HR Dive spoke with Salary.com’s David Turetsky, who encouraged employers to speak openly with workers amid economic frustrations.

Published June 14, 2022 by Katie Clarey

The pandemic may have spurred last year’s record-high quit rates, but job seekers weren’t necessarily all motivated by health and safety concerns. Many left because of low pay.

A Pew Research Center study released in March found that 63% of those who left a job said low pay numbered among the reasons why they quit, alongside a lack of advancement opportunities (63%) and feeling disrespected at work (57%). Thirty-seven percent of respondents said low pay was a major reason why they left their jobs.

David Turetsky, VP of consulting at Salary.com, saw Pew’s findings play out in real time. “We came out of a pandemic where everyone was worried for their health. That’s part of why the Great Resignation happened,” he said. “Workers decided ‘I’m not getting paid enough to kill myself at work.’”

It appears many workers received the compensation boost they wanted by switching jobs. According to Pew, more than half of those who switched jobs said they earned more money in their new gig. A February Conference Board survey produced similar findings, revealing that a third of employees who made pandemic-era job switches made over 30% more in their new positions. A fifth landed increases of 10% to 20%. 

Workers who jumped ship weren’t the only ones to benefit from a teeming job market. At the beginning of the year, ADP Research Institute analyzed the wages of 18 million workers during the last three months of 2021. It found wage growth among existing job holders hit 5.9% in December from a year earlier — the biggest increase the firm had seen since 2014, it said. Wage gains for existing employees averaged 5.7% in the last quarter of 2021, representing an all-time high for that timeframe.

Salary.com captured organizations’ preparations for the widespread uptick in pay in a fall 2021 poll. The research revealed 52% of organizations planned to boost funding for merit increases, a large jump from the 19% of respondents that reported such plans in 2020. Organizations also communicated plans for increased bonus spending.

Meanwhile, 40% of respondents said they were incorporating premiums into base salaries, and 33% said they were providing hiring bonuses. Nearly two-thirds of those polled said they were using referral bonuses and hiring bonuses, up 24% since 2020.

Since employers reported their plans for higher salaries and alluring bonuses, however, the broader economic situation has tightened, with inflation soaring, expenses rising and preparations beginning for a potential recession. A more recent Salary.com survey revealed 98% of employers are somewhat or very concerned that rising inflation rates will erode employee compensation.

Stormy economic conditions led Turetsky back to the lesson he believes employers should learn from the latter half of 2021 and its high quit rates: “Compensation should not be the reason why people leave,” he said. The Great Resignation motivated companies to review their pay practices and policies and ensure they’re competitive and transparent.

He referenced the recent headlines heralding Microsoft’s decision to nearly double its budget for employee salary increases in an effort to retain staff. “That’s Microsoft. They can do that,” Turetsky said. “There are a lot of other organizations that can’t. They’d love to, but they can’t.” Instead, smaller organizations have to make hard decisions about how to dispense the funding they have to help employees deal with the economic conditions at hand.

Many companies are turning to compensation tools that don’t compound, Turetsky said. Instead of heightening base salary, organizations use tools like stay bonuses and lump-sum payments.

Employers need to think beyond more granular pay tactics to quell quit rates during hard economic times, especially when pay may be affected, Turetsky said. ”I’m always on the side of being more open. The more you try and hold back from employees, the more they don’t understand when you make strange policy decisions. You have to tell people why you’re doing the things you do so it makes sense to them, so they believe in your mission and so they’ll stay.”

When companies don’t communicate openly with employees, they send the message that workers aren’t mature enough to be in the know on business decisions. Turetsky noted that this frustration fuels labor organization — an effort that’s fundamentally rooted in taking power from opaque management.

“It all comes back down to how you treat employees,” Turetsky said. “And it starts from the hire: how you hire them, how you pay them, paying them fairly.”

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Source: HR Dive 

https://www.hrdive.com/news/consultant-says-shifting-market-is-pushing-pay-cultural-transparency/625395/

Published June 22, 2022 By Laurel Kalser

Dive Brief:

• Mental health coverage and telemedicine or telehealth services are among the most important benefits employers feel they can offer employees in 2022, according to the Society for Human Resource Management’s annual benefits survey released June 12. The survey was conducted in January and February and sent to U.S.-based SHRM members representing a variety of industries and sectors that range in size from two to more than 25,000 employees.
• Of the survey’s 3,129 responses, 93% said they offered telemedicine or telehealth, a 20% jump from 2019, when the category was last recorded. Similarly, respondents offering mental health coverage hit a new high of 91%, up from prior to the pandemic. “The strong prevalence of these benefits, even after businesses have returned to more normal conditions following the COVID-19 vaccine rollout,” indicates they’re likely to become “permanent fixtures,” the executive summary noted.
• Retirement savings and planning benefits were next, with 82% of employers saying they were important to offer, up from 55% in 2020/21. Most employers offered some type of retirement plan; 94% offered a traditional 401(k), 68% offered a Roth 401(k). Many employers also provided some type of employer match. Just over half (51%) said they automatically enroll new or existing employees in their company’s retirement plan, a figure that’s held steady since the pandemic’s onset.

