Hot Topics in Total Rewards

AUTHOR

Jennifer Carsen

PUBLISHED

Feb. 17, 2020

Dive Brief:

• While 67% of organizations say pay transparency is increasingly important — with 4% reporting it's of the highest importance — only 14% of organizations have dealt with pay transparency beyond a "moderate" level, according to a study by WorldatWork and Mercer.  
• While near half of employers have a "moderate" approach," 4% have nonexistent approaches to pay transparency, 35% have minimal transparency and just 1% have extreme transparency, according to the survey of 478 respondents. Additionally, more than 60% of respondents said their managers are not trained to effectively deliver pay communications.
• Nearly half (42%) of respondents do not share information about how jobs are valued and compensated within the organization. When pay equity adjustments are made, only 53% of organizations communicate to their employees that the increase is the result of a pay equity adjustment; 30% bundle the adjustment along with other pay increases and don't explicitly mention it.

Dive Insight:

HR's ability to accurately price workers' skills is central to the hiring process, according to PayScale. Additionally, when managers understand the value of skills, they can be more transparent when talking with employees about professional opportunities and growth.​

Pay transparency has been shown to eliminate gender-based pay gaps across most jobs, except for traditionally male-dominated occupations like protective services and repair/maintenance. Pay transparency may also help reinvigorate wage growth in the United States, some have proposed.

Increasingly, pay transparency is mandated by law; a few states, including California and New York, have explicit pay transparency laws, and many jurisdictions prohibit employers from asking about an applicant's salary history (notably, Philadelphia's salary history ban was recently upheld after a lot of legal back-and-forth).

Section 7 of the National Labor Relations Act also protects employees' right to discuss pay and working conditions, even in non-union workplaces. Many big employers, including Lowe's and Burger King, have gotten in trouble for trying to shut down these conversations.

Many employers are understandably concerned about potentially opening a can of worms with employees when they consider increasing pay transparency. Experts point out that there is a big difference between disclosing individual pay decisions versus simply being open about the company's overall compensation philosophy.

A comprehensive pay audit can be a good place to begin, to investigate if any gender-based or other compensation disparities exist. This audit is best performed in conjunction with counsel so that legal privilege exists in the event of any future disputes.

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Source: HR Dive

https://www.hrdive.com/news/companies-managers-pay-transparency-lacking/572258/

And it's not just parental leave, but bereavement leave, military leave, mental health days and more.

By Katie Kuehner-Hebert | February 04, 2020 at 10:19 AM

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Corporations are expanding paid leave benefits – even more than what is currently required by law, according to the Business Group on Health’s 2020 Large Employers’ Leave Strategy and Transformation Survey.

Business Group polled 113 large employers and found that 39 percent of large employers expanded their paid leave benefits in 2019. More specifically, 30 percent added new types of leave, 24 percent expanded the duration of leave and 12 percent expanded eligibility of leave.

“Large employers most reported adding or making changes to parental leave and caregiver leave,” the authors write. “However, employers are also looking beyond these leave types to volunteer leave, bereavement leave, military leave, mental health days, summer Fridays off and short-term disability.”

For 2020, fewer employers plan to add a new type of leave, though they will continue to expand upon current offerings. Almost a quarter (23 percent) say the duration of leave available will increase, and 8 percent say they will expand eligibility for leave benefits. For 2021 and 2022, even more employers (15 percent) are considering expanding eligibility.

“The future expansion of eligibility demonstrates that employers not only understand the value of leave but are making a commitment to provide equitable benefits for all employees,” the authors write.

When asked which factors most influence the design of leave benefits (other than legal requirements), company values and brand (66 percent) and market research and competition (66 percent) are the top choices for the respondents.

“Interestingly, more employers indicated that employee feedback (57 percent) influenced the design of leave benefits than senior leadership did (30 percent), potentially a sign of the growing support for leave benefits among the general population, as well as the desire among large employers to improve the employee experience,” the authors write.

Eighty-two percent of the respondents say that employee health and well-being is a top reason leave benefits are important to their workforce strategy, “demonstrating employers understand time away from work and employee well-being are closely related.” Compliance (67 percent) and employee engagement (46 percent) are other top reasons respondents offer leave benefits.

Regarding employer challenges related to leave and absence management, 77 percent of the respondents say that state and local paid leave laws are a top challenge, followed by employee experience with the leave process (66 percent), intermittent leave management (44 percent), lack of resources for administration (39 percent) and business continuity (37 percent).

