benefits to employees working at home.

“It probably wouldn’t be meals, but fruits and stuff like that, but we don’t have anything official yet,” says Dean Guida, the company’s CEO.

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Source: The Wall Street Journal

https://www.wsj.com/articles/employee-benefits-hybrid-workplace-11628796247

Only 3% of employers freezing salaries

ARLINGTON, VA, July 20, 2021 — Pay raises are making a comeback. U.S. companies plan to give employees larger raises next year as they recover from the economic fallout from the pandemic and face mounting challenges attracting and retaining employees, according to a new survey by Willis Towers Watson (NASDAQ: WLTW), a leading global advisory, broking and solutions company. The survey also found employers are continuing to recognize their high performers with significantly larger raises.

The 2021 General Industry Salary Budget Survey found only 3% of companies are not planning to boost salaries next year, a drop from 8% that didn’t give raises this year. Notably, raises are returning to pre-pandemic levels. According to the survey, companies project average salary increases of 3.0% for executives, management and professional employees, and support staff in 2022. This is up from the average 2.7% increases companies granted this year. Production and manual labor employees are in line to receive average increases of 2.8% next year, higher than the average 2.5% increases this year. Salary increases hovered around 3.0% for the past decade until the pandemic forced companies to trim budgets. The larger raises coincide with a surge in demand for labor and a shortage of supply of hourly workers and specific professional roles with premium skills.

Among the major industry groups, high-tech and pharmaceutical companies project the largest increases (3.1%) followed by health care, media and financial services companies (3.0%). Oil and gas industry companies, as well as leisure and hospitality industry companies, are budgeting significantly lower salary increases for employees (2.4%). Retail industry companies are projecting average raises of 2.9% next year.

“Companies are between a rock and a hard place when it comes to compensation planning,” said Catherine Hartmann, North America Rewards practice leader at Willis Towers Watson. “On the one hand, employers need to continue effectively managing fixed costs as they rebound from the pandemic. On the other hand, companies recognize they need to boost compensation with sign-on, referral and retention bonuses; skill premiums; midyear adjustments; or pay raises. Or they can utilize all of these options, especially with millions of Americans quitting their jobs, changing careers or postponing looking for employment.”

Top performers continue to receive larger raises

The survey found companies continue to reward top performers with significantly larger pay raises than average-performing employees. Management and professional employees receiving the highest possible performance rating were granted an average increase of 4.5% this year, 73% higher than the 2.6% increases granted to those receiving average ratings. This trend continued for support staff and hourly workers who received the highest ratings.

The survey also revealed over nine in 10 companies (91%) awarded annual performance bonuses this year based on 2020 performance, significantly higher than 76% of companies that awarded them last year. Bonuses, which are generally tied to company and employee performance goals, averaged 16.0% of salary for management and professional employees. Bonuses for support staff and production and manual labor employees averaged 8.0% and 5.5%, respectively.

“Attracting and retaining employees remains a major challenge for employers. In fact, the current environment makes these challenges even more difficult. Employers need to deliver a sound employee value proposition supported by comprehensive Total Rewards programs. Beyond competitive salaries, which are table stakes at the moment, companies also need to focus their spend on a diverse set of health, wealth and career programs to drive employee engagement,” said Hartmann.

About the survey

The 2021 General Industry Salary Budget Survey was conducted by Willis Towers Watson Data Services between April and June 2021. A total of 1,220 companies representing a cross section of industries participated. The report provides data on actual salary budget increase percentages for the past and current years, along with projected increases for next year.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 45,000 employees serving more than 140 countries and markets. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas — the dynamic formula that drives business performance. Together, we unlock potential.

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Source: Willis Towers Watson plc.

https://www.willistowerswatson.com/en-US/News/2021/07/us-employers-planning-larger-pay-raises-for-2022-willis-towers-watson-survey-finds