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  • August 18, 2021 10:55 AM | Bill Brewer (Administrator)

    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 BarcoBAR 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

  • August 11, 2021 7:44 AM | Bill Brewer (Administrator)

    2022 Salary Increases Look to Trail Inflation

    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

  • August 03, 2021 12:05 PM | Bill Brewer (Administrator)

    By Robert Sheen | July 29, 2021

    Canada is making strides to close the gender wage gap with the adoption of its historic Pay Equity Act. Originally passed in December 2018, the Act goes into full effect August 31, 2021.

    The Canada Pay Equity Act aims to address systemic gender-based discrimination, foster equal compensation for work of equal value, and proactively maintain pay equity going forward. To achieve these goals, the Act requires federal employers to establish a pay equity plan through a rigorous process, then create a pay equity committee to develop, execute, and maintain said plan.

    Below we’ve outlined what employers need to know about designing a pay equity plan, how to create a pay equity committee, who the Act applies to and why organizations in the U.S. should start preparing now.

    Impacted organizations

    The Canada Pay Equity Act applies to federally regulated organizations in public and private sectors. Certain distinctions apply to organizations based on the total number of employees in their workforce and whether they are unionized:

    • Employers with 10 or more employees must establish a pay equity plan
    • Employers with 100 or more employees must additionally establish a pay equity committee
    • Employers with 10-99 employees must establish a pay equity committee if any of the employees are unionized
    • Employers with 10-99 non-unionized employees may voluntarily establish a pay equity committee, but are not required to do so

    Establish a pay equity plan

    Pay equity plans are intended to identify and remedy pay disparities based on gender. The Act requires employers pay equity plans to include the following:

    • Identification of job classes
    • Determination of predominantly female and predominantly male job classes
    • Determination of value of work
    • Calculation of compensation
    • Comparison of compensation

    Notably, the Act broadly defines “compensation” to include salaries, commissions, bonuses, and paid time off; in-kind payments; employer contributions to retirement, long-term disability, and health insurance plans; and any other “advantage” received directly or indirectly from the employer. 

    Create a pay equity committee

    The Canada Pay Equity Act requires employers to form representative pay equity committees that will develop, execute, and maintain the pay equity plans. Specifically, “At least two-thirds of the members must represent the employees to whom the pay equity plan relates.” There are other stipulations for establishing membership – for example, women should compose at least 50% of the pay equity committee.

    Pay equity committees will be responsible for reviewing and updating pay equity plans at least once every five years.

    Built-in accountability

    The work doesn’t end with establishing pay equity plans and committees. The Act includes measures for accountability and maintenance to allow for continuous improvement. These measures require employers to:

    • Post a draft pay equity plan, with an opportunity for employees to comment (Employee feedback must be taken into consideration.)
    • Implement the pay equity plan within three years
    • Increase compensation for the predominantly female job classes that are comparatively underpaid
    • Maintain pay equity and review the pay equity plan at least once every five years
    • Provide certain information/notices to their pay equity committee, employees, and the Pay Equity Commissioner

    Pay Equity Act non-compliance

    The Act penalizes employers that fail to comply. Specifically, Canada’s Pay Equity Commissioner is responsible for enforcing the Act and may impose penalties between $30,000 to $50,000 for violations.

    International efforts foreshadow changes to U.S. legislation

    Canada’s recent action to confront systemic gender-based discrimination may herald change in the U.S. and other countries throughout the world.

    Equal pay is already rising as a top concern in both American legislative board rooms and employee break rooms alike. Last spring, Congress reviewed policies aimed at resolving pay disparities for protected classes. The heads of U.S. labor and employment organizations, including the chair of the Equal Employment Opportunity Commission (EEOC) and the director of the Office of Federal Contractors Compliance Programs (OFCCP), are also making pay equity a focus.

    A diversity, equity, and inclusion (DEI) lens is integral to building a good workplace culture and a reputation as a forward-thinking employer. Simply put, organizations that demonstrate a commitment to DEI aren’t only doing the right thing – they’re also bolstering recruitment efforts and attracting investors.  

    One of the Canada Pay Equity Act’s most prominent focuses is to close the gender wage. Through proactive pay equity measures, U.S. employers too can close the gap and promote workplace equality. With new federal regulations on the horizon, U.S. organizations that approach the social good on their own are setting themselves up for greater success. Best practices include undergoing a comprehensive pay equity audit now. To get started, download our white paper Designing a Successful Pay Equity Program.

    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-tackles-gender-wage-gap/

  • August 03, 2021 12:02 PM | Bill Brewer (Administrator)


    By Robert Sheen | August 3, 2021

    In an effort to address the pay disparity between men and women, the President of Ireland signed the Gender Pay Gap Information Act 2021 into law on Jul. 13, 2021.