“State and local paid leave laws have required many employers to re-examine the design and administration of their leave benefits to ensure compliance,” the authors write. “These policies can create disparities across a national company’s workforce and may impair the employee leave experience….How do large employers view these state and local requirements? Many are looking to a federal law that would simplify matters for multi-state employers.”

When asked which elements of a federal paid family leave law would be particularly important, a uniform, nation-wide standard for compliance and reporting is the top priority (88 percent), “a strong signal that employers are feeling inundated by the requirements.” Respondents’ second priority is establishing a nation-wide paid leave standard (78 percent), a response in line with the importance of a preemption of state and local laws.

“Current legislation under consideration by Congress, most notably the FAMILY Act, would set a federal floor for paid family leave benefits but would not supersede state or local paid laws, not addressing large employers’ major concern,” the authors write. “The recent Federal Employee Paid Leave Act, signed into law in 2019, provides 12 weeks of paid parental leave for federal employees and may also serve as a model for future legislation. However, because there is no widespread agreement on amounts and funding for family and medical leave nation-wide, Congress will likely continue debating federal leave solutions in the months to come.”

Regarding the structure of leave benefits, for exempt employees, 54 percent of employers provide access to a traditional leave structure, 40 percent offer PTO and 6 percent offer unlimited/permissive leave. For non-exempt employees, traditional leave structures are even more popular with 61 percent of employers offering this structure. Thirty-eight percent of employers utilize PTO and 1 percent offer unlimited/permissive leave.

“While a traditional leave structure with separate vacation and sick leave banks were used by most large employers in 2019, PTO and unlimited/permissive leave have grown in popularity over the past decade, and survey results indicate that trend will continue in 2020,” the authors write.

For 2020, 18 percent of large employers are considering major changes to their current leave program by switching from one structure to another. While a few are looking closely at implementing an unlimited/permissive leave structure, more employers are looking to move from a traditional structure to PTO.

For multinationals, about one in five have established a global leave policy and another 18 percent have a philosophy in place, though many leave programs are implemented locally. Leave related to parenting (parental, maternity/paternity, adoption) is covered by more than 90 percent of global policies. Bereavement and caregiver leave are less likely to be included. Two-thirds of global employers calculate leave using a global minimum standard and 28 percent offer a stacked benefit in which the same amount of leave is added onto the statutory requirement.

“Large employers with global locations must navigate significant challenges in order to establish a program with globally consistent principles that can be adapted to local cultural norms, while complying with varying country-specific legislation,” the authors write. “When it comes to legislative requirements, many countries are ahead of the U.S. in establishing guidelines and policies for parental leave, sick time and paid time off for vacation, to name a few.”

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Source: BenefitsPro.com

https://www.benefitspro.com/2020/02/04/big-companies-expanding-paid-leave-options/

Solving pay equity comes from organizations and their leaders who take ownership of culture, pay programs and total rewards.

Scott Cawood (CEO of WorldatWork)

Feb. 05, 2020

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In 2018, 40 states put through legislation on pay equity practices. 

There is no shortage of laws that give all people the right to be free from discrimination in compensation, including the Equal Pay Act of 1963, Title VIl of the Civil Rights Act of 1965, the Age Discrimination in Employment Act of 1967, and Title I of the ADA Act of 1990. 

Pay equity is a critical issue for our time. It’s proven to drive profits for companies that support it. So why is it taking legislation to get companies to move towards a more fair and equitable pay system?

Perhaps it’s the misperception that pay equity means treating everyone the same way. But equal doesn’t mean fair. The goal of pay equity is not to treat everyone the same — it’s actually just the opposite. You can treat people fairly and still treat them differently. Factors such as educational background, tenure, skill, quality of work, etc., are all variables that can, and should, be factored into the mix. But, biases based on personal attributes, such as race, gender, age, disability, sexual orientation and more, are variables that should not affect pay.

Pay equity is equal pay for work of equal value. It is also used to describe pay comparisons where there is no unexplained difference pay, and that is not the result of defensible and legitimate factors. Therefore, pay inequity is any difference in pay that is unexplained, or not the result of defensible and legitimate factors.

According to the World Economic Forum Global Gender Gap Report for 2018, which benchmarks 149 countries on their progress toward gender parity, the US ranked No. 51 in the world. We can do better. By comparison, Iceland, Norway and Sweden occupy the top three spots. And, although many countries have achieved important milestones toward gender parity, much still needs to be done.

