January 17, 2023 — Scottsdale, Arizona— WorldatWork’s Pay Equity Study finds an increase in organizations acting on pay equity.

The survey revealed 70% of organizations are taking action on pay equity in 2022, a 10% increase since 2019 and a 4% increase over 2021. Only 2% of organizations reported not having pay equity on their radar. Three-quarters of organizations reported that they have been doing pay equity analysis for three years or more compared to two-thirds in 2021.

Organizations taking action on pay equity cite “it’s the right thing to do, to build/maintain a culture of trust and to remove bias against protected classes” as the main reason for doing so. The potential cost to fix pay inequities is cited as one of the largest barriers for companies that have pay equity on their radar and have not yet acted.

“Increasingly employees want more transparency on how they are being paid and why,” said Sue Holloway, CCP, CECP, compensation content director at WorldatWork. “With more pay transparency legislation being implemented, pay equity has garnered more attention from organizations.”

Organizations are increasingly concerned about the legal risk of pay inequity; since 2020 the proportion citing “mitigating legal risk” as very or extremely influential to their organization’s choice to pursue pay equity has increased by 20% to 71%.

While organizations have begun to include more types of compensation in their pay equity analyses, most organizations could improve their pay equity analysis by being more inclusive of all types of pay.

Among organizations that have a pay equity process in place:

• Nearly all include base pay in their analysis or are thinking of including it in 2023.
• More than half include or hope to soon include short-term incentive plan payments (e.g., annual bonuses, profit sharing), and sales commissions/incentive payment.
• Nearly half include or anticipate including long-term incentive plan equity/stock-based grants.
• Even the least-frequently included types of compensation, such as special one-time equity/stock-based grants are (or likely will soon be) included in pay equity analysis by more than a quarter of respondents.

“If companies conduct an analysis only on base pay, they could be leaving out important elements of total compensation. Including bonus payouts, equity grants, and other kinds of compensation results in a more holistic analysis.” – Emily Cervino, Head of Fidelity Stock Plan Services Industry Relationships and Thought Leadership

When it comes to communicating about pay equity:

• Just over one in ten share the high-level results of pay equity analysis publicly.
• Only a quarter share the high-level results with their employees.
• And only a third even share the fact that they are doing a pay equity analysis with their employees.

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Source: HRO Today

https://www.hrotoday.com/ticker/worldatwork-survey-finds-70-of-organizations-are-taking-action-on-pay-equity/

Payroll errors can cost businesses up to $705 per error

OKLAHOMA CITY--(BUSINESS WIRE)--One in five payrolls in the United States contains errors, each costing an average of $291, according to a new Ernst & Young survey. The study also shows the negative impact of traditional payroll methods where perfect payrolls often do not occur.

The average organization makes 15 corrections per payroll period, according to EY. The effects are costly: lost revenue, hours correcting errors, and potential lawsuits and fines.

“Payroll errors have consequences for employees, businesses and the broader economy,” said Chad Richison, founder, chairman and CEO of Paycom. “Organizations need to ensure their payrolls are 100% accurate and not hindering their businesses or people. With Beti, Paycom’s self-service payroll solution, employees are empowered to identify and correct errors ahead of time so everybody wins. Beti is the future of payroll.”

More than 40% of surveyed organizations facing litigation as a result of payroll errors resort to cutting jobs. More than half of those facing regulatory and compliance issues as a result of payroll errors also resort to cutting jobs. Others facing regulatory and compliance issues reported declines in employee morale (41%), fines (15%) and reputational decline (36%).

EY targeted companies with 250 to 10,000 employees and collected responses from 508 individuals who work at companies headquartered in the U.S. and work with payroll.

Survey results indicate an average 1,000-employee organization spends an aggregate of 29 workweeks fixing the most common payroll errors.