    The Gender Pay Gap Information Bill amends the Employment Equality Act 1998 and requires gender pay gap reporting from certain Irish employers. The Act’s goal is to promote pay transparency by requiring certain Irish employers to report and publish information about gender pay gaps within their organizations. It also holds employers accountable by requiring them to explain gaps and what action they’re taking to eliminate or reduce identified wage gaps.

    Below we have outlined this latest international effort to advance pay transparency and what it could mean for the future of the U.S.

    What are the reporting requirements?

    The Act provides that the Minister for Children, Equality, Disability, Integration, and Youth establish regulations as soon as “reasonably practicable” mandating employers to publish a variety of information about the compensation of their employees, including:

    • Mean and median hourly compensation for full-time and part-time male and female employees
    • Mean and median bonus compensation of male and female employees
    • Percentage of all employees who have received a bonus or benefits

    Employers will also be required to explain why gender pay gaps exist and the actions they’re taking to rectify them.

    It’s important to note the Act draws a distinction between the “gender pay gap” and “equal pay for equal work.” While equal pay for equal work has long been codified into Irish law, the new regulations are specific to gender pay gaps, which are defined as the difference in the average hourly wage of men and women across a workforce. Gender pay gaps don’t necessarily mean discrimination is present – but the new reporting system will illuminate where discrimination does exist and require employers to take action to resolve it.

    In addition to reporting requirements, the regulations may determine:

    • The class of employer, employee, and pay to which the regulations apply
    • How the number of employees and pay is to be calculated
    • The form and manner in which information is to be published, along with the frequency of publication (which will not be required more than once per year)

    Which organizations are impacted?

    Private and public sector employers will be affected with the following requirements:

    • Initially, the legislation will only apply to companies with 250+ employees
    • Two years after the start of the Act, the act will expand to include organizations with 150+ employees
    • Three years after the start of the Act, organizations with 50+ employees will need to comply
    • At this time, organizations with less than 50 employees are exempt from the Act’s reporting and disclosure requirements

    When does the law take effect?

    While the law is expected to be fully enacted at the end of this year, the reporting process is expected to begin in 2022.

    How will the law be enforced?

    The Workplace Relations Commission will investigate complaints and follow up with employers accordingly to enforce pay equity in Ireland. Additionally, if “reasonable grounds” are present, the Irish Human Rights And Equality Commission may file an order with the Circuit Court or High Court that would require an employer in question to comply.

    What does this mean for U.S. employers?

    Ireland’s action to amend pay equity legislation is reflective of movements gaining traction around the globe. Canada’s recent passage of its Pay Equity Act is yet another effort aimed at confronting systemic gender-based discrimination. Local efforts to close the gap are also cropping up across the U.S., and federal legislation seems imminent. Already, states like CaliforniaIllinoisRhode Island, and Oregon have passed legislation requiring employers to achieve pay equity through similar transparency efforts. Congress is also actively working to pass legislation to bolster the federal Equal Pay Act.

    U.S. employers should get ahead of the curve by implementing a pay equity policy now. A focus on pay equity isn’t the ethos of the future – it’s already here. To get started, download our white paper Designing a Successful Pay Equity Policy for Your Organization.

    We’re here to help employers take a proactive approach to achieve pay equity in their organizations. Our PayParity Solution provides auditing and ongoing monitoring to help your organization get ahead and minimize risk.

    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-tackles-gender-wage-gap/

  • July 30, 2021 9:20 AM | Bill Brewer (Administrator)

    4 Practices for Developing an Effective Compensation Strategy

    ADVISOR BLOG

     

     AS PUBLISHED IN WORKSPAN WEEKLY

     

     JULY 2021

    COVID-19 and the ensuing pandemic produced the largest global economic shock and business transformation period of our lifetimes. And while there were some companies that benefitted from the situation, for many others, the virus painfully exposed material weaknesses in their business.

    We’ve experienced wholesale changes in how work gets done. For workers who could, there was a  pivot to working from home. (In fact, a recent survey found that the work from home model may become more permanent for many companies. Respondents indicated they expect a third of their total US-based workforces will continue to work remotely.) An interesting lesson here is just how quickly—and seamlessly for many—this pivot was executed; it happened in a fraction of the time most of us would have thought possible.

    As we optimistically put the pandemic in our rearview mirror, company management and their boards continue to meet more frequently than ever to discuss and formulate near-term and long-range business plans. However, with all that we’ve learned over the past year-plus about agility and flexibility, we can’t lose sight of some of the fundamental principles that help businesses achieve ongoing performance. More than ever it is incumbent on compensation committees, leadership teams, and HR professionals to ensure that the links between business strategy, talent management, and compensation strategy and design are meaningful.

