ByDawn Kawamoto

May 20, 2024

Nearly 72% of Americans live paycheck to paycheck, with less than $2,000 in savings. And Amazon employees are among them. 

About five years ago, Amazon started surveying workers about their financial health and the benefits they would find most useful—which painted a picture of financial stress among employees, says Justin Roberts, senior manager of financial benefits at Amazon.

To address this, Amazon created a global financial health team in 2022, says Roberts, who recently spoke on a panel, The Role of Financial Care for Employee Health, Wellbeing and a Thriving Workforce, at the Elevate Change, Ignite People (EPIC) conference in Las Vegas.

The financial health team is comprised of 12 full-time employees and contractors, as well as dozens of specialists on partner teams who work on various aspects of Amazon’s financial health benefits, from payroll to technology. This team is part of Amazon’s global financial and wellbeing benefits organization, which is part of the HR department. 

Amazon’s HR leaders are not alone in wanting to help employees address their financial woes, which can lead to stress-induced health problems and deteriorated mental health, and, for employers, a loss in productivity and increased attrition. It’s a focus being accelerated by ongoing economic uncertainty. For the first time, last year, employers ranked the high cost of living as a top financial wellness concern over retirement preparedness, according to an Employee Benefit Research Institute report.

How Amazon created its financial health program

Prior to the start of the pandemic, Amazon began talking to employees and conducting employee surveys regarding their financial wellness concerns. Roberts said understanding such needs is key to any successful financial wellness strategy.   

“It all starts with talking to your employee base and asking them what they want. What do they need from a financial perspective?” Roberts said. “A lot of times, they don’t know what they want until they are provided with some options. Once they see the options, they know clearly what they want to extract from them.”

After gathering data for more than a year, Amazon “saw the financial stress metrics that we have are fairly high,” Roberts said, which prompted the company to create a financial health team in 2022.

The team realized it needed to first sharply focus on helping employees manage short-term financial wellness, like financial emergencies—more so than prepare for long-term financial goals like retirement planning, Roberts said. 

“Whenever somebody is hurt on the battlefield, the first step is to stop the bleeding,” says Roberts, a former Marine. “So, whenever we started to look for financial wellness solutions for our frontline employees, it was to stop the bleeding. What can we do for them in cases of emergencies? What do we need to do to take care of that first? Then we can later build on that.”

When Amazon’s financial health team learns of a U.S. employee facing a financial emergency, it directs that employee to its financial care solutions partner Brightside. That partner works with employees to find emergency housing, arranges food and grocery delivery, and connects them to appropriate community and government support services.

After tackling these immediate needs, Brightside and Amazon’s financial health team seek to build a strong financial foundation by working with affected employees to create a savings plan, rebuild their credit rating and eventually tack on retirement savings, Roberts said. 

Roberts offered several tips for selecting a financial wellness partner. Seek a partner that receives all of its funding from its clients rather than a combination of clients and vendors whose products may be used in providing service to the organization. 

“You don’t want a vendor to get paid more to pitch an annuity versus a different savings vehicle. You could then find there’s a propensity to select a resource that may not be in the best interest of employees,” Roberts said. 

Amazon also wanted a partner that would not limit the amount of time employees could spend with a financial wellness representative. Brightside was also asked to ensure employees meet with the same financial representative whenever they need help to build on their existing relationship.

Amazon’s financial wellness ROI

Amazon measures its financial wellness return on investment through two lenses—impact on its employees and its business.

Since launching its financial health team and partnership with Brightside, Amazon has seen improvements in its employees’ savings rates, the number of dollars going back to employees—as they budget better and even set aside money for retirement funds—and the value they receive from the program.

“We’re looking at a 3x value,” Roberts said. “For every dollar we put into the program, the employee gets about $3 worth of value.”

Roberts said employees also rate Amazon’s financial wellness program with a 90 NPS score, adding, “It’s insanely high.”