Time/attendance and expense errors were the most common payroll errors, occurring on average more than once per employee per year. Those errors cost about $250,000 per 1,000 employees, according to EY. Errors recorded include:

Payroll error category	Errors per 1,000 employees, per year	Cost per 1,000 employees, per year
Time/attendance and expense	1,139	$250,000
Vacation/PTO/sick time requests	721	$220,000
Benefits	503	$140,000
Schedule earnings and deductions	410	$135,000
W4 and tax allocation changes	229	$135,000
Direct deposit	159	$45,000

The top five most time-consuming errors to fix — time punches, expenses, uniforms charge errors, sick time not being entered and errors setting up health savings plans — take nearly 29 40-hour weeks to fix per 1,000 employees. That’s more than half a work year spent on manual processes instead of strategy to advance a business. Fixing missing and incorrect time punches was the most time consuming; companies spent 26 minutes per employee fixing these errors in the last fiscal year.

The EY report comes on the heels of a Morning Consult survey commissioned by Paycom showing payroll errors cause nearly 1 in 5 American adults to take drastic actions and nearly 60% would have difficulty paying bills and making purchases if just $100 were missing from their check. The good news: Outdated payroll and related problems are easily fixable. For example, Paycom’s Beti guides employees to find and fix payroll errors before submission.

More information on the EY report can be found here.

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Source: Business Wire

https://www.businesswire.com/news/home/20221222005093/en/EY-survey-Payroll-errors-average-291-each-impacting-the-economy

Published Jan. 10, 2023 | Lindsey Wilkinson 

Dive Brief:

• Roger Lee and Teddy Sherrill have launched a new website, Comprehensive.io, that tracks and publishes tech salary ranges daily to advance pay transparency and eliminate pay inequity. Lee will serve as CEO and Sherrill as CTO.
• “For companies: you can look up the salary ranges that similar companies are posting for similar roles,” a Friday LinkedIn post from Comprehensive.io said. “If you’re not complying with the pay transparency law yet, we hope this data can help you figure out what salary range to use.”
• In order to provide accurate information to users, Comprehensive.io aggregates job posts from over 700 tech companies, totaling more than 53,000 job postings, and extracts the salary ranges daily, according to the website.

Dive Insight:

Starting Jan. 1, California required employers to include salary ranges on job postings. A similar law went into effect in New York City last year. As transparency laws become more common, business leaders and employees alike can use the increased visibility to their advantage. 

In addition to tracking salary ranges, Comprehensive.io provides users with pay transparency compliance rates for California and New York City. 

Compliance rates are calculated by dividing the number of companies that include salary ranges in job posts by the total number of companies required to be compliant per relevant location, according to Comprehensive.io. 

The California compliance rate sits below half at nearly 42%, while New York City’s is nearly two-thirds, according to Comprehensive.io.

A company is considered compliant if the majority of jobs posted on its career page in the relevant location contain a salary range.

The website also highlights how employers seem to test the limits of the transparency laws’ “in good faith” requirement. 

Tesla sits atop the list of companies with the highest salary range for senior software engineers, with a salary range of $83,000 to $418,000, according to the website. Snowflake is second with a salary range of $214,000 to $328,000 for senior software engineers, according to Comprehensive.io. 

Before working on Comprehensive.io, Sherrill was CTO at Restaurant Brands International, where he created a TypeScript codebase for restaurant apps including Burger King, Popeyes and Tim Hortons, according to his LinkedIn. Co-founder Roger Lee created Layoffs.fyi during COVID-19 to track tech layoffs and co-founded Human Interest, a digital 401(k) provider for businesses, in 2015, according to his LinkedIn.

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Source: HR Dive

https://www.hrdive.com/news/pay-transparency-tracker-California-NYC/640103/

Juliana Kaplan | Jan 5, 2023, 7:00 AM

The Federal Trade Commission wants to make sure your boss can't force you to sign away your rights to work at a similar company — or even start your own business.

Under a new proposed rule, the FTC would ban employers from saddling workers with noncompete agreements that prohibit them from working at competitors, or starting similar businesses. The Commission argues that noncompetes are an unfair method of competition, violating the Federal Trade Commission Act — and their ban would broaden opportunities for American workers, putting almost $300 billion more in their pockets annually.

"Why are we doing this? Basically, in short, there's a whole raft of economic evidence that now documents the ways in which these noncompete clauses undermine competition and competitive conditions," FTC chair Lina Khan said. 

Theoretically, noncompetes are meant to stop primarily high-level employees from jumping ship to other companies, bringing proprietary information and other knowledge with them.