Dive Insight:

As reflected in the survey, employer priorities continue to adapt to evolving post-pandemic needs. For example, while nearly all of employers currently offer paid vacation (99%) or sick (96%) leave, the prevalence of leave for new parents, beyond what’s required by law, returned to pre-pandemic levels. In particular, the number of organizations offering paid maternity leave dropped to 35% in 2022, down from 53% in 2020; paid paternity leave dropped to 27% in 2022, down from 44% in 2020.

The decline could be attributed to direct parental leave needs early in the pandemic, the executive summary explained. “Now that many businesses have returned to a more typical way of operating, employers seem to be dialing back on expanded parental leave opportunities,” the summary said.

Consistent with the priorities employers now place on mental health coverage, the survey revealed emerging support for mental health leave: 1 in 5 employers said they offered paid mental health days separate from regular sick leave. That’s in line with what one employment law attorney urged HR professionals June 13 at SHRM’s annual conference. 

With the stresses brought on by the pandemic, an employer should ensure that employees know it appreciates what’s going on in the world and supports their mental health, the attorney said. Employers can show support by training managers on how to respond to leave requests as well as emphasizing the importance of using inclusive language.

The survey also reflects the pandemic-triggered shifting between in-person and remote work. Hybrid work opportunities continue to be well-represented among benefit offerings, the survey found. About 2/3 of employments (63%) said they offer most of their workers the opportunity to adopt some combination of remote and in-person work. Across all organizations, 62% said they reimburse or offer a subsidy to employees for at-home office work or equipment. On average, thees employers provided about $891 to employees to cover the costs of working at home.

In developing a hybrid work model, employers need to be intentional and build trust, a global diversity, equity and inclusion strategist said during her June 13 presentation at SHRM’s annual conference. While company leaders look for models to adopt, they should keep in mind that no one size fits all, the strategist said. She outlined five questions employers should ask to structure their model, including who gets to choose in-person versus remote work and when, and how and for whom they will use management tactics like surveillance.

The possibility of remote work gives organizations access to wider talent pools, the survey’s executive summary noted. Because workers also have more options for where and when they will work, employers face a challenging talent landscape. But benefits can be instrumental in how this plays out, the summary concluded.

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Source: HR Dive

https://www.hrdive.com/news/shrm-mental-health-telehealth-benefits-are-post-pandemic-priorities/625754/

June 21, 2022 by Denise Leaser

In 2021, more than 47 million people quit their jobs, and 2022 isn’t looking much better: More than 4.5 million workers quit in March alone, a record high. As organizations seek to understand why, they are brainstorming ideas to keep employees happy. Perks like bean bag chairs and foosball tables are being replaced by high-end offerings like spa weekends, star chefs, yoga and fly-fishing trips.

But it won’t work. That’s because most employers fail to understand the root of the problem: The Great Resignation did not appear out of nowhere, and it did not start with the COVID-19 pandemic, even though it exacerbated the problem. Resignations now mirror the pre-pandemic trend that started in 2009, and American employers are going to have to retool to this new reality.

According to Harvard Business Review, the problem is the mindset of the labor market and the aging population in America. Workers are retiring in greater numbers and reconsidering their work/life balance and care roles. They are making localized switches among industries, or reshuffling, rather than exiting the labor market entirely. And, since the pandemic, they’re demonstrating a reluctance to return to in-person jobs, either from fear or the taste of flexibility they have experienced by working from home.

So, how can you know what elements of your corporate culture matter to employees—and what can you do to get it right? Using Glassdoor data, MIT Sloan/CultureX performed multi-year research project to identify the problem. The used artificial intelligence, specifically natural language understanding, to analyze the language workers used to describe their employers. Sentiment analytics revealed how positively (or negatively) employees felt about various topics regarding the corporate culture. Then, to identify which factors were most important in predicting a company’s overall culture score, they calculated each topic’s SHAP (Shapley additive explanations) value to understand the impact each feature has on a company’s overall culture rating.

The MIT Sloan/CultureX team identified 10 elements of culture that matter most to employees, but I’ve collapsed them into four areas that will be easy for any organization to understand: Meaning, Mobility, Managers and Money.