Although Amazon’s overall employee base rates its financial wellness program high, financial woes persist among the online retailing giant’s warehouse workers, highlighting the scope of the challenge.

For example, 53% of 1,484 Amazon warehouse workers across the U.S. say they have experienced one or more forms of food insecurity in the past three months, and 48% of these workers face housing insecurity, according to a report released Wednesday by the Center for Urban Economic Development at the University of Illinois Chicago. 

Additionally, 56% of warehouse workers are not able to pay all their bills, and 33% use one or more publicly funded assistance programs.

As Amazon seeks to improve further the lives of its employees, including its warehouse workers, the company is leaning into the benefits its financial health program is yielding. Roberts said the company believes it’s seeing greater productivity from workers, less attrition and safer workplaces—since workers are less distracted by financial problems. The program has been so successful that Amazon is expanding its geographic footprint for the program from one region in the U.S. to nationwide.  

Common mistakes to avoid when creating a financial wellness program

Despite the potential of a financial health program, there are some common mistakes HR can make in crafting such an initiative, Roberts said.

Moving mountains quickly

“The biggest mistake is trying to do too much, too fast,” Roberts says. However, he noted that most decisions regarding financial health programs are two-way doors, where HR leaders need to be able to pivot and change plans.

Failing to know your employee base

HR leaders can fall into a herd mentality that can hurt their financial wellness program, Roberts observed.

“I often see some of my peers out there who will see what someone else is doing and say, ‘That’s great. I want to do that.’ They may start an emergency savings account program without understanding what their employees need. If it’s a hospital, maybe your nurses need student loan benefits before getting an emergency savings account,” he said.

Missing the mark on what to measure for program success

HR needs to know exactly what its financial wellness program is built to do and the desired outcomes and metrics to hit. Without measurable goals, merely having employees engaged in the financial wellness program does not equate to success, Roberts says.

“We know we want to provide X number of value per family and we hold ourselves accountable to that,” Roberts said. “If you have a performance-driven leader, you’ll get to the place you want to go.”

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Source: Human Resource Executive 

https://hrexecutive.com/how-amazons-employee-financial-wellness-program-is-making-a-difference/

Bank increases paid leave to up to 24 weeks for birth parents

Published Wed, Jun 5, 2024 · 12:12 AM

CITIGROUP is increasing the time-off allowance for new parents in the US and introducing leave for staff to care for ailing family members, bringing it more in line with Wall Street rivals as they fight to attract and retain talent.

Under the expanded policy, all new parents in the US and Puerto Rico will receive 16 weeks of paid leave, including those who adopted or had children through surrogacy, according to an internal memo seen by Bloomberg News. Birth parents will receive an additional paid recovery time of as much as eight weeks, reaching a potential total of 24 weeks.

In addition, Citigroup will now allow colleagues two weeks of paid leave annually to care for an immediate family member who’s seriously ill and incapable of self-care. Previously, it offered only unpaid leave. Some rivals already offer as much as four weeks of paid leave for that purpose.

While the new family-leave allowances help make the firm even more competitive with US peers, they’re less than policies in other parts of the world, bolstered by stronger cultural demands for parental leave as well as statutory mandates. In the UK, Citigroup employees are entitled to 26 weeks’ leave at base pay and more time at a lower-paid or unpaid status.

In India, where women comprise less than a quarter of the work force, banks have expanded their policies for female employees in a race to hire more. HSBC Holdings pays for bankers’ nannies in the country, while Citigroup allows new mothers to work from home for a year after their maternity leave ends. 

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Source: The Business Times

https://www.businesstimes.com.sg/companies-markets/banking-finance/citi-boosts-us-parental-leave-compete-wall-street-rivals

March 20, 2024 09:00 ET | Source: Payscale

• Pay transparency is officially a best practice as the majority of organizations (60%) now publish salary ranges in job ads, up 15% over last year.
• More organizations are ditching degree requirements and embracing skills-based hiring strategies.
• Compensation is considered the biggest challenge facing organizations in 2024, ahead of recruiting, retention, and engagement.
  