But, in practice, noncompetes are more sweeping. Over 30 million workers are made to sign noncompetes, according to the National Employment Law Project, and over a third of those workers are asked to sign the agreements after they've already accepted a job. In some cases, workers can't start their own businesses similar to the ones they're working in.

"If you're a phlebotomist or a journalist and you think that you can't practice your trade in the area in which you work for a long period of time, that's still significantly chilling. It could still mean that you don't match with the optimal job that you want," Elizabeth Wilkins, director of the office of policy planning at the FTC, said. "You can't get a raise, and you can't ask for the kinds of things that you might be able to ask for if you could get a better job."

Agreements are sometimes foisted upon low-wage workers, preventing them from jumping ship to a different restaurant or retail store offering higher pay. Among workplaces paying an average of less than $13 an hour, 29% have noncompetes for all workers, according to a report from the left-leaning Economic Policy Institute.

One famous example of noncompetes: Stopping sandwich sales. In Illinois, sandwich chain Jimmy John's settled a lawsuit from the state's attorney general in 2016, and said it would not enforce noncompetes on its workers. Workers had been banned from working at any business within two or three miles of a Jimmy John's that made over 10% of its revenue from selling "submarine, hero-type, deli-style, pita, and/or wrapped or rolled sandwiches" for two years. 

The White House has already taken aim at noncompetes as a barrier to competition. President Joe Biden signed an executive order last summer encouraging the FTC to ban or limit the agreements. Now, the FTC is doing just that, with its proposed rule outlawing employers from entering into, maintaining, or making it seem as though a worker is subject to a noncompete. Independent contractors and unpaid workers would be subject to the rule. Under it, employers would have to rescind current noncompetes and let workers know they're doing so. 

The public will have 60 days to submit comments on the proposed rule, which the FTC will then review and potentially incorporate into a final rule.

Anecdotally, some businesses have recently been more dogged in enforcing noncompetes amidst labor shortages in attempt to keep workers. The rule is likely to attract ire from businesses which deploy noncompetes.

Crucially, noncompetes are one mechanism for maintaining what's called monopsony power — which means that, due to a lack of competition, employers have more power over the labor market, and the ability to do things like set wages at lower levels than a more competitive market would create. 

The Treasury Department previously found that wages are 15% to 20% lower currently than they would be in a perfectly competitive labor market, showcasing the monopsony power employers still hold. One reason for those suppressed wages, according to Treasury: Noncompetes. 

"If this rule were to be finalized and go into effect, workers that are currently stuck in place, effectively, would now be able to freely move to another job," Khan said, adding: "I would think that would basically force employers to compete more vigorously over workers in ways that should lead to higher wages. That should lead to improved working conditions."

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Source: Business Insider

https://www.businessinsider.com/ftc-wants-ban-noncompete-agreements-workers-make-300-billion-more-2023-1

By Rebecca (Becky) Burton and Peter Kim | December 1, 2022

Equity-focused increases drive overall non-employee director compensation growth

Companies remain vigilant in their pursuit of balanced yet attractive pay programs amid a turbulent global economy. WTW’s Global Executive Compensation Analysis Team (GECAT) has completed its annual S&P 500 year-over-year director pay program analysis comparing results between 2022 and 2021 proxy data. Total pay for non-employee directors continues to grow at a modest but fixed rate led by a particular focus on equity.

More than half of companies (55%) disclosed pay program changes in 2022, compared with 39% of companies reporting changes in the prior year, reflecting a return to pre-pandemic prevalence. Approximately one-third of companies (34%) increased the value of their annual equity grant, while just under one-fourth (23%) of companies increased their annual cash retainer. Only 16% of companies adjusted their non-core pay elements.

The combination of cash and equity changes has pushed pay levels to a new milestone in the history of GECAT’s annual study, and median total direct compensation (TDC) now rests at $300,000 (a rise from $290,035). Additionally, in what appears to be an acknowledgement of increased public interest in diversity and representation, the gender landscape has shifted from 76% male/24% female in 2018 to 70% male/30% female in 2022.

The median annual cash retainer remained steady at $100,000.