1. Meaning. Employees expect to be treated with respect and appreciation. They want to know that their work makes a difference to people and that it enriches their lives. They also want to work in a role that matches their values and builds their skills. Problem is, many employees are not in roles that match their skills or their values. Compounding that, employers are using a “warm body” approach to hire, not considering the personality traits, motivations or skills of candidates. In fact, only 16% of new hires possess the needed skills for both their current role and the future, according to Gartner.

Action: Organizations need to perform a full audit of their employees, take inventory of skills and understand, deeply, the desires and motivations of their workforce. Tools like MyInnerGenius create an unbiased profile of an employee and can suggest better roles in the organization and skills paths to accel in future roles.

2. Mobility. Employees now expect mobility and flexibility to move into different roles and to shape their workdays. But many employers do not create personalized progression plans for their employees and, as the pandemic becomes normalized, some employers are forcing employees to return to the office. Among Americans with jobs that can be done remotely, 60% say they want to work from home all or most of the time when the pandemic is over if given the choice, according to new Pew Research.

Action: Survey employees to find out if they prefer to work from home, then establish accommodations for top performers, including modifying the way work gets done or promoting employees to new roles that do not require in-office work.

3. Managers. According to the MIT Sloan/CultureX research, employees assign more credit or blame to the C-suite than to their direct boss. Nonetheless, employees expect managers to be supportive of their work and their need for purpose. They expect managers to be responsive and go to bat for them and offer encouragement. Being supportive is perhaps the most important trait to increasing engagement and retention.

Action: Managers should be assessed to determine their leadership capabilities, including their ethics and their ability to empathize. Managers should also be assessed for communication skills, engagement, coaching ability, leadership, collaborative mindset, purpose, direction and adaptability. Managers with deficits should be provided with personalized performance plans and training or reassigned to roles that do not require people management.

4. Money. Benefits are more important than salaries to most employees. Health insurance, health benefits, retirement benefits and pensions rise as top motivators for retention. And wages are important, especially in an inflationary economy. A Brookings study found that 44% of U.S. families did not earn enough to cover their living expenses.

Action: Many employees will simply quit or begin job searches before they ask for a salary increase. Don’t wait for an employee to ask for a raise; ask the employee first. Managers should proactively ask employees if they believe their compensation is commensurate with their work.

Companies that focus on these cultural priorities and treat their employees like customers and establish personalized development plans can dramatically reduce the impact of the inevitable shifts in the labor market.

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Source: Human Resource Executive

https://hrexecutive.com/here-are-4-ways-to-retain-your-best-employees/

Top concerns among Gen Zs and millennials

This year’s survey finds Gen Zs and millennials deeply concerned about the state of the world, and actively trying to balance the challenges of their everyday lives with their desire to drive societal change. They are struggling with financial concerns, while trying to invest in environmentally sustainable choices. They feel burned out, but many are taking on second jobs, while pushing for more purposeful—and more flexible—work. They press their employers to tackle climate change, particularly when it comes to efforts they can get directly involved in, but businesses may still be missing opportunities to drive deeper and broader climate action. And they have inspired organizations to take action to address workplace mental health challenges, but many don’t feel this is resulting in any tangible change for employees.

Please continue reading this article on the Deloitte web site at: https://www2.deloitte.com/global/en/pages/about-deloitte/articles/genzmillennialsurvey.html

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Source: Deloitte 

Published May 27, 2022 by Emilie Shumway

Dive Brief:

• While saving for retirement is the top financial goal for employees, 51% of workers said the pandemic somewhat or significantly increased their stress about being able to afford to retire when they wanted, according to a survey from TIAA. 
• Overall, employees said they were satisfied with their company’s retirement offerings, but they showed increased interest (54% versus 51% in 2020) in guaranteed lifetime income annuities, which only one-third of responding employers said they offered. Employers seemed to register the deficit, too; 43% of those not currently offering GLI annuities said they were extremely or very interested in them, and 38% said access to GLI annuities was the feature most lacking from their retirement plans.
• Among both workers and employers not interested in GLI annuity plans, cost was the primary reason, followed by the complicated nature of the plans. 

Dive Insight:

The pandemic increased stress generally, and it appears stress related to retirement plans was no exception. 

While the TIAA study did not investigate causes, circumstances that emerged relative to the pandemic (and other global events) may be a factor. High inflation and a struggling stock market have frightened those on the verge of retirement. A recent Pew Research survey found that 70% of Americans viewed inflation as a “very big problem” for the country, making it the top issue. It was followed by another economic concern: healthcare affordability. And of course, given the nature of the condition, anxiety caused by the pandemic may have caused more generalized anxiety. 