Pay equity includes total compensation — including overtime pay, bonuses, stock grants, profit sharing and bonus plans, and yes, life insurance, PTO and holiday pay, travel allowances, reimbursement for travel expenses. However, we need to remember all the processes that result in a worker paycheck, including promotions, performance reviews, merit raises, access to the CEO and representation on the leadership team since they all can impact pay differences over time. 

And, while individual organizations have their own formulas for fair and equitable compensation, everyone will benefit by evaluating pay equity in the broader ecosystem. Solving pay equity comes from organizations and their leaders who take ownership of culture, pay programs and total rewards.

The first step is for organizations to be willing to take a look at their own data and processes.  And then be willing to acknowledge it if there are issues around pay equity and work to solve for it. Some may desire to make their process and findings public inside their companies, and then share the plan to monitor it regularly to ensure continued pay equity.   

 Here are three things to get started: 

1. Analyze average pay of people within an organization to find patterns. Start by role-to-role comparisons, then group to group, the protected classes.
2. Evaluate the hiring processes to ascertain diversity of teams and the ways in which your process results in a wide range of candidates.
3. Evaluate the processes which reward, promote, and give feedback to your workforce.  Are they equitable or did the majority of raises go to one gender, racial, or age group?

 To solve for pay equity issues we must look closely at representation. We need more women, people of color, and the LGBTQ community in leadership positions such as on corporate boards. According to Heidrick & Struggles, men hold 93 percent of the CEO positions in U.S. companies. Further research from ISS Analytics found that the percentage of female directors is just 24 percent in the United States.

Total rewards programs include anything that signals to the employee that they are important. The most effective total rewards programs are enacted through the lens of inclusion and take into consideration representation from under represented groups.

It’s also critical to be transparent as to how rewards are given out and how employees can navigate the system. Today, most employees do not have any idea how their pay packages are put together. An organization’s goal is transparency so that people understand how to navigate the culture and achieve their potential at work, which affords them the chance to have a great life.

For example, ACIPCO, an international provider of clean energy technology and services, provides quarterly profit sharing, an on-site health care facility and rewards workers for good tips/suggestions. They also give access to the company plane and yacht when employees need it — and this is not based on hierarchy, everyone gets access. It’s no wonder that they consistently land on Fortune’s 100 Best Companies to Work For and, in an industry where turnover is 80- to 100 percent, they have less than .05 percent a year.

Starbucks offers free Spotify premium and free online classes at Arizona State University and, of course, free coffee. Netflix offers one-year parental leave and Salesforce.com provides commuter benefits, educational reimbursement, refinancing of student debt and 24-hour travel assistance.

Because of the impact on culture, customers, and on the regulatory environment, it’s vitally important that attention to this comes from the C-suite, not just from HR. The critical role for HR is to observe, rebuild systems, make sure the data is accurate and challenge the C-suite and the existing ways of doing things to be the champion of the people experience. 

Here are the takeaways: 

1. Don’t shy away from the issue of pay equity. Embrace its importance and build processes around the issue rather than waiting for federal or state laws to dictate what you need to do.
2. Analyze and understand current plans that are in place. If a woman or minority is disadvantaged from the start of employment, that’s a problem that will grow exponentially.
3. Consistently look at and monitor the process, review it and test it.
4. Assess gaps from these measurements and make changes accordingly.
5. Institute transparency between employees and leadership so that you’re setting the narrative and telling your own story rather than allowing social sharing to drive it and derail it.

 In short, paying people fairly is a great idea for many reasons and a great business practice. Don’t be afraid to look at your own pay equity issues. It’s better to be in the know. 

The result is a boost in reputation, the ability to recruit the best talent and to provide employees the ability to maximize their contributions to the organization.

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Source: Workforce.com

https://www.workforce.com/news/pay-equity-doesnt-mean-paying-the-same-for-everyone

By Katie Kuehner-Hebert | January 27, 2020 at 10:45 AM

Being open and talking about your company's compensation strategies can shrink the wage gap between genders and generations.

How to combat unconscious bias among your workers that your organization isn’t doing enough to achieve pay equality for men and women?

Have a frank discussion with employees about your compensation practices—and back those talks up with real time market data to show how their pay was determined, according to PayScale Inc.’s report, “Does Pay Transparency Close the Gender Wage Gap?”