    The forced re-evaluation of both vulnerabilities and new opportunities may have been overdue for some companies and an unexpected benefit for others. But in light of those changes, it’s important to take the next step and examine some core compensation questions.

    • Do we have the right executive compensation metrics to drive current, newly evolved business goals and priorities?
    • Are the right leaders in place to support our changing business model or strategies?
    • Given our changing business, how do we create line of sight for all employees?
    • What have we learned from the pandemic about what our employees value?
    • Has the virtual workforce opened up new opportunities for talent acquisition?  

    Just as business as usual was not acceptable in 2020, compensation as usual should not be acceptable going forward. Customer needs have changed, workforce needs have changed, and people and compensation must be realigned to match those new preferences.

    Many companies have re-evaluated the metrics in their incentive programs to ensure alignment with new business goals and strategies. There have been changes to the long-term incentive mix to not only mute the lingering effect of COVID-19, but to also highlight shifting attitudes about the primary objectives and attributes of long-term incentives. And these shifting attitudes aren’t confined to the executive ranks. With growing concern about the availability and needs of the broader talent pool, some high-profile companies have made public announcements regarding permanent work from home models and associated HR and compensation policy changes.

    Bottom line: if your business strategy has changed or is evolving, so should your pay program. Reevaluate your compensation design to ensure it reflects the changes to your business model and business strategies. Every company is inherently different, and compensation and people strategies should reflect that. View these ongoing discussions and deliberations between the board and management through a lens that makes clear the right differences in your pay programs, relative to your competitors, can create a tremendous competitive advantage.

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    Source: Pearl Meyer

    https://www.pearlmeyer.com/blog/revisiting-business-strategy-and-compensation-alignment-in-light-of-covid-19

  • July 29, 2021 8:15 AM | Bill Brewer (Administrator)

    Chef wearing protective face mask preparing a dish in restaurant kitchen

    by Greg Iacurci | PUBLISHED TUE, JUL 27 20211:30 PM EDT, UPDATED TUE, JUL 27 20216:37 PM EDT

    Workers saw their hourly pay in June jump at the fastest clip in more than a decade. Yet some of them saw those gains erased by high levels of inflation.

    “Real wages” — a measure of income after accounting for the cost of goods and services people buy — fell by almost 2%, on average, last month compared with 2020. Senate Republicans said Wednesday that Americans were getting a pay cut as a result.

    “The staples of American life are increasing exponentially,” according to Sen. Tim Scott, R-S.C., who cited examples like higher prices for gas, laundry, airfare, moving costs, hotels, bacon and TVs.

    The thrust of the argument — that inflation eats into rising wages — is true, according to economists. Still, there are many nuances, they said.

    For one, whether a consumer got a pay cut or not depends on their individual earnings and the things they buy.

    “If prices are growing faster than wages, then people are getting inflation-adjusted pay cuts,” according to Michael Strain, director of economic policy studies at the American Enterprise Institute, a right-leaning think tank. “Ultimately, this varies dramatically for every individual.”

    Plus, inflation has been volatile and may prove temporary — meaning a reduction in buying power could be short-lived, economists said.

    Inflation and wage growth

    Average hourly earnings rose 3.6%, to $30.40, in June compared with the same month in 2020. That’s the biggest spike since January 2009, according to data compiled by the Economic Policy Institute.

    Meanwhile, the consumer price index, a measure of inflation, jumped 5.4% over the same period — the most since August 2008.

    Together, this amounts to a 1.7% loss in buying power, on average, when factoring in seasonal adjustments, according to the Bureau of Labor Statistics. 

    “Inflation is a tax,” said William Foster, a vice president at Moody’s Investors Service. “That’s the best way to think about it.”

    Inflation most impacts lower earners, who spend more of their average dollar on gas, food and other items that may be rising in price, Foster said. Wealthier individuals, who tend to hold more financial assets like stocks or homes, may be better able to offset the impact of inflation, he added.

    But not everyone necessarily got a pay cut as a result. The 5.4% jump in annual inflation is an average of many items — and households aren’t necessarily buying the ones that are getting much costlier.

    For example, the metric includes prices for used cars and trucks, which are up about 45% from June 2020 — their largest change on record. That price shock wouldn’t hit someone’s wallet unless they bought a used car.

    Similarly, gasoline prices are up 45%. That extra cost would be borne by drivers, though perhaps not city residents who ride public transit.

    By comparison, food prices are up just 2.4% over the same time, lower than the broader inflation measure.

    Consumer behavior

    The consumer price index also doesn’t account for shifts in the behavior of consumers, who may change what they buy to avoid these higher costs.