Guaranteed lifetime income annuities can address retirement anxiety by providing more security than other types of plans, as GLI plans can be invulnerable to inflation, market swings and other unexpected financial events. Through such plans, employees provide an initial, upfront investment and then receive set monthly payouts for life, even if they outlive the value of their investment or the economy is upended. 

However, buying into an annuity can come with a hefty price tag — often $100,000 or more for the initial investment, along with a slew of fees. Given workers’ financial demands related to everything from housing to child care to healthcare, it can be a significant task to set aside hundreds of thousands to invest in an annuity fund, even over many years. 

Still, the TIAA survey shows workers who are familiar with it are interested in the GLI concept. The number of workers interested in in-plan GLI annuities if the cost were lowered jumped from 54% to 73%, the survey showed.

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Source: HR Dive

https://www.hrdive.com/news/pandemic-increased-employee-stress-about-retirement/624454/

Comprehensive program provides associates access to free tuition to build careers in technology, supply chain, data analytics and more

MOORESVILLE, N.C., April 13, 2022 /PRNewswire/ -- Lowe's today announced a new education program to make it easier for associates to grow their careers. The new benefit gives full-time and part-time associates access to 100 percent debt-free programs, unlocking opportunities for over 300,000 eligible associates to pursue their educational and career aspirations.

In partnership with Guild, Lowe's is offering over 50 academic programs across 23 universities and learning providers in Guild's Learning Marketplace, including Historically Black Colleges and Universities (HBCUs) and Hispanic-Serving Institutions (HSIs). The free programs are designed to help associates excel in their jobs today and build toward the careers of tomorrow within Lowe's, including pathways into supply chain, logistics, data analytics, cybersecurity, technology and more.

Research conducted by Guild found that its students enrolled through employer programs similar to Lowe's are twice as likely as the average employee to receive a promotion or new role.

"At Lowe's, we believe greater access to education leads to more opportunities, and our success is intertwined with our associates' success and their ability to continuously learn," said Janice Dupré, Lowe's executive vice president of human resources. "We actively listen to our associates to identify how we can help them in the many facets of their lives. This debt-free education offering is one of the many ways we're working to help our associates reach their career potential while knocking down traditional barriers that often make it difficult for them to obtain a degree."

Lowe's new education program offers debt-free tuition assistance to associates seeking to earn undergraduate certificates or degrees, or enroll in English language learning, high school completion or college prep programs. The education benefit is designed for busy working adults. Programs include flexible classes that fit different schedules, fully covered textbooks and course fees, and one-on-one support from Guild coaches. Lowe's will continue to provide direct payments of up to $2,500 annually in tuition assistance for more than 165 additional academic programs serving associates to reduce the burden of up-front, costly tuition payments. 

Lowe's is committed to creating pathways for more people to access higher education while strengthening its pipeline of associates from all backgrounds and experiences. Academic partners in the Guild program include the University of Arizona – a Hispanic-Serving Institution – and HBCUs such as Morehouse College, North Carolina A&T State University and Paul Quinn College.

For 20 years, Lowe's has partnered with top scholarship organizations to contribute to student success. Recently, Lowe's announced a $9 million investment in select schools and scholarship programs to provide traditionally underserved students with greater access to higher education and pathways to future Lowe's employment.

"With the persistent war for talent, it's more critical than ever to invest in employees," said Rachel Carlson, Guild's CEO and co-founder. "By offering debt-free education and upskilling, Lowe's is expanding their long-term strategic commitment to providing career pathways, skills and support that every worker needs to open doors to their dreams."

Additionally, Lowe's offers a long-standing tuition reimbursement program, which reimburses associates up to $2,500 annually in education expenses. Lowe's also continues to offer Track to the Trades, a company-funded pre-apprentice certificate program to help up to 4,000 part-time and full-time associates pursue careers in the skilled trades each year. Lowe's covers 100 percent of tuition for Track to the Trade diplomas in HVAC, solar, commercial HVAC, appliance repair, multi-family facilities management, electrical and plumbing. This program supports Lowe's commitment to building a future generation of skilled trades professionals through the Generation T movement.

Kelly Pennington, a scheduling and staffing administrator at Lowe's store in Madison, Tennessee, is pursuing a bachelor's degree in behavioral science through online courses with Wilmington University. Her learning experience has inspired her to encourage others to enroll in Lowe's education programs.

"When I hit my 20 years with Lowe's, I thought, 'I think it's time to venture and go another direction.' But as I'm continuing to learn through the schooling, I could actually take this and apply it more with Lowe's," Pennington said. "Being involved in the position that I'm in now, I actually get to promote the schooling to other associates. A lot of times when I mention I'm going back to school and Lowe's pays for it, they're like, 'Really?' You kind of see them light up."