PayScale compared pay for men and women doing the same job in the same geographic location, with the same experience and education, and for 2019, the overall “controlled” gender pay gap was women earning $0.982 cents for every $1 men earned.

However, for workers who said they had a transparent pay process at their company, the gap was effectively erased: for this group, women in 2019 were estimated to earn between $1 and $1.01 for every dollar earned by men.

“This latest research shows just how powerful transparent pay practices can be for organizations,” says PayScale CEO Scott Torrey. “When employers use real market data and talk openly with employees about their pay, it serves to challenge the underlying bias that can impact decisions about compensation. Most employers want to ensure they’re paying fairly, so we encourage HR departments and senior leaders to adopt transparent pay practices as an important step toward achieving this goal.”

Having a transparent pay process also erases the gender pay gap across generations, PayScale’s analysis found. Millennial women who work in a transparent pay environment do slightly better ($1.02) than other generations of women (who all earn $1.01).

Across industries, transparency helps to reduce the gender pay gap, though a marked gap still exists in some industries, including accommodation and food services, retail and customer service, and transportation and warehousing.

Certain occupations that are male dominated also continue to have a marked gap — even after transparent pay practices are adopted by their employers. Those include food preparation and serving-related occupations, installation, maintenance and repair jobs, production occupations, protective services jobs and sales occupations.

Moving up the career ladder, transparent pay discussions appear to have the largest impact for individual contributors, supervisor and managers, according to the analysis. By contrast, female directors and executives still faced discriminatory pay penalties for their gender–however, the gender pay gap is diminished with transparent pay practices.

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Source: BenefitsPro

https://www.benefitspro.com/2020/01/27/pay-transparency-can-help-eliminate-the-wage-gap/?slreturn=20200104123909

By Joanne Sammer

As employers look for new ways to hire and keep skilled employees, some have begun to leverage artificial intelligence (AI) to more precisely compensate workers. They want pay offers and salary adjustments to reflect the value of an employee's skills rather than the compensation level of a specific job, particularly when those skills are in high demand and critical to the organization's success.

By using AI, employers can gain "new opportunities by rethinking the value that compensation programs deliver to the business and employees," said George Zarkadakis, digital lead at consultancy Willis Towers Watson in London. AI could help develop compensation metrics that reward employee efforts to advance an organization's goals. It can also analyze great swaths of labor market data to provide localized and up-to-the-minute competitive pay rates.

Shifting from Jobs to Skills

IBM has been using AI in its compensation systems for several years as it has shifted performance management to focus on ongoing feedback rather than a single periodic performance rating, while also tying salary increases more closely to employee skills. As a result, pay decisions more accurately reflect what the market is paying for certain skills as demand for those competencies ebbs and flows.

"Certain new skills are scarce and high in value, while other skills have become commoditized," said Joanna Daly, the company's Vice President of Compensation, Benefits and Corporate Health and Safety, based in Armonk, N.Y. In this environment, "managers must make more complex compensation decisions, so they need to have an understanding of the supply and demand for specific skills."

IBM managers use the in-house system to make better decisions during compensation discussions, including machine-learning that gives them salary increase recommendations ranging from high to average to no increase.

Managers can also leverage this information to explain how pay decisions are linked to employees' skill levels. "It gives employees an incentive to keep their skills competitive," said Daly, who noted that the AI system allows IBM to react immediately to changes in the market for specific skills.

Although the AI tool makes salary increase recommendations, the final decision is still up to the individual manager. However, "less than 5 percent of managers have disagreed with these recommendations," Daly said. Managers who follow AI compensation recommendations have cut their attrition rates by 50 percent.

Creating Nimble Systems

Employers can leverage AI not only for current compensation needs but also to model how skills might change over the next few years and how much it will cost to acquire and retain those skills in the workforce.

To price skills, employers can use AI to:

• Harvest datasets from both internal and external sources.
• Separate out the skills various roles require now and are likely to require in the future.
• Determine pay for those skills based on geography.

Employers that are not ready to develop these systems themselves can rely on vendors to do it for them. For example, PayScale, which provides online data about compensation and benefits, relies on AI to help employers price jobs based on small differences among employees' skills and local labor market conditions.

That's become such an important element of compensation planning that PayScale updates its compensation database of skill differentials every two weeks, compared to quarterly updates for geographic differences.

AI Challenges

Using AI in this way is not without challenges and risk. If not managed and monitored appropriately, AI-based compensation tools could start out with ingrained biases or become further biased over time.