    For example, one might switch to chicken from beef to save money, or delay buying a car until prices fall.

    “People respond to price changes by shifting their consumption,” according to Noah Williams, an economics professor at the University of Wisconsin-Madison and an adjunct fellow at the Manhattan Institute.

    The personal consumption expenditures price index, another measure of inflation, accounts for these shifts. The Bureau of Economic Analysis hasn’t yet issued the figure for June. But in May, the PCE index was 1.1 percentage points lower than the consumer price index annual reading (3.9% versus 5%) — which indicates consumers bought lower-cost goods.

    However, these shifts still impose a cost on consumers, if not an explicit one, according to Casey Mulligan, an economics professor at the University of Chicago.

    “They’re trying to minimize the evils, but they’re both evils,” said Mulligan, who served as chief economist of the White House Council of Economic Advisers during the Trump administration.

    Distortions

    There’s also reason to be wary of overinterpreting inflation and wage figures as the U.S. economy rebounds from the Covid-19 pandemic, according to economists.

    That’s due to economic distortions caused by the virus. For example, consumer prices fell early in the pandemic. Comparing prices today to lower prices a year ago will naturally cause inflation readings to seem high.

    Similarly, wage data may be skewed by a disproportionate number of layoffs among low-wage workers during the pandemic. In April 2020, for example, average hourly earnings jumped 8% (the highest on record) even amid mass layoffs, since more high earners remained in the workforce.

    The same may be happening now, but in reverse. As the economy rebounds and lower-wage workers are rehired, average earnings may appear suppressed.

    “It could be a little misleading” to suggest workers are getting a pay cut, according to Susan Houseman, research director at the W.E. Upjohn Institute for Employment Research.

    ″[The composition of the workforce] is especially changing during downturns and recoveries, so one has to be careful about interpreting these data,” she said.

    Temporary or not?

    It’s unclear whether higher consumer prices and wages are temporary or longer-lasting, according to economists.

    However, at least some of the inflation can be explained by likely short-term dynamics, like supply constraints and a surge in demand as consumers emerge from a pandemic-induced hibernation, they said.

    For example, high recent gas prices were caused partly because major oil-producing nations couldn’t reach agreement to raise oil supply in early July, according to AAA. And a shortage of microchips has led to a spike in car prices.

    Some expect inflation to persist, though.

    “Inflation is not going to be transitory,” Mohammed El-Erian, the chief economic adviser at Allianz SE, told Bloomberg TV on Friday. “I have a whole list of companies that have announced price increases, that have told us they expect further price increases, and that they expect them to stick,” he added.

    Wages seem to have increased in recent months amid rising demand for workers, according to the Labor Department. Increased pay may be longer-lasting than high inflation, since businesses often don’t cut pay after raising it, Houseman said.

    “We typically don’t give people wage cuts,” she said. “Employers typically don’t do that.

    “So in that sense, they’re stickier.”

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    Source: MSNBC

    https://www.cnbc.com/2021/07/27/wages-are-rising-but-has-inflation-given-workers-a-2percent-pay-cut.html

  • July 27, 2021 8:40 AM | Bill Brewer (Administrator)

    Chipotle, Chobani, Verizon Among Companies Committing to Financial Health of US Workforce - Sustainable Brands

    PUBLISHED July 2021

    Member companies will assess the financial security and health of their employees as part of a new effort to address the economic hardships of workers.

    ChipotleChobaniEvenPrudential FinancialVerizon and other leading companies have joined PayPal and JUST Capital in the Worker Financial Wellness Initiative — a coalition aimed at making workers’ financial security and health a C-suite and investor priority. The initiative elevates worker financial wellbeing to a top priority as business leaders consider solutions to shape a sustainable and inclusive recovery from the COVID-19 pandemic and take action for racial equity.

    Research shows that improving workers’ financial wellness benefits not only workers themselves, but also business outcomes including productivity, innovation, customer satisfaction, and employee turnover and engagement. The Worker Financial Wellness Initiative joins those from a growing number of corporate heavyweights (including AppleStarbucksEVERFILinkedInMicrosoftMastercard and Visa, to name a few) that have turned their attention to improving worker inclusivity and wellbeing — particularly for minorities and women, who have been disproportionately impacted during the pandemic.

    PayPal and JUST Capital launched the Worker Financial Wellness Initiative in October 2020, in collaboration with Financial Health Network and Good Jobs Institute. Companies joining the initiative commit to conducting a financial wellness assessment of their workforce to understand their financial vulnerability and identify opportunities to improve their resilience over the long term. Specifically, these companies will complete at least one assessment within a 12-month period, such as an employer-provided benefits assessment, an employee survey, or a living wage assessment.