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Source: Lowes

https://corporate.lowes.com/newsroom/press-releases/lowes-launches-debt-free-education-program-more-300000-associates-04-13-22

BY WORLDATWORK STAFF | APRIL 27, 2021

Employers are diversifying their benefit offerings in 2021 with enrollment in high-deductible health plans (HDHPS) and voluntary benefits such as income product plans increasing, according to a study from benefits technology platform.

Benefitfocus Inc.’s “State of Employee Benefits 2021” report, based on 3.5 million benefit enrollments, found that:

• Employers are expanding benefit packages to address the diverse needs of a multi-generational workforce. Nearly three quarters of large employer groups offered a mix of traditional health plans (PPOs) and high-deductible health plans (HDHPs) for 2021, moving away from single health plan strategies. Voluntary benefit offerings continued to expand to supplement core coverage and provide greater flexibility and choice.
• Employee health plan premiums saw moderate growth as employers took on more of the cost burden in 2021. While employee health plan premiums saw only a slight increase from 2020 to 2021, employers are paying more as a percentage of the total premium in 2021.
• HDHPs are catching up to traditional PPOs in popularity among employees. PPOs are still the health plan of choice among employees, but HDHPs have grown in popularity across the board, with participation up 30% since 2018.
• Consumer-directed health care accounts appeal to younger employees. Since 2018, the percentage of Generation Z with a health savings account (HSA) has more than doubled. Gen Zers, Millennials and Gen Xers are upping HSA contributions by 10% or more in 2021. 
• Supplemental benefits gained significant traction among employees. Over the past four years, employee participation in hospital indemnity plans has more than doubled and increased by 13% in 2021 alone. Participation in both critical illness and accident plans has grown by 65% or more since 2018 as well.

“The State of Employee Benefits provides a clear picture of how employers maintained their strategic focus on employee engagement and controlling health care costs,” said John Thomas, chief data officer for Benefitfocus, in a press release. “It also highlights, in the midst of the COVID-19 pandemic, how employers are approaching benefit plan design, offering more consistency in workforce benefits planning and better addressing employees' total well-being.”

Marta Turba, WorldatWork’s vice president of content management, encourages employers to consider broadening their benefits offerings to help employees address COVID-exascerbated problems. That would include expanding health coverage for medical recovery from the pandemic, such as catch-up for routine services missed during the pandemic, and addressing such pandemic-related problems as obesity, depression, stress and complications because of delayed care. Also consider expanding family-related benefits, such as child and elder care-related assistance and relationship counseling.

For the report, Charleston, S.C.-based Benefitfocus aggregated, anonymized and analyzed 3.5 million actual enrollment records from nearly 350 large employer customers (1,000-plus employees).

Based on its analysis of the compiled data, the Benefitfocus report concluded: "There was a clear trend upward for expanding benefit offerings as a way to differentiate in a competitive job market leading up to 2020. If anything, employers took a more paternalistic approach in 2021, continuing to offer more benefits and absorbing health plan cost increases to keep things consistent for employees. At the same time, employees took more advantage of savings opportunities and income protection." 

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Source: WoldatWork

https://worldatwork.org/workspan/articles/study-shows-employers-expanding-benefits

by Renee Cocchi, April 18, 2022

We aren’t the same workforce we were a few years ago. Our eyes have been opened to the world of remote/hybrid work. And one thing is certain, there’s no going back. Employees have tasted the freedom and enjoy making themselves a priority. Now, employers are challenged with meeting and trying to exceed employees’ desires, to come out on top in the battle for talent.

One way to do this is by keeping up with what employees accept from you.

In its second annual study (Great expectations: A road map for making hybrid work work), Microsoft surveyed 31,000 people in 31 countries, along with an analysis of a trillion of productivity signals in Microsoft 365 and labor trends on LinkedIn.

As employers move forward in this new hybrid world, they can use these four key trends Microsoft uncovered to help steer their ships.

New priorities for employees

Employees have new priorities, and they aren’t willing to make the sacrifices they did in the past. The survey found that over half (53%) of the people are more likely to put their health and well-being ahead of their work. And if employers aren’t prioritizing their employees’ health and well-being, it’s likely their employees will fly the coup. Eighteen percent of respondents quit their job last year and 52% of Gen Z and millennials said they’ll likely get a new job next year.

But seeking new, more flexible jobs isn’t just being done by people in non-management positions. Leaders want that flexibility, too. Forty-seven percent said they’re likely to apply for a new job that’s not near their home in the next year.