68% of companies deliver all or a portion of annual equity value through restricted stock or restricted stock units, up from 67%

55% of companies made changes to their pay programs

58% of S&P 500 companies separate the roles of COB and chief executive officer (CEO)

Specific key findings include:

• Similar to the prior year, the median value of most individual cash components remained the same. Meanwhile annual stock compensation and TDC median values each increased 3%. Consequently, the pay mix for non-employee board members shifted to 61% in equity and 39% in cash (previously 60% in equity and 40% in cash).
• Shifts in cash compensation include the prevalence of board meeting fees declining by two percentage points to 4% and the prevalence of committee per-meeting fees declining by three percentage points to 5%. The median value of board meeting fees remained at $2,000, while committee per-meeting fees decreased from $2,000 to $1,500 (–25%). In contrast, additional committee chair retainer median values rose 17% (from $15,000 to $17,500).
• Median annual equity values continued upward across all vehicles, pushing overall pay mix more in favor of equity compensation. The median value increased 12% for stock options (from $89,167 to $99,955), 3% for deferred and phantom stock (from $165,047 to $170,000), 3% for restricted stock (from $170,043 to $175,055), and 4% for common stock (from $160,018 to $166,258). The number of companies granting deferred/phantom stock decreased one percentage point (to 17%), while the number of companies granting restricted stock increased one percentage point (to 68%). One-time initial stock grant prevalence remained at 9%, while the value at the median increased 18% from $170,000 to $200,000.
• Pay for board leadership roles outpaced TDC increases during the past fiscal year. Additional non-executive chair of the board (COB) pay rose 6% at the median (from $155,000 to $165,000), while additional lead independent director pay leapt 14% at the median (from $35,000 to $40,000). When compared with 2019, these values reflect an overall median increase of just 3% (from $159,959 to $165,000) for COBs and 33% (from $30,000 to $40,000) for lead directors.

• Will the utilization of equity continue be favored in lieu of cash, or will companies return their attention to include cash going forward?

Download the report

Title	File Type	File Size
S&P 500 director pay trends - Dec 2022 (EPM 1 Dec 2022)	PDF	.8 MB

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Source: WTW

https://www.wtwco.com/en-US/Insights/2022/12/2022-director-compensation-trends-at-S-P-500-companies

Workers left an estimated 28% of PTO unused in 2019, according to Sorbet. This year, that share jumped to 55%.

Published Dec. 22, 2022 Ryan Golden

The pandemic disrupted employers’ paid time off policies, but two years later, a recently published study shows the problem may have only grown worse.

Results from a July survey of U.S. adults by PTO solutions provider Sorbet found that 55% of PTO went unused by employees, compared to 28% in 2019. In all, the company said 57% of workers left PTO on the table this year, compared to 37% in 2019.

That unused PTO translated into a real monetary cost for workers, too. Sorbet estimated that the average employee held $3,000 in unused accrued PTO.

“We tend to think of PTO in terms of time, [but] people often don’t realize is that there’s a dollar and cents implication in your compensation when you accrue PTO,” Veetahl Eilat-Raichel, Sorbet’s CEO, said in an interview. “And when you don’t take it, you essentially end up with a hard-earned portion of your compensation locked up and unavailable to you.”

The vendor’s findings seem to mesh with those of other organizations. In August, Eagle Hill Consulting announced survey results that showed 42% of U.S. workers had not taken a vacation in the past year, though not all workers in the cohort reported having access to PTO.

The impact of flexible work

More than two years after COVID-19 created shutdowns and wreaked havoc on employers’ accrual systems, Eilat-Raichel said employers still have difficult questions to consider with respect to how their organizations handle time off, such as whether to adopt policies that group all PTO into one bucket and allow workers agency to choose how to use their time, or create separate buckets.

But as far as employees’ lack of willingness to take time off, the pandemic may have only highlighted a pre-existing problem. “Partially, this trend of not taking time off is deeply rooted in culture,” Eilat-Raichel said. “It has to do with the fear of the optics of it [and] being seen as unprofessional or less committed.”

Employees felt even less legitimacy to take time off with the advent of remote work, she added, because of the ways in which life activities and events bled into the work day.