SEATTLE, March 20, 2024 (GLOBE NEWSWIRE) -- Today, Payscale Inc., the leading provider of compensation data, software and services, released its flagship report, the 2024 Compensation Best Practices Report (CBPR). Now in its 15th year, data and insights from the company’s annual survey of compensation professionals and HR leaders are distilled into the largest report of its kind, revealing the latest workplace and compensation trends in the wake of high inflation, pay transparency legislation, and slowed economic growth.

“This year’s report tells us that while the economy may be in flux, employee expectations have not swayed. Transparent pay practices and meaningful raises are now table stakes to attract and retain top talent, but many organizations are falling behind as legislation is only accelerating,” said Payscale’s Chief People Officer Lexi Clarke. “Half of employers don’t yet have a compensation strategy or pay communications in place, but employee engagement hinges on workers understanding the ‘what’ and ‘why’ behind their pay.”

Key takeaways from CBPR include:

Pay Increases and the Job Market: Competitive raises that exceed inflation are a priority, even in a sluggish economy — but fewer organizations are planning to hand them out.

• Organizations predict an average base pay increase of 4.5% in 2024, compared to the average of 4.8% actually given last year. This increases to as high as 6% for some industries.
• This year, only 79% of organizations plan to give pay increases, which is a drop from 86% in 2023, and the lowest it has been in years. However, 14% are unsure, which means this could end up looking similar to last year.
• Reported voluntary turnover is 21% in 2023, down 4% from 2022 (25%) and much lower than 2021 (36%) — evidence that it’s an employer’s market, at least temporarily.
  

Pay Transparency and Fair Pay: Posting pay ranges in job ads is now the norm, prompting underpaid employees to resign — yet some employers are still gambling with unaddressed pay inequities.

• The majority of organizations (60%) are publishing pay ranges in job postings in 2024, compared to 45% in 2023. However, there has also been a slight uptick in organizations resisting pay transparency (from 11% to 13%).
• In response to pay transparency, 27% of organizations say employees are asking more questions about their pay, 14% have had employees quit because they saw job ads with higher pay elsewhere, and 11% have had employees see an internal job posting for a similar role and realize they were being paid less. More encouragingly, 14% say that employees have expressed appreciation for transparent pay practices.
• Pay equity analysis is a planned or current initiative for 62% of organizations — but over a quarter (27%) admit they do not address severely underpaid employees unless the employee or their manager asks.
  

Compensation Strategy and Pay Communications: While progress has been made, almost half of organizations need to get serious about strategic compensation management.

• HR leaders rank compensation as their biggest challenge this year (50%), over recruiting (44%), retention (42%), and engagement (37%).
• While only 53% of organizations have a formal compensation strategy in place, 21% are planning to build a compensation strategy for the first time in 2024.
• Only half of organizations (51%) train managers on how to have pay conversations with employees, which is still a first-time majority in 2024.
  

AI Adoption: Although forms of artificial intelligence (AI) have been used reliably for years in compensation, organizations are approaching the technology with caution.

• Almost half of HR leaders and compensation professionals (49%) are optimistic about AI; most (63%) believe that AI will reduce unfulfilling work. Meanwhile, 17% are pessimistic; their top concern (56%) is that AI will extend bias rather than mitigate it.
• The practical application of using AI for compensation decisions is viewed more cautiously by organizations, with only 7% of respondents being totally on board and 50% undecided.
• Currently, 21% of organizations are using or developing AI for managing or generating job descriptions, 18% to parse resumes and identify candidates, and 17% to create or support learning and development or standard HR documents.
  

Remote Work and Skills-based Pay: Modern approaches to work, like valuing skills over degrees or productivity over office mandates, are paying off for forward-thinking companies.