Managers feel stuck in the middle

While leaders are steering the ship, it’s the managers who get to hear it from both sides. They hear from the leaders what they’re willing to give, and then they hear it from their employees what they want and expect. They’re the go between. It’s not an easy thing to deal with day in and day out. So, to keep your managers happy and keep their employees happy, managers need the power to act. If their hands are tied, frustration will set in. And most employers can’t afford to lose good managers. But it may happen because 54% said they feel leadership is out of touch with employee expectations. Another 74% said they feel they have no power or resources to make the changes needed to keep their teams happy.

Make commuting worth their while

Help employees feel connected and engaged. When employers do that, employees are more innovative and productive. Employees must know when and why they need to come into the office. If it’s just to sit there and stare at a wall, the employee feels manhandled and not valued. Bring them in for important meetings or collaboration on projects. If you make it clear, employees won’t feel so confused. The study found 38% of hybrid employees said knowing when and why they need to be in the office is their biggest challenge. And only 28% of leaders noted they created new team agreements for hybrid work. Other things the study uncovered: 43% of remote workers don’t feel included in meetings and only 27% of leaders said their company developed hybrid meeting etiquette so employees feel engaged and included.

Flexible work doesn’t mean 24/7

Microsoft reported that the average time spent in meetings for Teams users went up 252% since March 2020, and meetings spill over what’s considered the normal business hours. This includes weekends, too. Flexibility is great and allows employees to be more present in their lives outside of work. But there must be boundaries to protect employees from burnout.

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Source: HR Morning

https://www.hrmorning.com/news/hybrid-work-trends/

When a candidate proposed a lower-than-average salary, one employer was transparent that the role paid more. “The person was very surprised.”

Published April 19, 2022 by Katie Clarey

At Magoosh, making candidates a good offer is nonnegotiable. Literally. The company doesn’t allow job seekers to negotiate their salaries or benefits.

Magoosh, which provides standardized test prep, has had its no-negotiation policy in place since its founding in 2009. The practice is still standard, the company confirmed to HR Dive. Instituting the policy was a scary decision for Magoosh CEO Bhavin Parikh, he said in a 2015 blog post. But he said he believed his company would benefit from it. 

Parikh argued that the practice would eliminate friction between employees in similar roles whose earnings diverged because of negotiation. And it would reinforce the idea that compensation is merit-based, not subjective.

Parikh pointed to a third reason for nixing negotiation: It would help shrink pay inequities.

Since Magoosh’s founding, attention toward pay gaps has grown significantly. Many companies have aired intentions to fix pay gaps and to achieve pay equity. Advocates for pay equity have pushed employers to pursue measures such as disregarding salary history and expectations, publishing salary ranges, and conducting pay audits. 

Foregoing salary negotiation is a less common practice, to be sure. Only a few other companies — Reddit, for example — have publicly committed to the practice. But sources told HR Dive it can be a significant step toward equitable pay.

Magoosh: A case study in no negotiations

Behind Magoosh’s commitment to making candidates one nonnegotiable offer of employment is a compensation ecosystem it says is designed to compute fair pay for every candidate who comes on board. 

The company started by creating salary tracks for each of its departments or functions, Parikh wrote in another blog post in 2019. Each gets two tracks: One for individual contributors and another for managers. Each track contains levels that correspond to responsibility, scope and title. Increments between those levels serve as stepping stones to reward smaller advancements. The tracks ensure all workers doing the same job get the same pay, Parikh wrote.

The company uses third-party data to determine market compensation for each level within a job function. It refreshes the numbers every year in the third quarter, and if the market rates increase for companies similar to Magoosh, it provides salary boosts to its employees.

When Magoosh sets out to make a new hire, it publishes the salary range for the open role alongside the job description. It shares its no-negotiation policy early in the process, as well. 

“We realize that a no-negotiation policy can turn some folks away, especially if they erroneously believe we won’t pay a fair wage as a result. We also know that some companies use no-negotiation policies to purposefully lowball candidates,” Parikh wrote. 

The company first instituted the policy as a way to show it wouldn’t compete on salary — it was small and couldn’t afford to pay more, so it wanted candidates to choose Magoosh for its mission. But after years of growth, Parikh saw the policy differently. “I’ve realized pay and passion need not be mutually exclusive. We still use our no-negotiation policy as a way to maintain pay equity and support our Diversity, Equity, & Inclusion goals,” he wrote. “But we also want to pay competitively and want employees to feel good about their compensation.”

Negotiation and pay gaps

So how can negotiation — or the lack thereof — affect pay equity?