"The risk is in the variables in connection with the data in AI," said Peter Cassat, a partner with law firm Culhane Meadows Haughian & Walsh PLLC in Washington, D.C.

Research on AI outcomes by The Brookings Institution, a Washington, D.C.-based think tank, shows generally that if biased data feed the algorithm, results may be biased. For example, if some employees are being paid less than others despite having the same job, experience and skill levels, simply inputting that data into an AI-based pay system could perpetuate that bias.

"Bias in algorithms can emanate from unrepresentative or incomplete training data or the reliance on flawed information that reflects historical inequalities," the Brookings report stated. If left unchecked, biased algorithms can perpetuate biases against certain groups of people "even without the programmer's intention to discriminate."

Employers should be mindful of how AI tools are functioning and what data they are collecting. "It is important to make sure this does not favor some groups over others based on factors like gender," Cassat said.

Avoiding these problems begins with due diligence before choosing AI tools. Over time, it is also important to remain alert for any unintended consequences, not only in the recommendations the system outputs but also in how managers use the results.

"Don't just implement and forget," Cassat said. "Look at the results and whether and how they differ following implementation."

Rigorous data governance for AI also is important to ensure AI-supported compensation decisions are fair and unbiased. "AI systems that are not ethically governed can promote exclusion and feel too intrusive—and even threatening—to those impacted by their decisions," Zarkadakis said.

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Source: HR People + Strategy

https://blog.hrps.org/blogpost/Bringing-Artificial-Intelligence-into-Pay-Decisions

By Derrick Bryson Taylor | Published Jan. 10, 2020 | Updated Jan. 11, 2020

Current manager salaries for the restaurant range from $50,000 to $80,000, the company said, while one retail analyst said raising pay is a “necessary move” in the current labor market.

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Taco Bell will soon begin testing a $100,000 annual salary for general managers in select locations in an attempt to attract and retain talent, the company said Thursday in a statement about its 2020 plans.

“As we grow the Taco Bell business, we’re really focused on managers,” Ferril Onyett, senior director of global training and international human resources at Taco Bell, said on Friday. “They have a huge impact on restaurant performance. We hope through this test we can evaluate the effect on not only restaurant performance but team morale, customer experience and recruitment and retention.”

Taco Bell, which is owned by Yum! Brands, also announced that it would give employees at least 24 hours paid sick time per year and that it would make consumer packaging recyclable by 2025.

Salaries for general managers at company-owned stores range from $50,000 to $80,000, depending on time in the role, location and experience, Ms. Onyett said, adding that the corporation cannot mandate salaries for restaurants owned by franchisees.

It’s still unclear how long the test will run or which of the company’s more than 6,600 locations will be selected, but Ms. Onyett said the test will take place “later this year” and that the company is still in “planning phases.”

Taco Bell’s planned test demonstrates the company is prepared to put more money into its staff and into company-owned stores in an effort to boost performance, Neil Saunders, managing director of retail at GlobalData, said on Friday. “It obviously feels confident enough to be able to really provide such a sharp increase in salaries of people running those outlets,” he said.

“I think it’s a necessary move because I think the labor market is now extremely tight,” Mr. Saunders said. In order to attract good talent, companies have to pay for it and give good benefits, he added.

“It’s certainly the case in the fast-food industry that there can be high turnover, even at management levels, and that has a detrimental impact on how stores are run,” he said. “A good manager in an outlet can make a difference between that store being really successful or being pretty mediocre in terms of performance.”

The test by Taco Bell could also create a ripple effect among fast-food companies.

“I think it does signal the costs of running fast-food outlets could be going up,” Mr. Saunders said, adding that if one company starts to make a move in terms of salaries, it could put pressure on everyone else to follow suit.

In-N-Out Burger, which has locations in the western United States, already pays its managers well, Mr. Saunders said. “It’s a really successful fast-food outlet because its managers are fully invested in running the stores well and efficiently.”

A request for comment from In-N-Out Burger regarding its salary range for managers was not immediately answered on Friday. Neither were requests for manager salaries at McDonald’s, Burger King and KFC.

The fast-food industry has undergone a number of changes in recent years. Restaurants have started offering plant-based options to customers, and employees have pushed to raise the minimum wage. In 2019, a bill was introduced in Congress that would raise the federal hourly rate to $15 from $7.25 over five years. The bill passed in the House in July. In January, the minimum wage went up in 22 states, increasing pay for about seven million workers, who will take home an extra $8.2 billion over the year.