Few trends are perhaps as reflective of this sentiment as the “workcation,” described in a March BBC article as a trend in which employees who are able to work from anywhere combine elements of a vacation with a workday in an exotic locale.

As excited as employees may be at the thought of cliff diving in between days spent working on a laptop, a recent Visier survey found that employees who worked while on vacation were more likely to quit their jobs than those who disconnected. The firm also found in a separate 2021 survey that one-third of employees felt pressured to check in with their jobs during vacation — while many respondents described vacation as a mere temporary relief from burnout.

What can HR do?

HR cannot solve the unused PTO problem by itself, Eilat-Raichel said. Instead, departments will need to work with leadership and management to address the cultural component involved. That could start with a baseline of ensuring employees have the time they need to take care of themselves, and then ensuring that leaders model the behavior they want to see from workers.

“If the general sentiment is that you need to always be on in order to perform, that’s not going to work,” Eilat-Raichel said.

Having access to the right data also may help. Eilat-Raichel said she is seeing employers track PTO use and include it as part of employees’ performance reviews so that managers can follow up on the subject.

Employers also may need to be aware of the inequities inherent in PTO availability and use. Sorbet, for instance, found that male employees received 10% more PTO days on average than women, and that men took 33% more days off than women.

Since the start of the pandemic, employers have experimented with enhanced PTO policies on a small scale. Google announced in February that it would implement a minimum of 20 vacation days for employees alongside expanded caregiving leaves. Others, like Hootsuite, have taken companywide weeks off with the aim of addressing burnout and mental health issues.

PTO can be an expensive and difficult benefit to administer, but the fact that workers let their time off go underutilized and unused “almost does the exact opposite of what PTO was originally intended to do,” Eilat-Raichal said. “There’s so much to be unlocked by this incredible benefit that you already have.”

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Source: HR Dive

https://www.hrdive.com/news/employers-unused-pto-problem-may-be-getting-even-worse/639436/

One advocate says reduced-hour weeks could become the norm in the next decade.

Published Dec. 21, 2022 By Ginger Christ 

It’s often said that one of the silver linings of the COVID-19 pandemic is the reshuffling of priorities. As people reflect on what matters most, they’ve put more value on a work-life balance and on personal time to spend with loved ones or on hobbies. 

“There is more to life than just slogging for hours and hours on end. I think the 21st century, the ‘quiet quitting,’ the Great Resignation, they represent that the working class, the workers, have decided they want to have quality, meaningful work they value, but they also have things they want to do outside of work,” said 4 Day Week Global Managing Director and Co-founder Charlotte Lockhart. 

Lockhart’s not-for-profit launched in 2019 after news spread about a successful trial the previous year at New-Zealand-based estate planning company Perpetual Guardian, a company co-founded by Lockhart’s 4 Day Week Global colleague Andrew Barnes.

Since then, 4 Day Week Global has led more than 250 companies through pilot programs on shortened weeks. The latest cohort of companies included 33 businesses, most of which were in the U.S. or Ireland or were fully remote. Of those, none said they planned to return to a five-day week after the six-month pilot ended, a report released Nov. 30 found. Companies reported average revenue gains of 38% compared to the previous year and rated productivity at a 7.7 out of 10 during the trial. 

On the employee side, about 97% said they wanted to continue with shortened weeks, and 70% said they would need to receive 10% to 50% more pay to work at a job with a five-day workweek, the report found. 

“The four-day week has been transformative for our business and our people. Staff are more focused, more engaged and more dedicated, helping us hit our goals better than before. Greater employee retention and faster hiring has been surprisingly powerful in driving improved business outcomes, too,” Jon Leland, chief strategy officer at Kickstarter, said in a news release about the pilot program. “We’re achieving more as an organization, while giving people time to start new creative projects, rest and be with their families. It’s a true win-win.”

Lockhart said there’s been a “real shift since the pandemic” on companies’ interest in shortening the workweek. 

“Prior to the pandemic, we really did have to explain to people all of the benefits that are there. Now, it’s about the how. We shifted from why to how,” Lockhart told HR Dive. 