• One in three organizations (34%) have removed degree requirements for salaried positions. Overall, only a minority (22%) still require a college degree for all salaried positions in 2024.
• The majority of organizations (58%) compensate for competitive skills.
• While only 11% of employers offer a fully remote work environment (unchanged from last year), the voluntary turnover rate for remote companies is 13%, compared to 30% for traditional in-person work, 23% for work environments split by job type, and 16% for hybrid.
  

Labor Unions and the Minimum Wage: Worker rights will continue to be a major focus in 2024, as employees continue to organize and pay floors increase in almost half of states.

• HR leaders view unions significantly more positively (62%) compared to executives (38%).
• Almost a quarter (22%) of employers bargain with a union, with 18% having done so for many years and 4% just in the last few years. While not a large number, the 4% includes organizations of all sizes and industries.
• Minimum wage increases will impact compensation strategy for 27% of organizations.
• Almost three-quarters (73%) of employers are in favor of raising the federal minimum wage.

“Fair pay is the bedrock of compensation strategy, yet alarmingly, more than a quarter of employers are not proactive about correcting pay disparities,” said Ruth Thomas, pay equity strategist at Payscale. “We’re seeing forward-thinking companies, on the other hand, make adjustments for external and internal pay equity, pay compression, and competitive skills — while diversifying their workforce by removing barriers to entry like degree requirements.”

Payscale’s 2024 Compensation Best Practices Report analyzes survey data from 5,735 respondents gathered between October 2023 and December 2023. Nearly 100 pages long, the report includes cuts of the data across organization size, performance, industry, and location. The full report and its methodology can be accessed in its entirety at Payscale.com/research-and-insights/CBPR.

About Payscale
As the industry leader in compensation management, Payscale is on a mission to help job seekers, employees, and businesses get pay right and to make sustainable fair pay a reality. Empowering more than 50% of the Fortune 500 in 198 countries, Payscale provides a combination of diverse and dynamic data sources, experienced compensation services, and scalable software to enable organizations such as Angel City Football Club, Target, Gainsight, and eBay to make fair and appropriate pay decisions.

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Source: GlobeNewswire

https://www.globenewswire.com/news-release/2024/03/20/2849394/0/en/Worker-Expectations-Clash-with-Economic-Realities-Payscale-s-2024-Compensation-Best-Practices-Report-Reveals.html

Survey: Pay structures are changing to suit equity, transparency needs

Organizations have become more transparent about pay, according to Payscale, but generally only disclose data to individual employees and only when required to do so.

Published June 6, 2024

Traditional pay grades remained the most common form of pay structure for organizations entering 2024, but many were considering market-based pay ranges — segmented either by individual jobs or by groups of comparable jobs — to meet equity and transparency goals, according to a recent Payscale report.

The vendor’s late 2023 survey of more than 5,700 compensation professionals, most of them from the U.S. and Canada, found that more than half said their organizations targeted pay ranges either presently or in the future. Another pay structure model, the step structure, was cited by 31% of respondents as a future target for their organizations and by 22% as both a current and future target.

Most employers’ pay strategies target middle of market or are job-specific

“Which of the following best describes your organization’s market strategy?”

A plurality of respondents said their organizations priced pay by targeting the middle of the market, but Payscale said it found that top-performing organizations were more likely than their lower-performing counterparts to pay above-market. Paying above-market rates was also more common among smaller organizations with fewer than 100 employees.

Employers are making those changes against a backdrop of shifting compliance demands. Jurisdictions in at least 13 U.S. states and Washington, D.C., now have laws requiring some form of pay transparency, such as the inclusion of pay ranges in job postings. Minnesota is the most recent state to join that list with a law set to take effect in 2025.

The trend toward disclosure has been observed even where such laws are not in place, a recently published National Women’s Law Center analysis of Glassdoor data between 2022 and 2023 found.

Generally, most respondents to Payscale’s survey said they were posting pay ranges either to comply with applicable laws or had done so regardless of legal requirements. In 2023, only 15% said they were not posting or advertising jobs in locations that mandated pay transparency, and 11% said they had refrained from doing so while they worked on their pay practices. Both percentages declined when respondents were asked about their 2024 plans.