    “If we are going to deliver on the promise of stakeholder capitalism, we need to help more corporate leaders and investors understand that employees are a company’s most valuable asset, and that investing in their well-being will drive long-term financial success,” said JUST Capital CEO Martin Whittaker. “Through the Worker Financial Wellness Initiative, we’ll continue to build the growing body of evidence demonstrating the connection between the financial security of a company’s workforce and their overall business performance, and refute the anachronistic Wall Street narrative that raising wages destroys value.”

    PayPal conducted an assessment on the financial wellness of its hourly and entry-level workforce in 2018 and found that many employees were struggling to pay their bills each month despite market pay alignment. The findings propelled the company to institute several changes to improve its employees’ financial well-being, including lowering the cost of healthcare benefits, making every employee a stockholder, raising wages where appropriate, and offering new financial coaching programs. Since implementing these changes, the company has helped raise the minimum PayPal-defined estimated net disposable income for hourly and entry-level workers in the U.S. to at least 18 percent, making significant progress to reaching its target of 20 percent for all employees globally.

    “At Chipotle, we believe in investing in the overall wellness of our employees by offering robust benefits that address physical, mental and financial health,” said chairman and CEO Brian Niccol. “Being a founding company in the Worker Financial Wellness Initiative demonstrates our commitment to being an industry leader and ensuring that we’re truly assessing the comprehensive needs of our workforce. Joining forces with other leading organizations and using our collective voices will shed greater visibility on this important matter — impacting not only our individual companies, but potentially the economy as a whole.”

    Participants in the initiative will have access to a wealth of resources — including quarterly webinars highlighting company best practices, and guidance on developing and deploying financial wellness assessments. Companies interested in more specialized tools and resources can receive tailored recommendations from initiative partners based on their assessment results, as well as enhanced peer learning workshops for HR teams. The partner organizations will also continue to share case studies, business case analysis and best-practice insights to help educate, inform and catalyze the wider business community.

    With the first cohort representing approximately 260,000 US workers across a range of industries, the program presents a unique opportunity to demonstrate what companies can accomplish when they come together with a shared goal of improving the financial health and resilience of workers across the nation.

    "It's no secret that it is getting harder to recruit and retain talent at all levels, especially with hourly employees," said Jon Schlossberg, co-founder and executive chairman with on-demand pay platform Even — which PayPal recently enlisted to help it improve the financial health of its own workforce. “During a time where keeping a productive and loyal workforce is crucial, Even provides employees with the tools they need to improve their financial health; and in return employers are rewarded with a more productive, engaged and loyal workforce. We're proud to be part of this initiative and look forward to partnering with this coalition to raise the importance for all employers to play an active role in the financial health of their workforce."

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    Source: Sustainable Brands

    https://sustainablebrands.com/read/finance-investment/chipotle-chobani-verizon-among-companies-committing-to-financial-health-of-us-workforce

  • July 27, 2021 8:36 AM | Bill Brewer (Administrator)


    The move has paid off in staffing retention that's "as good or better" than it was before the pandemic.

    Published July 26, 2021 | Jane Thier 

    Commodity shortages and price increases will mostly cancel out a 3.5% to 4% menu price hike Chipotle Mexican Grill announced in May to pay for higher employee wages, the company's CFO, Jack Hartung, told analysts this week. 

    Even with the price of ingredients rising, the company stands by its decision to raise the average wage to $15 by June, which Hartung called "a very bold move" that has paid off in staffing retention that's "as good or better" than it was before the pandemic. 

    Chipotle reported $188 million in quarterly net income, compared with $8.2 million the same quarter last year, and a 24.5% operating margin, a twofold year-over-year jump, and its highest quarterly gain since 2015.

    "There is so much going on right now with inflation, and the question about whether inflation is transitory or permanent," Hartung said. "And now [with] the Delta variant, there's a lot of unknowns, so we don’t want to declare, with certainty, what we’ll do between now and the end of the year."

    Consumers have been "really, really good" with the elevated menu prices, Hartung said. "We’re really seeing no resistance whatsoever." As for pricing decisions going forward, "let's see what happens to inflation and the economy over the next several months, and we'll make the appropriate decisions at the appropriate time."

    The brand maintains pricing power and significant upward mobility on its margins, Hartung added. "Now, it's just a matter of how and when we decide to use that pricing power to either protect margins or to invest in our people, like we just did with the wages." 

    Digital sales, which account for nearly 50% of Chipotle’s business, grew 10.5% even as dining rooms reopened, and it opened 56 new restaurants, 45 of which include a Chipotlane drive-thru. Locations with Chipotlanes have 20% higher sales than those without, Hartung said. 