Recent research has highlighted disproportionate outcomes of salary negotiation in terms of gender. A study released October 2021 by researchers at the University of Southern California found that women negotiating for salary against virtual humans fared no better than men in the experiment. Forty-three percent of participants did not negotiate at all, and job seekers left 20% of value on the table.

While the study found no significant differences in the negotiating behaviors of men and women, it found that women “were willing to settle for less if they thought the environment is hostile to a woman.” “This expectation didn’t impact their final outcome when the interviewer ignored their gender, as our AI was programmed to do,” Jonathan Gratch, one of the study leaders, said in a press release. “This is consistent with the story that the problem is with the men that are interviewing the women, not the women themselves.”

Other research examined the gender-associated effects of pay negotiation for incumbent employees, as opposed to candidates. A 2021 report from LeanIn.Org and McKinsey & Co. revealed similar findings, which were based on data from more than 130 companies and 34,000 men and women. The report revealed, for instance, that women negotiated for promotions and raises as often as men but faced more pushback. Researchers at the University of California, Berkeley, found that, among 2,000 graduates of an elite U.S. business school, more women than men asked for raises and promotions, but they were turned down twice as often.

Salary negotiation has been an important issue in equal pay litigation for several years, according to Matthew Gagnon, partner at Seyfarth Shaw. 

If an employee sues an employer under the Equal Pay Act or another anti-discrimination law, the worker must identify another employee who was paid more for doing equal work. Then the burden shifts to the employer. 

The employer must then justify why the pay disparity exists. The most commonly used defense is the “factor other than sex” defense, Gagnon said in an email to HR Dive. “As the name implies, an employer just needs to show that the disparity exists due to some factor other than sex,” he said. “Negotiation is sometimes one of those factors that an employer will rely on: the pay disparity exists because one employee negotiated for a higher salary than another employee.”

Companies are still trying to get bargains and it’s unfortunate. Bargains are bad in the world of HR today. They cause problems. And they’re morally wrong.

 

David Turetsky

VP of consulting at Salary.com

Some equal pay plaintiffs have begun to challenge this defense, Gagnon said. They argue that the negotiation process itself involves gender bias. 

“Plaintiffs argue that there is a disparity in how employers treat employees during the negotiation process, often arguing that a man ended up with a higher salary because they were perceived to be a ‘better’ or ‘harder’ negotiator than a woman, solely due to gender stereotypes,” Gagnon said.

This argument has had mixed success, Gagnon noted. But most of the time, it has not been successful.

Pay equity, negotiations or no negotiations

Salary negotiation can take place without discrimination, but only if the employer has a strong policy and good tools, according to David Turetsky, VP of consulting at Salary.com.

Turetsky’s No. 1 rule of salary negotiation for employers is to avoid bargains — snagging talent for a lower price than they’re worth. “Companies are still trying to get bargains and it’s unfortunate,” Turetsky told HR Dive in an interview. “Bargains are bad in the world of HR today. They cause problems. And they’re morally wrong. It takes training. It takes leadership. And it has to come from the top. This is not an HR problem — this is a business problem.”

Companies can still negotiate if they equip candidates with information, Turetsky said. Individuals need to know the company’s salary ranges, what the job pays, and what their benefits and career path would look like.

From there, the employer can disclose the starting rate in an offer, maybe $90,000 with an upcoming bonus and benefits. The employee can ask to start at $100,000 instead, and the employer will explain how that changes the extra, based on the total budget.

“That conversation can happen,” Turetsky said. “The employer needs to have the policy and the tools for the hiring manager and the recruiter to do the right thing, so there’s no bargain, but there’s a good starting place for that person to be on.”

Compensation conversations marked by openness and honesty may surprise candidates. When Turetsky was hiring for his consultant group, he identified a wage he planned to pay all consultants. When someone came in and requested a figure that was 25% less than his selected amount, Turetsky said he wouldn’t do that, he’d pay more. “The person was very surprised.”

Even though he said he believes negotiations are still possible with good compensation architecture, Turetsky said he approves of a no-negotiation policy if it’s in the name of pay equity. In fact, he encourages more organizations to pursue pay equity policies on the whole. 

“I hope it doesn’t take regulation to make this happen. I hope organizations and their leadership are providing the guidance that we as organizations need to do the right thing for employees and potential employees,” he said. “We need to think pay equity, act pay equity. We need to treat everyone the same. Put blinders on.”

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Source: HR Dive

https://www.hrdive.com/news/for-some-employers-pay-equity-is-nonnegotiable-literally/622168/

MARCH 28, 2022 by RICHARD FRY

Women in the United States continue to earn less than men, on average. Among full-time, year-round workers in 2019, women’s median annual earnings were 82% those of men.