While transparency has grown thanks in part to legislation, the manner in which organizations approached the subject varied, Payscale found. For example, nearly 70% of organizations said that they shared individual pay with employees only, and only when required to do so. Only 6% said individual pay was shared within departments, and even fewer shared this information organization-wide or publicly.

“While the prevalent method centers on sharing pay ranges only with affected employees, as pay transparency becomes more ubiquitous, it is important to think about the impact publishing ranges can have on employee retention — both positive and negative,” Payscale said. “Even more critical is the importance of empowering managers to have proactive conversations with employees about pay and the organization’s approach to it through pay communications.”

Sometimes the newfound availability of pay information can increase employee conversations about the subject — leading to sometimes awkward interactions between co-workers or between managers and their reports. But over time, familiarity with pay conversations will help normalize the topic and support discussions about pay and career progression, Payscale said.

When setting pay, 63% of respondents to Payscale said they use between two to four sources, with over one-third of organizations with more than 5,000 employees stating they used more than five sources.

Salary survey data from traditional publishers, HR-reported aggregate market data in compensation software and closed-network HR-reported data ranked highest on the list of data sources that respondents trusted most when setting pay policies. “Free or open online data” and salary data from job board postings were among the least trusted sources, according to Payscale, although they remain commonly used.

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Source: HR Dive

https://www.hrdive.com/news/pay-structures-change-to-suit-equity-transparency-needs/718228/

January 17, 2024

It’s been reported that ‘sick shaming,’ or the practice of pressuring workers to work while sick but then ridiculing them for appearing under the weather, is leading to increased sales of cold medication and even causing individuals to overmedicate.

In January, ResumeBuilder.com surveyed 1,000 managers to find out their thoughts on workers taking sick time off and if they are engaging in sick shaming.

Key findings:

• 24% of managers think workers who take sick days often lie or exaggerate their illness
• One-third of managers often ask for medical documentation as proof of illness
• 20% encourage workers who are feeling ill to still come into the office
• 11% admit to sick shaming workers
• 27% of managers believe a culture that encourages sick employees to work is good for productivity

1 in 4 Managers Think Workers Often Abuse Sick Days

On average, 35% of managers say their direct reports ask for sick time off very often (10%) or often (25%), while 44% say occasionally, 21% say rarely, and less than 1% say never.

One in four managers often suspect that their reports are lying or exaggerating their condition, while 34% often ask for medical documentation as proof of illness for workers who request a sick day.

11% of Managers Admit to Sick Shaming

Our survey found that 20% of managers encourage workers to come into the office even when they are sick. Surprisingly, 45% of these managers (or 11% of the total sample) admit to then often shaming visibly sick workers who choose to come into the office.

Additionally, 27% of managers overall believe a culture that encourages sick employees to work is good for productivity.

“Having a culture where workers are asked to work or just expected to work when sick is bad for companies because it enforces the view that companies only see you as a number versus a human being,” says Resume Builder’s Resume and Career Strategist Julia Toothacre.

“It creates a culture that lacks empathy and ultimately doesn’t care for its employees’ health, well-being, or productivity. People who are sick are more likely to make mistakes and can be slower to comprehend. It doesn’t make sense to encourage sick people to work when they aren’t 100% ready to work.”

3 in 10 Managers Think Workers With Severe Colds Shouldn’t Take the Day Off

Only 20% of managers think workers should take a day off for a mild cold, while 38% say the employee should work from home, 20% say they should still go into the office, and 22% say they should take the day partially off but still answer emails or attend meetings.

For a severe cold, 70% of managers think workers should take the time off, 14% believe the employee should work from home, 5% think workers should still come into the office, and 11% think workers should take the day partially off.

“COVID-19 changed a lot about how we work and specifically how we work when we are sick,” says Toothacre.