Software company Buffer did two different consecutive trials on four-day workweeks starting in May 2020 as a way to give employees more flexibility. The company’s former Director of People Nicole Miller said, “The four-day workweek resulted in sustained productivity levels and a better sense of work-life balance.” 

Buffer has Fridays as the default day off, which employees may use as overflow days when needed to catch up on work. Employees still get paid the same as when they were working five days per week. 

Umber Bhatti, a content strategist at Buffer, said the schedule change initially took some adjustment. 

“It was strange when Thursday rolled around, and people would say ‘have a great weekend’ in Slack. I kept forgetting that meetings couldn’t be scheduled on Fridays and end-of-week deadlines needed to be met by Thursday. There was even a bit of anxiety on my part as I wondered if the work was really doable in just four days,” Bhatti said. “But gradually, I became confident that this schedule was actually realistic.” 

As more companies normalize reducing the time on the clock, Lockhart sees the four-day workweek movement making big strides in the coming years. 

“There are some real conversations being had not just by companies but also by governments in some shape or form, whether they be national or local. I think we’ve got to the point now where some form of reduced-hours working will be the norm in the next decade,” Lockhart told HR Dive.

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Source: HR Dive 

https://www.hrdive.com/news/companies-clocking-in-on-four-day-workweeks/639364/

ARLINGTON, VA, December 13, 2022 — Employers in North America need to reshape their performance management efforts and pay-for-performance programs to give them a much-needed boost, according to a survey of over 800 global organizations by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. The survey revealed similar conclusions worldwide.

The survey found just one in four North America employers (26%) reported being effective at both managing and paying for performance. Additionally, the gap between the priorities for performance management and delivering on those objectives is wide. For example, more than nine in 10 North America respondents (93%) cited driving organization performance as a key objective for performance management, yet less than half (44%) said their performance management program is meeting that objective. Similarly, nearly three in four (72%) said supporting the career development of their employees is a primary objective, but only 31% said their performance management program was meeting that objective.

North America respondents also had mixed views on the effectiveness of managers in evaluating performance and differentiating pay. Less than half (49%) agree that managers at their organizations are effective at assessing the performance of their direct reports. A similar number — 46% — consider their managers effective at differentiating their direct reports’ performance. Further, only one in three organizations indicates its employees feel their performance is evaluated fairly. Interestingly, despite the rapid increase in remote and hybrid working models, only one in six employers (16%) reports having altered its performance management approach to align with such models.

“Employers have their work cut out to raise the bar on their performance management programs. Many recognize that their programs have not kept up with the changes due to the pandemic and tight labor market, yet they have not taken action. Ideally, employers will reshape their programs to correspond with new work styles and employee career aspirations and provide a better employee experience,” said Amy Sung, Work & Rewards global growth leader, WTW.

While most employers recognize their programs are falling short of expectations, the survey found that North America employers already have several initiatives in place or are planning or considering enhancing their performance management and pay-for-performance programs:

• Three in 10 respondents (34%) have strengthened the link between performance management and career development; another 60% are planning or considering doing so.
• Over half of employers (54%) currently ensure ongoing and meaningful performance dialogue between managers and employees in a remote/hybrid working environment; another 39% are planning or considering taking actions to ensure meaningful dialogue.
• Only 17% of employers have improved employees’ understanding of how their performance is evaluated, but 70% are planning to improve employee understanding.
• Nearly one in four respondents (23%) has improved the employee and manager experience, but 64% are planning or considering ways to improve the experience.

Employers that make the effort to improve their programs are likely to reap financial benefits. The study found that companies using performance management programs effectively are one and a half times as likely to report financially outperforming their industry peers and one and a quarter times as likely to report having higher employee productivity than their peers. Companies that are effectively using pay programs to drive individual and team performance are also more likely to outperform their peers (1.2 times) and report higher employee productivity (1.4 times) than their peers.

“Our results show that performance management can be a key competitive differentiator as can pay-for-performance programs. While most organizations are currently planning for larger increases in 2023, the need to demonstrate to employees how their pay is tied to performance has never been greater,” said Alex Weisgerber, senior director, Work & Rewards, WTW.