Taco Bell’s manager salary announcement came the day before the Labor Department released its monthly jobs report.

The United States added 145,000 jobs in December, while analysts had expected about 160,000 to be gained. It ended a year of steady but slowing gains in employment. For wages, growth was disappointing at 2.9 percent over the last year, far below the 3.4 percent height it reached in February. Wage growth for managers in December also slowed.

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Source: The New York Times Company 

https://www.nytimes.com/2020/01/10/business/taco-bell-manager-salary.htmlhttps://www.nytimes.com/2020/01/10/business/taco-bell-manager-salary.html

More than half of the 70% of companies that offer them expect to expand their offerings this year, according to a new WorldatWork study

by Brian Anderson | January 13, 2020

Seventy percent of companies currently offer financial well-being benefits and more than half of them intend to expand such offerings in 2020, according to a new financial well-being study.

As employers worry that their workers aren’t saving enough money for retirement, paying down debt or handling medical expenses, the study by WorldatWork, the Total Rewards Association, in partnership with global share plan provider Computershare, dives into how organizations measure well-being benefit needs of the workforce, communications strategies and usage rates.

In addition, the study assesses the prevalence of specific types of financial well-being benefits (to cover life events, personal debt, living expenses, and personal development).

“Financial benefits play a critical role in effective Total Rewards programs and this survey is a powerful benchmarking tool for employers. With life events (39%), rising healthcare costs (34%) and personal debt (22%) the leading stressors within the workplace, it’s no surprise that organizations are focusing on financial benefits, especially in such a tight labor market where retaining talent is so critical,” said Scott Cawood, president and CEO of WorldatWork.

Increased focus on financial wellness

The study puts some figures alongside its assessment that employers are increasing their focus on financial wellness:

• Over the past two years, financial well-being has received more attention than in prior years; 35% of companies have increased spending in this area.
• 49% of companies have rolled out new financial well-being plans, and 59% of HR teams are increasing time spent supporting these benefits.
• 21% of organizations are offering employee stock purchase programs (ESPPs) today, with an increase of 5% under consideration for 2020.
• Participant engagement rates are high in companies that offer ESPPs (82%).
• Of the 76% of companies offering ESPPs at a discounted rate, 96% said that they had no impact on 401k plans.
• 401k or equivalent plans with employer match are the most popular retirement offering (90%). Employee- or employer-funded HSA accounts for use in retirement are an emerging area of interest.

“Time and time again, research demonstrates that broad-based benefit programs encourage more engaged, productive, and loyal employees,” said Sheila Frierson, head of Computershare’s U.S. equity plans business.

WorldatWork collected data for the surveys from its members in September 2019. The survey report was based on 326 responses. The typical WorldatWork member works at the managerial level or higher in the headquarters of a large company in North America.

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Source: 401(k) Specialist

https://401kspecialistmag.com/financial-wellness-benefits-poised-for-big-growth-in-2020/

Early adopters share what they’ve learned so far

By Joanne Sammer

January 6, 2020

Unlimited vacation policies, which have become a fixture at tech companies and among start-ups, are now being widely adopted by older companies in traditional industries throughout the U.S. It's easy to see why. Employees respond positively to these policies, with 72 percent expressing interest in receiving unlimited paid time off (PTO), according to MetLife's 2019 U.S. Employee Benefit Trends Study, which interviewed 2,675 full-time employees last year.

But how well does unlimited vacation work in practice? Early adopters of unlimited PTO policies say they've learned four important lessons that led many of them to modify their policies.

No. 1. 'Unlimited Vacation' Isn't Unlimited

Unlimited vacation policies do not, in fact, allow employees to take an unlimited amount of time off. It's more of a marketing tool for recruiting talent than a literal interpretation of vacation policy. "We offer it because all of our peer companies do, and we don't want people to compare us to other companies unfavorably," said Jonathan Wasserstrum, founder and CEO of SquareFoot, a commercial real estate and technology firm based in New York with about 60 employees.

The company has established certain parameters for appropriate use of unlimited vacation. "A handful of employees use four to six weeks of vacation," said Wassertrum. "If they are performing well, we don't care. If they are not performing well, we need to have a conversation" about vacation use.