“This survey shocked me because of what we went through with COVID. Why are we promoting having people in the office who can spread any kind of illness around? As a result of working from home, there is now an option for many people to take work home when they aren’t feeling well, but that doesn’t mean it should be recommended. Giving employees the option without any pressure would be the best course of action.”

65% Say More Clear Sick Policies Are Needed in the Workplace

Overall, 65% of managers say more clear sick leave policies are definitely (32%) or probably (33%) needed in their workplace.

We asked managers when they think it’s reasonable for workers to take sick days off, and many do not believe it’s always reasonable to take a day off for personal health, mental health, or family emergencies.

Stringent or unofficial sick policies will create an unsupportive environment for employees ultimately resulting in organizations losing talent,” says Toothacre. “Employees are people, and they want to be seen as such. They get sick, they have hard days, their family members get sick, and life happens. The average employee won’t take advantage of the system if they are in a supportive and flexible culture.”

Methodology

This survey was commissioned by ResumeBuilder.com and conducted online by the survey platform Pollfish. It was launched on Jan. 10, 2024, and 1,000 respondents completed the full survey.

To qualify for the survey, all participants had to work at a company with at least 11 employees and have an executive, director, and manager-level title. Respondents also had to have a household income of at least $50,00 and be at least 25 years old. Finally, respondents were screened out if they answered that they do not manage one or more direct reports.

To avoid bias, Pollfish employs Random Device Engagement (RDE) to ensure both random and organic surveying. Contact pr@resumebuilder.com for more information.

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Source: ResumeBuilder.com

https://www.resumebuilder.com/1-in-10-managers-sick-shame-unwell-workers-they-forced-to-come-into-the-office/

Wed, January 17, 2024 by Emily Olsen

Dive Brief:

• Families with employer-sponsored health insurance lost out on an average of more than $125,000 in earnings over the past 30 years as growing premiums cut into their wages, according to a study published in JAMA Network Open.

• Premiums as a percentage of compensation were significantly higher for Hispanic and Black families over the more than 30-year study period compared with White families. Lower-income people were also more burdened by increasing health insurance costs.

• Rising premiums are likely linked to lower earnings, increased income inequality and wage stagnation, researchers said.

Dive Insight:

Health insurance offered through employers represents the single largest source of coverage in the U.S.

But premiums often rise faster than inflation and wage growth, frustrating employers who are on the hook for a large portion of climbing costs and putting increased financial pressure on families.

Yet access to health coverage doesn’t negate affordability challenges either. Forty-three percent of people covered under employer-sponsored plans reported it was difficult to afford healthcare, according to a recent survey by the Commonwealth Fund.

Increasing premiums may also be restricting wage growth, especially for racial minorities and families who already earn less, according to the latest JAMA study, which analyzed compensation and employer-sponsored premium data from 1988 to 2019.

Though a similar number of people were enrolled in employer plans, premiums represented an average of 7.9% of compensation in 1988, compared with 17.7% in 2019.

If costs had stayed the same, the median family with employer coverage would have earned $8,774 more in annual wages in 2019.

That decrease in wages has “real consequences for US families,” as many struggle to afford unexpected expenses or have already racked up medical debt, researchers said.

But the financial burden from growing premiums doesn’t impact families equally. In 2019, premiums as a percentage of compensation at the 95th percentile of earnings was 3.9%, compared with 28.5% for families in the 20th percentile of earnings.

For White families, premiums represented 13.8% of compensation in 2019, compared with 19.2% among Black families and 19.8% for Hispanic families with employer-sponsored coverage.

“By receiving lower earnings historically, Black and Hispanic households shoulder a greater proportion of the increase in health care premiums as a percentage of their compensation, a trend that persisted throughout all 3 decades of our analysis,” researchers wrote.

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Source: Yahoo Finance

https://finance.yahoo.com/news/rising-health-insurance-premiums-linked-110014364.html

Published Jan. 11, 2024 by Caroline Colvin

While Eagle Hill expects retention to decline in the first half of 2024, compensation continues to be a positive factor.