About the survey

A total of 837 organizations worldwide, including 150 North America employers, participated in the 2022 Performance Reset Survey. The survey was conducted during September and October 2022. North America respondents employ more than 2.7 million workers.

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Source: WTW (NASDAQ: WTW)

https://www.wtwco.com/en-US/News/2022/12/employers-are-reshaping-performance-management-and-pay-programs

By Kathryn Mayer on December 5, 2022

Compensation is always an important part of the employer arsenal, but in 2023, that might be more true than ever. Fueled by a confluence of factors—rising inflation and changing employee expectations among them—HR leaders are planning to turn to larger-than-usual salary increases in 2023, data indicates.

But reevaluating employee salaries isn’t the only thing HR and other company leaders need to think about in the coming year. Here is what to know about salary strategies as 2023 approaches.

Next year looks to be a “banner year” for salary increases. A report from Salary.com, which surveyed 1,000 HR professionals, finds that nearly half of U.S. employers plan higher year-over-year budget increases next year compared to 2022. The long-predominant 3% raise, which started its decline last year, has been replaced by a median raise of 4% across all employee categories, the survey finds. And a quarter of employers plan to give increases in the range of 5%–7% in 2023.

“2023 promises to be another banner year for employees seeking salary increases,” says Chris Fusco, senior vice president of compensation at Salary.com. That’s a far cry from just a couple of years ago. When the pandemic began in 2020, Fusco adds, just under 10% of employers planned a higher salary budget increase than in the prior year.

Other reports are finding similar results: New Willis Towers Watson data finds that salary boosts are forecast to be 4.6% in 2023, up from a mid-year estimate of 4.1%. And compensation consultancy Pearl Meyer data finds that 40% of business and HR leaders expect to provide higher salary increases next year than in 2022.

Rising inflation—and talent wars—are driving the trend of higher salaries. Not one but two factors are helping to fuel higher salaries in 2023. Inflation has soared over the past year, causing employees to shell out more for their groceries, gas, housing, medical costs and more. Although inflation has fallen a bit in the last month from 40-year-highs (inflation jumped 7.7% in October versus a year ago, according to the latest cost-of-living index), costs are still hitting workers hard and resulting in a dive in their financial confidence. With employees struggling, many employers are responding. Gartner, for instance, found that 63% of executives plan to make compensation adjustments in response to high inflation.

Plus, a competitive job market is making it all the more imperative for employers to rethink salaries, as well as benefits, to not only entice workers to join their ranks, but sway them to stay, experts say. A survey from human resources consulting firm Mercer finds that more than two-thirds of U.S. employers say they are looking to enhance their health and benefits offerings next year in order to attract and retain talent. Better healthcare access, more affordable medical care and increased family-friendly benefits are all on tap, Mercer found.

Salary transparency laws are here. Pay transparency laws are taking effect throughout the country—from New York City to Colorado and, starting Jan. 1, California. It’s a big shift that has big implications for employers in those areas—and elsewhere.

One thing HR leaders should keep in mind about the new rules? Posting broad salary ranges in response to the law rather than good faith estimates—say, a salary range that is $75,000-$250,000—is likely going to hurt employers by not only opening an employer up to city or state penalties, but also by deterring potential candidates. “This is forcing organizations to put out one of the things that really builds trust, and that’s transparency around pay,” says Tony Guadagni, senior principal in the Gartner HR practice. “If done right, it could be a really positive thing, a boon for organizations.”

Bonuses may be an even bigger part of the equation. What’s a hot job market without salary increases, benefits enhancements and bonuses? More employers say they’re offering, or considering offering, bonuses to employees to both reward workers and help them with rising expenses. According to Pearl Meyer, 5% to 20% have increased or plan to increase competitive positioning for one or more pay components, like base salary, cash bonuses or equity-based incentives.

Compensation attention should be focused on both new hires and current employees. Many employers are upping the ante for potential hires, offering large paydays. A survey of more than 635 workers and 650 hiring managers by software firm Capterra, for example, finds that companies are increasing pay for new hires: 65% of hiring managers say starting salaries and wages at their organization are higher than usual right now due to inflation and talent shortages. On average, new hire pay is 9% higher than usual. But, some analysts warn, efforts to woo candidates could be to the chagrin of current employees, many of whom are suffering from financial stress as they reel from the soaring cost-of-living and seek help from employers in the form of compensation increases.