Carinsurance.net, a car insurance shopping portal with 30 employees based in Bellevue, Wash., doesn't place a specific cap on the number of vacation days employees can take but "we allow management to use their discretion in case an employee abuses their privilege," said company founder Tony Arevalo. "I would say anything more than 40 days off per year would fall into that category, but no one has even come close to that."

No. 2: Underuse Can Be a Bigger Problem than Overuse

A more common problem with unlimited vacation is that employees may end up limiting the amount of time they take off, sometimes taking far less than the average two weeks most employers offer. Employees taking too little time off is often even more problematic than employees taking too much. For example, Wasserstrum shows the need for time away from the office by taking off three or four weeks a year and encourages his employees to follow suit or to take at least two weeks off.

Pittsford, N.Y.-based accounting firm The Bonadio Group established unlimited PTO to help employees deal with the stresses of the firm's extremely compressed "busy season" during tax preparation time in winter and early spring. "We've found that flexibility is extremely important to both current and prospective employees," said Heather Rudes, senior director of human resources. However, to keep employees from taking off too little time throughout the year, the firm requires that its employees take at least 120 hours of PTO annually, including at least five consecutive business days. "This helps prevent employees from taking days here and there throughout the year without an extended break from the office," she said.

No. 3: Monitor Time-Off Distribution

Giving employees the freedom and flexibility to take time off whenever they want can create new management challenges due to understaffing and delays during projects if key team members are not available. To prevent that, "we had to introduce a master calendar that tracks who's in the office and who isn't," said Pete Sosnowski, head of HR for career site Zety in Warsaw, Poland. The company has 82 employees. Tracking helps the company "anticipate upcoming absences and cover all the bases in time."

On the other hand, carinsurance.net found that its unlimited vacation policy helped employees to manage their time off better. "They distributed their vacation time over the course of the year instead of in bulk during the holiday season," said Arevalo, probably because they didn't feel pressured to "save" enough time off in case it was needed for the end-of-year holidays. This, in turn, led to fewer gaps in work coverage during the holidays, since there was no pressure to "use it or lose it" at the end of the year.

No. 4: Commit to the Policy

Unlimited vacation time can reduce the administrative burden involved with tracking time off, including unused vacation carried over from year to year. For some employers, administration and tracking are beside the point. These employers emphasize that unlimited vacation policies should be based on trust with no need to track the amount of vacation employees take. "That's part of the benefit of having the policy in the first place so we don't have to waste time on administrative tracking of PTO and can instead use our time on more strategic people initiatives," said Emma Brudner, director of people operations at Lola.com, a travel management app with 115 employees. Besides, "hours worked doesn't usually correlate with performance for knowledge workers."

Brudner noted that for most employees, unlimited vacation policy is less about spending weeks at the beach and more about managing their lives more effectively. Unlimited vacation is often about "a parent taking an afternoon off to see her child in a school play, or someone with a chronic illness not having to carefully allocate vacation time so they can go to regular doctor's checkups," she said.

"Often, people will be more committed to their jobs when they don't feel nickel and dimed with time off, especially when that time off represents having to choose between work and taking care of themselves, or fulfilling their other obligations in life," Brudner noted. As such, she sees the policy as a crucial tool for attracting and retaining key talent, including individuals who are parents or caregivers, have disabilities, and just need flexible out-of-office time.

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Source: Society for Human Resource Management (SHRM)

https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/4-lessons-about-unlimited-vacation.aspx

By: Natalie Dreier, Cox Media Group National Content Desk
Updated: January 2, 2020 - 7:51 AM

U-Haul, the company known for moving truck rentals, is moving to a healthier lifestyle for its employees.

Starting Feb. 1, company officials will not employ anyone who uses nicotine. The new policy affects job applicants in 21 states including Alabama, Alaska, Arizona, Arkansas, Delaware, Florida, Georgia, Hawaii, Idaho, Iowa, Kansas, Maryland, Massachusetts, Michigan, Nebraska, Pennsylvania, Texas, Utah, Vermont, Virginia and Washington.

In some states where nicotine testing is permitted, applicants will go through a nicotine screening.

Current employees are not subject to the ban, U-Haul officials said in a press release.

U-Haul currently employs more than 30,000 people in the U.S. and Canada.

The new rules will be listed on job applications.

Currently, there are more than 2,000 job openings at U-Haul according to Linkedin.

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Source: Cox Media Group / Action News JAX

https://www.actionnewsjax.com/news/trending/u-haul-pledges-not-hire-nicotine-users/277HZXZWNVGJXOYGZ2ZRHCLQX4/

From freelance and flexible work to chatbots, 2020 is poised to be a year of continued change.