Workers are more likely to leave their jobs within the next six months, Eagle Hill Consulting researchers warned employers in a recent analysis of factors that play into retention. “Employers can expect increasing attrition” through mid-2024, they projected.

In their analysis, researchers factored in worker opinions on their level of compensation, their job market prospects, their current workplace culture and overall confidence in their organization. Throughout the past year, the firm’s retention index dropped between Q1 and Q4.

----- ----- 

BY THE NUMBERS: HOW PAY FACTORS INTO RETENTION

• 49% - The rate of workers who said they feel confident in their company’s future
• 50% - The rate of workers who said they feel connected to their organization’s culture
• 40% - The approximate rate of workers who feel they have better opportunities outside of their current company
• 37% - The rate of workers who believe they have a path to increase their compensation at their organization.

----- ----- 

While the results of this Eagle Hill Consulting report may not inspire confidence, one finding may provide hope: The rate of satisfaction with compensation was the only factor in the index that saw an increase. 

Researchers suggested that “looming economic uncertainty” throughout 2023 may have “reframed” workers’ perceptions of their pay, resulting in more positive sentiments about their compensation.

The situational reframe is notable because raises have generally tapered off since first talks of an economic downturn in 2022. Recently, data suggested that almost half (40%) of workers had not seen an increase in compensation in the 12 months preceding. In that same BambooHR report, almost 75% of workers said they would leave their role for a higher salary.

Another study pointed to wage growth slowing, per employer reports. Bill Reilly, managing director of Pearl Meyer advising firm, characterized the worker compensation landscape as “certainly cooling off, consistent with declining overall inflation levels,” but “not gloomy.” 

Financial well-being remains a focus for workers going into the new year — it’s one of the main projected 2024 workplace trends, along with debates over RTO, artificial intelligence and how best to address worker mental health.

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Source: HR Dive

https://www.hrdive.com/news/workers-are-a-little-more-satisfied-with-compensation/704103/

January 3, 2024 by Sara Zaske, WSU News & Media Relations

PULLMAN, Wash. – As more states require employers to list compensation on job ads, a trending strategy to use very wide pay ranges could potentially harm recruitment, according to a Washington State University study.

The study, published in the Journal of Applied Psychology, found that participants in three different experiments were more likely to respond negatively to job ads with very wide pay ranges, viewing those employers as less trustworthy. Prior surveys have found that most people report they would trust organizations that include pay ranges in their postings more than those that do not, but as this study indicates, the way potential pay is presented also matters.

“It’s not just a choice between including a pay range or not – how compensation information is communicated matters, and at least in this study, having a very wide range might send a negative signal to potential applicants,” said study author Kristine Kuhn, a WSU Carson College of Business researcher.

How the ad explained the wide pay range also had an effect. In one of the experiments, participants were even less attracted to the organization if a very wide pay range included a statement that the offer amount would depend on the candidate’s qualifications. On the other hand, a more seemingly objective explanation that the offer would depend on the candidate’s geographic location tended to improve impressions of the employer.

Historically, most job postings in the U.S. did not include numerical pay information, but in recent years several states, including Washington, California, Colorado and New York, have enacted transparency legislation requiring many recruiters to list pay ranges – in part because there is evidence it increases equity.

Seeing an emerging trend in job postings with large pay ranges, Kuhn set up three experiments with different groups of participants to test the effect of this practice. In each experiment, some participants saw ads with wide salary ranges, such as a gap of $50,000 or more between the low and high point, while others saw ads with a narrower gap of around $10,000. The candidates then responded to questions about their perceptions of the organization posting the ad.

Participants in the initial experiment were college students; the second experiment surveyed 350 college graduates using an online panel, and the third experiment involved 245 participants with recent job search experience. Across all three experiments, on average ads with larger pay ranges evoked less favorable impressions of the employers than the narrower ranges.