    "What we had hoped would happen is happening—we’re holding onto these digital transactions while people’s previous habits are returning when they feel comfortable going out and about," he said.

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    Source: HR Dive

    https://www.hrdive.com/news/chipotle-cfo-higher-wages-preventing-staff-shortages/603892/

  • July 09, 2021 2:47 PM | Bill Brewer (Administrator)


    Workers are trading jobs, enticed by the guarantee of flexible schedules and continued work from home

    By Chip Cutter  and Kathryn Dill | Updated June 26, 2021 12:01 am ET

    After almost a year and a half of working from home, many white-collar employees say they are not willing to return to corporate offices full-time. Even whispers of returning have been enough to send some professionals searching for an exit—and plenty of bosses are welcoming them to new jobs with the promise they can work remotely, at least most of the time.

    The push for flexibility is adding to the wave of resignations rippling through the U.S., recruiters say, and motivating many employers to re-evaluate their work-from-home policies. Canadian video-software firm Vidyard says it has seen a steep increase in job applications in recent months after emphasizing that roles can be performed mostly at home. And at Allstate Corp. , conversations about every new position now begin with the question: “Why can’t this be done remotely?” says Carrie Blair, the insurance giant’s chief human-resources officer. “It’s a big workforce shift for us.”

    Hardly anyone will return to Allstate’s offices full time, Ms. Blair says, after employees expressed in surveys that they didn’t want to and the company found most functions don’t require an office setting. Allstate recently decided 75% of roles can be performed remotely, and another 24% can be done on a hybrid basis, with workers splitting time between home and the office. The 1% who will go back to a pre-Covid-style office setting include some top executives and certain people in field offices with customer-facing roles.

    “Remote is going to be the new signing bonus,” he says. “Instead of dangling, ‘We’ll give you $10,000 if you sign for this job,’ it’ll be: ‘Instead of having to commute 35 minutes every day, go to work, and get in your car and drive 35 minutes home, you can work from your home office all the time.’ ”

    Matt Croak, a 27-year-old software engineer in New York City, wasn’t actively looking for a new job earlier this year, but believed his consulting-firm employer could begin reopening its offices this summer in a hybrid capacity. So, when a recruiter reached out in April about an engineering role at an e-commerce company that would allow him to continue working fully from home, he pursued it. The job comes with higher pay and the chance to learn new skills, but it will also allow him to spend mornings reading in his living room in Brooklyn, instead of hunched over a subway seat while commuting 45 minutes into Manhattan. Mr. Croak says that, over the past 16 months, he has had more personal time for meditation and other self care—activities he wasn’t ready to give up in order to rush back and forth to and from an office again.

    “I do really want to work from home permanently,” he says.

    Minaya, a 26-year-old tech-company employee, calls remote work ‘the arrangement that I want to keep.’PHOTO: JOVELLE TAMAYO FOR THE WALL STREET JOURNAL

    Marc Cenedella, founder and chief executive of Ladders, a job-search site for roles that pay north of $100,000 a year, says greater flexibility is shaping up as a perk that companies can wield to poach talented people.

    “Remote is going to be the new signing bonus,” he says. “Instead of dangling, ‘We’ll give you $10,000 if you sign for this job,’ it’ll be: ‘Instead of having to commute 35 minutes every day, go to work, and get in your car and drive 35 minutes home, you can work from your home office all the time.’ ”

    Matt Croak, a 27-year-old software engineer in New York City, wasn’t actively looking for a new job earlier this year, but believed his consulting-firm employer could begin reopening its offices this summer in a hybrid capacity. So, when a recruiter reached out in April about an engineering role at an e-commerce company that would allow him to continue working fully from home, he pursued it. The job comes with higher pay and the chance to learn new skills, but it will also allow him to spend mornings reading in his living room in Brooklyn, instead of hunched over a subway seat while commuting 45 minutes into Manhattan. Mr. Croak says that, over the past 16 months, he has had more personal time for meditation and other self care—activities he wasn’t ready to give up in order to rush back and forth to and from an office again.

    “I do really want to work from home permanently,” he says.

    More American workers are quitting their jobs than at any time in at least 20 years, according to the Labor Department. One factor behind the trend, executives say, is that more employers are outlining their return-to-office plans in detail, giving employees a clearer sense of what to expect next. Apple Inc. recently said it wants most office workers to show up Mondays, Tuesdays and Thursdays, with the option to work remotely on Wednesdays and Fridays. Other companies, such as Pontiac, Mich.-based United Wholesale Mortgage, are recalling thousands of employees to a corporate campus in the coming weeks, with a goal of getting close to 100% of workers back and resuming a traditional five-day workweek, according to the company’s chief executive, Mat Ishbia.