The gender wage gap is narrower among younger workers nationally, and the gap varies across geographical areas. In fact, in 22 of 250 U.S. metropolitan areas, women under the age of 30 earn the same amount as or more than their male counterparts, according to a new Pew Research Center analysis of Census Bureau data.

How we did this

Men in the United States have long earned more than women, on average, but this gender wage gap has slowly narrowed over time. The gap tends to be smaller among younger workers. This analysis examines the extent to which the gender wage gap among young workers also varies across metro areas.

The analysis is based on the American Community Survey (ACS), the largest household survey in the U.S., with a sample of more than 3 million addresses. It covers the topics previously covered in the long form of the decennial census. The ACS is designed to provide estimates of the size and characteristics of the nation’s resident population, which includes persons living in households and group quarters.

The specific 2015-2019 five-year ACS microdata sample used here was provided by the Integrated Public Use Microdata Series (IPUMS) from the University of Minnesota. IPUMS assigns uniform codes, to the extent possible, to data collected in the ACS.

The 2019 ACS data is the most recent available. The collection of the 2020 data was severely impacted by the COVID-19 pandemic.

Based on the 2010 census, the U.S. Office of Management and Budget delineated 384 metropolitan statistical areas. The IPUMS ACS provides information on 260 metros. As explained in the documentation for MET2013, there is an imprecise correspondence between the metro boundaries in the ACS data and the official metro area boundaries. This analysis uses information for only 250 metros because 10 metros had an insufficient number of young full-time, year-round working women living in them to provide accurate estimates.

A “full-time, year-round worker” worked at least 50 weeks in the year prior to the interview date and usually worked at least 35 hours per week. Among women workers under 30, 43% work full time, year-round.

Recent Pew Research Center analyses of the gender pay gap examine the median hourly wage of both full- and part-time workers using the Current Population Survey (CPS). The CPS does not provide information on individual metropolitan areas. The CPS and ACS provide similar estimates of the gender pay gap for the U.S. Using the CPS, the Census Bureau estimates that the gender earnings gap for full-time, year-round workers ages 15 and older was 82% for 2019, matching that derived from the ACS.

The New York, Washington, D.C., and Los Angeles metropolitan areas are among the cities where young women are earning the most relative to young men. In both the New York and Washington metro areas, young women earn 102% of what young men earn when examining median annual earnings among full-time, year-round workers. In the Los Angeles-Long Beach-Anaheim metro area, the median earnings for women and men in this age group were identical in 2019. (For data on earnings and the gender gap for 250 U.S. metropolitan areas, read this Google sheet.)

Overall, about 16% of all young women who are working full time, year-round live in the 22 metros where women are at or above wage parity with men.

There are 107 metros where young women earn between 90% and 99% of what young men earn. Nearly half (47%) of young women working full time, year-round lived in these areas in 2019.

In another 103 metros, young women earn between 80% and 89% of what men earn. These areas were home to 17% of young women who were employed full time, year-round in 2019.

And in 14 metros, young women’s earnings were between 70% and 79% those of men in 2019. About 1% of the young women’s workforce lived in these metros.

In four metro areas – Mansfield, Ohio; Odessa, Texas; Beaumont-Port Arthur, Texas; and Elkhart-Goshen, Indiana – women younger than 30 earn between 67% and 69% of what their male counterparts make. These metros account for 0.3% of the young women’s workforce. (Some 19% of young women in the workforce are employed in metros where earnings data is not available or are in nonmetropolitan areas.)

From a regional perspective, metropolitan areas in the Midwest tend to have wider gender wage gaps among young workers. Young women working full time, year-round in Midwestern metros earn about 90% of their male counterparts. In other regions, by comparison, young women earn 94% or more of what young men earn.

Nationally, women under 30 who work full time, year-round earn about 93 cents on the dollar compared with men in the same age range, measured at the median. As these women age, history suggests that they may not maintain this level of parity with their male counterparts. For example, in 2000, the typical woman age 16 to 29 working full time, year-round earned 88% of a similar young man. By 2019, when people in this group were between the ages of 35 and 48, women were earning only 80% of their male peers, on average. Earnings parity tends to be greatest in the first years after entering the labor market.

Labor economists examine earnings disparities among full-time, year-round workers in order to control for differences in part-time employment between men and women as well as attachment to the labor market. However, even among full-time, year-round workers, men and women devote different amounts of time to work. Men under 30 usually work 44 hours per week, on average, compared with 42 hours among young women.

Note: For data on earnings and the gender gap for 250 U.S. metropolitan areas, read this Google sheet.

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Source: Pew Research Center

https://www.pewresearch.org/fact-tank/2022/03/28/young-women-are-out-earning-young-men-in-several-u-s-cities/