In the last experiment which had an ad with a very large pay range of $58,100-$152,500, the participants provided written answers about how they viewed the employer. This revealed a high level of cynicism among some who called the wide pay range “dishonest,” “disingenuous” and “ludicrous.”

As one participant put it: “The large range implies that they tend to devalue their employees. I doubt they would actually offer anyone applying for this position a salary at the top range, regardless of credentials.”

There were some outliers, however, who viewed the large range as a positive, seeing the high top number as showing possible “room for growth without needing a promotion to another job.”

Ideally, advertising a pay range should streamline the recruiting process, Kuhn said, so the recruiter and applicant on are on the same page. However, some organizations, especially smaller ones, may not have well-defined job structures, so the large pay ranges in job ads may indicate they want to tailor the position to the candidates who respond.

“There probably is a goldilocks area of a just right pay range where it gives the employer some flexibility without sending negative signals to prospective applicants,” said Kuhn. “Also, while from a legal standpoint they may be required to advertise an expected pay range, employers and job candidates can still negotiate.”

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Source: Washington State University

https://news.wsu.edu/press-release/2024/01/03/job-ads-with-wide-pay-ranges-can-deter-applicants/

By Rick Reyes, Joy C. Rosenquist, and Adam Fiss © Littler

October 13, 2023

On Oct. 11, California Gov. Gavin Newsom signed a bill into law allowing for up to five days of time off work for reproductive-related losses.

Senate Bill 848 makes it an unlawful employment practice for an employer to refuse to grant an eligible employee's request to take up to five days of unpaid leave following a reproductive loss event.

Previously, California law required employers to provide bereavement leave upon the death of an employee's family member. Reproductive-related losses, however, largely remained unaddressed. Such losses are a common occurrence with more than 1 in 4 pregnancies resulting in miscarriage, and they may result in post-traumatic stress disorder (with almost 1 in 3 women developing pos-traumatic stress disorder after a miscarriage).

What Does this New Leave Require?

SB 848 acts as a subset of California's bereavement leave law and increases an employee's leave entitlements for a reproductive loss event, which is defined as "the day or, for a multiple-day event, the final day of a failed adoption, failed surrogacy, miscarriage, stillbirth, or an unsuccessful assisted reproduction." Covered employers must provide up to five days of leave for reproductive loss events.

The law limits the amount of reproductive loss leave to a maximum of 20 days within a 12-month period.  Thus, although an employee may be subject to multiple reproductive loss events in a 12-month period, an employer is not required to provide more than 20 days of reproductive loss leave.

Like many other California leave laws, SB 848 prohibits employers from retaliating against any employee for requesting or taking leave for a reproductive loss.

California employers with five or more employees are covered under the law. Only employees who have worked for the employer for at least 30 days are eligible for reproductive loss leave.

Subject to narrow exceptions when an employee takes applicable leave under state or federal law, eligible employees must take the leave within three months of the event triggering the leave (i.e., reproductive loss events), but need not be taken on consecutive days.

Leave under the statute is unpaid, unless the employer has an existing policy requiring paid leave. Eligible employees may choose to use any accrued and available paid sick leave or other paid time off for reproductive loss leave.

SB 848 does not contain any provision permitting employers to request any documentation in connection with reproductive loss leave.

In light of this new leave entitlement, steps that a California employer may wish to take include:

• Updating their employee handbooks and/or leave policies to incorporate this new leave entitlement.
• Training management, supervisors, and HR on this new leave law.
• Determining whether reproductive loss leave will be paid pursuant to any existing employer-provided leaves or policies.
  

Rick Reyes, Joy C. Rosenquist, and Adam Fiss are attorneys with Littler in California. ©2023. All rights reserved. Reprinted with permission. 

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Source: SHRM 

https://www.shrm.org/resourcesandtools/legal-and-compliance/state-and-local-updates/pages/california-reproductive-loss-leave.aspx