    “You see tons of bold statements. Companies saying, ‘No remote work.’ Some companies are saying, ‘We’re getting rid of all of our offices,’ ” says Bret Taylor, president and chief operating officer of Salesforce.com Inc. In many cases, it is the employees who are primarily calling the shots. “There’s like a free market of the future of work and employees are choosing which path that they want to go on.”

    In a recent survey of 2,000 workers commissioned by Prudential Financial Inc., a quarter of respondents said they planned to look for a new job post-pandemic, with many of those planning to leave citing work-life balance issues as among their top concerns. Half of respondents reported feeling that the pandemic had given them more control in deciding the direction of their careers.

    Jeff Simonds, a 38-year-old who lives in Burlington, Vt., began a new remote job this past week as a search-engine optimization manager at Updater Inc., a New York-based tech company that makes software designed to help with logistical challenges when people relocate. Before the pandemic, Mr. Simonds worked in an office and says he never would have considered doing otherwise.

    Over the past year, he says he appreciated being able to throw in a load of laundry during the workday, or to begin his day from home earlier so that he could squeeze in a round of golf in the late afternoon, with his work completed. The new role came with a raise, and he says he considers the ability to work remotely as a kind of bonus. “It’s the freedom to kind of define my own workday,” he says.

    His prior company, which provides marketing services and tools for auto dealers, had tentatively discussed returning to the office in September, Mr. Simonds says.

    “Knowing that there was somewhat of a looming deadline of life back in the office” helped to inform the career move, Mr. Simonds says, adding that he was primarily drawn to his new employer’s growth prospects and the chance to help shape a new team. “I didn’t hate the office life, but I’m very accustomed to this now.”

    Though a number of companies are still calling workers back to offices, some bosses realize policies must shift to remain competitive. At First Advantage Corp. , an Atlanta technology company that employs more than 3,500 people and had its initial public offering this week, CEO Scott Staples says the company plans to reopen its offices in phases over the coming months. Some employees, particularly those in technology roles, will likely be able to spend more time working remotely.

    “I think CEOs of the future just have to have a lot more flexibility on policies and procedures. It’s the only way you’re going to grow and survive,” Mr. Staples says. “There are certain roles where if a person doesn’t want to come back in for a variety of reasons, we can accommodate that, and I think that will make us an attractive employer.”

    Technology giant Adobe Inc. said this week that its roughly 23,000 employees could spend 50% of their time at home once U.S. offices begin reopening in July, but also said that remote-work arrangements would expand for those who desire them.

    “Our default work arrangement going forward for employees is to be flexible,” says Gloria Chen, the company’s head of human resources. Adobe won’t mandate which days employees go into offices or track how much time they spend in them. “Flexibility means flexibility,” she says.

    Last fall, as Amy Culver’s employer began discussing plans to eventually return to the office, she found herself filled with dread. Without her typical 40-to-60-minute commute, Ms. Culver, a marketing copywriter, had more time to spend with her daughters, 11 and 16. She was able to continue horseback riding, her postwork outlet, even as the winter sun set earlier. Previously, she and her husband, who works irregular hours, might go several days each week without seeing each other. Working from home outside Richmond, Va., eliminated that issue, she says, and made it easier to spend time together as a family.

    “I felt like I had a handle on everything for the first time in a long time,” says Ms. Culver, who is 43.

    Though her manager told her she could continue to work from home even after the office in Richmond reopened, Ms. Culver worried about scrutiny and whether she’d be treated as a second-class citizen in the company, losing out on opportunities if she stayed in her basement workspace while co-workers returned. She began applying for jobs at companies that allow most employees to work remotely, and quickly had an offer that appealed to her. In November she started at When I Work, an employee-scheduling software company.

    Today Ms. Culver typically works from 10 a.m. to 6 p.m., but says she has the autonomy to take her daughter to driver’s ed class in the middle of the day or return to a project later in the evening when she feels creative.

    “Now that I work for a remote-first company, we’re all in the same boat. I’m not concerned that’s going to hold me back at all,” she said. “I’m on a team, but I still get to work from home, and I feel like that’s the best of both worlds.”

    Other employees have chosen companies with defined remote-work cultures. Pallavi Daliparthi, a 36-year-old who lives outside Austin, Texas, took a job in May with GitLab Inc., a fully remote company that sells tools for software developers. Ms. Daliparthi, now a senior manager on GitLab’s sales team, had previously worked remotely at a large enterprise-technology company, and knew that in a hybrid environment, decisions could be made over coffee in the office that she may have missed while at home. “Whereas here, everybody really is remote,” Ms. Daliparthi says. “You know there’s nothing happening in the background, in-person somewhere.”