BY BAS KOHNKE

• 12-20-19

Over the past few years, the workplace has changed almost beyond recognition. With an increase in freelancers, more remote workers than ever, and advances in technology all shaping the way we work, the coming year is set to be big. Here are some of the key trends.

THE GIG ECONOMY AND FLEXIBLE WORK

The past few years have seen a dramatic increase in the number of people taking part in the gig economy by trading in one long-term position for shorter-term or more flexible work.

Temps, contractors, freelancers and remote workers all fall into this category, often working for companies for shorter amounts of time, on project-based or ad hoc work. For some, this is a way to build a more flexible life, working outside of traditional working hours, or working for multiple companies at once. Intuit actually estimates that by 2020, over 40% of U.S. workers will be independent contractors.

It’s not just how people work but where that’s changing. There has been a huge shift over the past few years in terms of remote working. A survey by the Global Workplace Analytics and FlexJobs found that remote work has grown 91% over the last 10 years, and various research has concluded that by 2020, half of us will be working remotely in some form.

Some companies now operate entirely remotely, with no communal office space and employees spanning multiple time zones, some companies have one or two remote team members, and some offer all employees the option to work remotely for a day or two per week.

This kind of work has a huge impact on HR, from the hiring/onboarding process to company structure to communication practices when dealing with part-time workers. While this undoubtedly means there are challenges to overcome, this ever-increasing flexible working trend isn’t going anywhere. HR leaders need to take a look at just what the gig economy means for their company, and how best to cope with the demands of short-term, flexible, and freelance workers. This can be through the increased use of performance management tools, regular team-wide video conference sessions, or revamping onboarding processes.

PEOPLE ENABLEMENT

People enablement was highlighted as one of our 2019 trends, and it’s still set to have a huge impact in 2020. This more holistic, less top-down focused approach enables employees to unleash their potential and progress in their own way.

The concept relies on three core pillars:

• Professional growth: accelerating the speed at which managers and individuals learn and grow
• Clarity and alignment: keeping everyone aligned on strategy, objectives, and process
• Value and impact: building a culture where everyone feels valued and receives recognition

By implementing all three of these things, companies can ensure their people feel in control of their work and progression, increasing overall engagement, growth, and productivity. People enablement has a major impact on the employee experience, something that helps companies outperform those with less people-focused practices.

HR CHATBOTS

The use of chatbots may already be common in many HR departments, as well as IT help and customer service type roles, but there will be a big increase in this type of communication in 2020.

Using chatbots can be an incredibly useful practice for HR. These automated conversational tools can field the low-level, FAQ inquiries, and processes such as candidate screening, and help HR free up valuable time to focus on more in-depth conversations and interactions.

Using chatbots for initial interactions also means that the average response time is quicker, considerably speeding up processes by swiftly taking care of smaller issues or queries that arise. There is also a potential for them to be used in an interview capacity to replace the traditional screening phone interview, for example. The bots can ask potential candidates some initial questions, which HR can then analyze the answers to, before deciding who to invite to interview in person.

ARTIFICIAL INTELLIGENCE

Last year, we shared that HR in 2019 would focus on more data-driven decisions, with analytics informing more and more of the work done. HR is inherently people-focused, so there’s a lot of data, and it’s key to make the most of it all so that everyone gets the best experience possible.

This still holds true for 2020 as there is an ever-growing focus on more automated approaches. Except it’s not just data analysis now. Newer practices are being introduced which increase automation across the board. Research from Gartner actually predicts that in 2020, one in five workers engaged mainly in non-routine tasks will rely on artificial intelligence to help them do their jobs.

AI will likely never entirely take over the more ‘human’ side of HR, but it will require striking the balance between human and technological processes, particularly in the recruitment phase. The idea isn’t to remove the human element but to establish a more streamlined approach where AI is used as a tool to assist with and elevate
current processes, elevating efficiency with tasks such as candidate screening, onboarding, and administrative tasks such as holiday requests, interview scheduling, and analytics.

All of these trends will likely have a big impact on the next few years in HR. However, it’s always important to focus on what works for your company and its people. Every company is unique and requires different practices. Keep in mind what works for your organization and what will help, not hinder, HR and the human connection.

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Source: Fast Company

https://www.fastcompany.com/90444541/four-ways-work-will-change-in-2020