Though a focus on competitive pay for new hires “solves one problem—filling important job openings,” says Brian Westfall, principal HR analyst with Capterra, it’s also creating pay discrepancies with tenured employees.

“That’s causing tension. Inflation has already left workers feeling slighted about the reduced purchasing power of their paychecks,” he says. “The fact that new hires are getting higher wages and salaries right now feels like adding insult to injury.”

Westfall recommends that HR leaders audit compensation frequently to identify glaring discrepancies between new and existing employees. “You may not be able to increase salaries and fix every discrepancy you find, but hopefully you can close the gap in the worst cases,” he says.

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Source: Human Resource Executive

https://hrexecutive.com/what-to-know-about-salary-trends-in-2023/

By Phil Albinus on December 16, 2022

Today’s healthcare system is failing blue-collar workers who deal with chronic diseases, creating unnecessary “barriers” that are worsening employee health.

So says George Brown, director of Retro Health, the onsite clinics created by beverage distributor L&F Distributors, which provides medical testing and consultation to L&F’s 1,200 employees and their dependents in Texas and New Mexico. 

L&F employees, many of whom drive delivery trucks or move cases of beer in a warehouse, told their supervisors and HR leaders that time and money prevent them from accessing care to control issues like weight, diabetes, high cholesterol, hypertension and more.

They typically say “I’ve got to clock out, drive across town and see a doctor. I’m going to sit there for a couple of hours in the waiting room and then see the doctor for maybe 10 minutes or probably less,” explains Brown. 

L&F executives took a two-pronged approach to provide more attentive medical care to their employees while reducing their visits to emergency departments. In 2017, the employer built nine onsite medical offices inside their distribution centers and a year later it provided employees with health solution provider b.well Connected Health’s platform, a suite of mobile tools through which employees can store medical records, co-pay and insurance information, and receive healthcare advice.

With this one-two approach, the beverage distributor saw ED visits slashed by 69%, overall per-member, per-month health costs reduced by 22%, and utilization of the onsite clinics increased by 57% in one year. (A recent UnitedHealth Group study found that an ED visit costs around $2,200 on average, and about two-thirds of the nation’s roughly 27 million annual ED visits are avoidable.)

For Brown, a major driver of the success comes down to the employee adoption rate of the b.well solution. So far, 90% of employees have registered for the tool, and more than 60% have used it on a regular basis since its introduction in 2018. And during the early days of COVID, the b.well app was HR’s primary form of communication for employees to learn about prevention information and pandemic updates. 

b.well describes its platform as a digital health management tool that combines employees’ medical history gathered from their physicians and caregivers to share this information with the employees’ current and future medical professionals for a holistic view of their health. The solution also gives employers data analysis of the workforce to provide a “snapshot” of employee health and wellness without violating the end users’ HIPAA rights, says Heather Crosby, director of clinical programs for b.well.

In addition to improving employee health, the app and the rollout of onsite clinics have also helped with the beverage distributor’s employee engagement. Brown says that beverage distributors typically experience a high worker turnover rate but resignations have lessened since it implemented the b.well app and services from the onsite clinics, suggesting that the focus on health is impacting more than just employees’ physical wellbeing. [Employee engagement will be a key topic at the 2023 HR Tech Virtual Conference from Feb. 28 to March 2.]

“They’re living healthier lives. We’re saving money, we’re able to share those cost savings back with the employees by keeping their premiums and their deductibles low,” says Brown. “It just becomes this flywheel where everybody wins.” 

At first, some L&F managers and executives doubted that its workers would download and use a health app on their mobile devices. “We were told when we started this that these are blue-collar guys and they don’t like technology,” says Brown. “That’s complete B.S. because if it’s done really well and it’s useful and helpful, they’ll use it.”

“They won’t use bad technology,” he adds. “They’ll use really good and helpful technology.”

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Source: Human Resource Executive 

https://hrexecutive.com/how-one-beverage-distributor-tackled-chronic-employee-illness/?oly_enc_id=1127F6638590B7V