    A lot of people say they hope to stay remote for years to come. Brandon Minaya, a 26-year-old tech-company employee, moved to a neighborhood in Seattle late last year that has few links to public transportation, anticipating that he would no longer be commuting to an office in future roles. In March, he took a fully remote client-facing position with Intellum, an Atlanta-based company that makes education software.

    Instead of taking an hourlong bus ride each way to a WeWork location, as he did in a previous role, Mr. Minaya says he often starts his mornings walking to a nearby beach, where he looks for seals and birds. Most mornings, he takes the time to brew himself a pour-over coffee, something he once reserved for weekends.

    While searching for a new job, he prized companies that seemed committed to remote work. “I wanted to find somewhere where this isn’t something that’s going to be pulled back in six months,” he says. “Like: ‘Just kidding!’ ”

    He has the flexibility to meet with colleagues in person, or to travel to the company’s Atlanta headquarters, he says. But “the fact that it’s not expected of me is kind of the arrangement that I want to keep.”

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    Source: The Wall Street Journal 

    https://www.wsj.com/articles/remote-work-is-the-new-signing-bonus-11624680029

  • June 25, 2021 3:51 PM | Bill Brewer (Administrator)

    Man (early 30s) working in home office

    PUBLISHED FRI, JUN 25 20218:30 AM EDT by Greg Iacurci

    KEY POINTS

    • Workers are increasingly getting enrolled into their company 401(k) plans automatically, often into target-date funds that shift the stock-bond mix over time.
    • About 60% of 401(k) plans used auto-enrollment in 2019, up from 42% a decade earlier, according to the Plan Sponsor Council of America.

    Americans saving in a 401(k) plan may have money stashed in a robo-advisor — and they might not even know it.

    Robo-advice is basically professional money management guided by an algorithm (a robot, so to speak), largely allowing investors to be hands-off.

    Companies offering a retirement benefit are increasingly enrolling employees into 401(k) plans automatically. Most are diverted to some type of robo-advisor.

    About 60% of 401(k) plans used auto-enrollment in 2019, up from 42% a decade earlier, according to the Plan Sponsor Council of America. Doing so helps overcome inertia that may prevent a person from saving.

    “You get the momentum going,” Keith Gredys, chairman and CEO of The Kidder Company in Clive, Iowa, who works with 401(k) plans and investors, said of automatic enrollment. ”[Employees] go in and tend not to come out.”

    TDFs and managed accounts

    About 66% of 401(k) plans guide those automatic savings into target-date funds, according to the Council, a trade group representing businesses that offer retirement plans.

    TDFs are perhaps the simplest version of a robo-advisor — they automatically toggle savings from aggressive (lots of stocks) to conservative (lots of cash and bonds) according to an investor’s planned age of retirement.

    About 5% of 401(k) plans default funds into a “managed account.” In such accounts, algorithms choose one’s asset allocation based on factors beyond just age, such as income, savings rate, employer contributions and amount of non-401(k) savings.

    Employers must notify workers that they are being automatically enrolled in a 401(k). But those who don’t pay close attention may not know part of their paycheck is getting invested a robo-advisor.

    Robo-advisors have come into vogue over the past 15 years or so, leveraging investor demand for ease and lower-cost investing.  

    About 80% of 401(k) plans offer target-date funds, for example, up from 64% a decade ago, according to the Plan Sponsor Council of America.

    “Most people are terrible investors,” said Philip Chao, a certified financial planner and chief investment officer at Experiential Wealth, based in Cabin John, Maryland.

    “They’re diversified [and] professionally managed,” Chao said of target-date funds and managed accounts. “So you don’t have to go find an advisor; it’s done for you.

    “And they’re easy to understand, so they become very popular.”

    There’s also a legal rationale for employers to automatically guide funds into such investments — the Pension Protection Act of 2006 offered additional protections to do so.

    However, Chao doesn’t consider target-date funds to technically be advisors since they only tailor asset allocation (the mix of stocks and bonds) based on the year in which someone plans to retire.

    Managed accounts, on the other hand, are more tailored to the specific individual since their asset allocations are based on other data points.

    But managed accounts are also typically more expensive — and that may pose a problem for investors who are automatically enrolled, according to Chao.

    Managed accounts often rely on investors to input specific data points (like amount of non-401[k] savings) to guide their investment mix. But those inputs are unlikely to occur without investor engagement, as is more apt to occur after automatic enrollment — potentially negating the additional cost.

    “You shouldn’t blindly let your money get defaulted,” Chao said. “You should know the cost.

    “And you should make sure employer has done their job to controlling expenses.”

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    Source: CNBC

    https://www.cnbc.com/2021/06/25/401k-investors-may-be-using-a-robo-advisor-and-not-even-know-it.html

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