Hot Topics in Total Rewards

• Employers avoid benefit cuts despite new cost pressures

August 11, 2022 09:00 AM Eastern Daylight Time

NEW YORK--(BUSINESS WIRE)--US employers expect health benefit cost per employee to rise 5.6% on average in 2023, according to early results from Mercer’s National Survey of Employer-Sponsored Health Plans 2022, which launched June 22 this year and remains open.

“They must manage rising health care costs while making smart decisions about how to attract and retain the workers they need. For now, we are seeing the majority of employers prioritizing attractive benefits.”

While significantly higher than the increase of 4.4% projected for 2022, the 2023 increase lags overall inflation, which is currently running at about 9%. According to Sunit Patel, Mercer’s Chief Actuary for Health and Benefits, “Because health plans typically have multi-year contracts with health care providers, we haven’t felt the full effect of price inflation in health plan cost increases yet. Rather it will be phased in over the next few years as contracts come up for renewal and providers negotiate higher reimbursement levels. Employers have a small window to get out in front of sharper increases coming in 2024 from the cumulative effect of current inflationary pressures.”

Patel also cautions that while most large, self-insured employers have a good sense of their 2023 costs at this time, many smaller, fully insured employers have not yet received renewal rates from their health plans. “Those may well come in higher as insurance carriers hedge their bets in today’s volatile health care market,” he added.

The projected increase of 5.6% reflects changes that employers plan to make to hold down cost. If they made no changes, respondents indicated that the cost for their largest medical plan would rise by an average of 7.0%.

Employers are prioritizing benefit enhancements for 2023

The survey asked employers to rate nine benefit strategies in terms of their importance over the next 3-5 years. “Enhancing benefits to improve attraction and retention” came out on top, with 84% of large employers (those with 500 or more employees) rating it important or very important. It’s an even higher priority than “monitoring and managing high-cost claimants,” which was second this year but historically tops the list.

“In today’s environment of record-breaking inflation and widespread labor shortages, employers face a really tough balancing act,” says Tracy Watts, Mercer’s National Leader of US Health Policy. “They must manage rising health care costs while making smart decisions about how to attract and retain the workers they need. For now, we are seeing the majority of employers prioritizing attractive benefits.”

Behavioral health is one benefit area where many employers are looking to expand. Nearly three fourths of large respondents (74%) say that improving access to behavioral health care will be a priority over the next few years. Examples of benefit enhancements include expanding EAP services and adding virtual behavioral health care options.

Focus on health care affordability

Another area of concern is health care affordability. Despite rising costs, the majority of employers will not take cost-saving measures that shift healthcare expense to employees, such as raising deductibles or copays. Only 36% of survey respondents are making cost-cutting changes in 2023, down from 40% in 2022 and 47% in 2021.

Further, overall, employers will not increase employees’ share of the cost of coverage in 2023. Among large employers responding to the survey, employees will be required to pick up 22% of total health plan premium costs, on average, in 2023 through paycheck deductions, unchanged from 2022 and 2021. In a survey conducted earlier this year, Mercer found that 11% of large employers will offer employees free coverage in at least one medical plan in 2023, and another 11% are still considering it.

“Healthcare affordability is a real issue for many employees, especially with inflation stressing household budgets,” said Watts. “Employers want to do what they can to keep more money in employees’ paychecks and remove cost barriers when care is needed.”

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Source:  Business Wire

https://www.businesswire.com/news/home/20220811005163/en/Health-Benefit-Cost-Growth-Will-Accelerate-to-5.6-in-2023-Mercer-Survey-Finds

Quarterly Voice of the Candidate Study Explores Recruiting Experience from the Job Seeker’s Point of View in Q1 2022

August 16, 2022 07:00 ET | Source: PandoLogic

DENVER and NEW YORK, Aug. 16, 2022 (GLOBE NEWSWIRE) -- PandoLogic, a wholly owned subsidiary of Veritone, Inc. (NASDAQ: VERI) and leading provider of artificial intelligence (AI) hiring solutions, today shared the findings of its latest Voice of the Candidate (VOC) Study. With the publication, PandoLogic revisits data from previously available VOC research and reveals the new conversations that emerged in Q1 2022.

Given the rapidly changing state of the job market over the last year, the Q1 2022 results are telling. As the Great Resignation persists even in the face of a possible economic recession, the VOC noted a rise in candidate passion and intensity, with candidates seeing themselves as empowered. Three of the five major trends captured in the VOC directly relate to how employers position openings to job seekers.

First, pay remains a significant driver and jobs with pay information in the title performed much better than those without. In addition, jobs without pay information cost 1.6 times as much per application as those with pay information. Likewise, the remote work conversation continues to increase. Similar to pay, jobs that include remote in the title convert 57 percent better, with a cost per application that is on average 5.5 times lower than those without remote listed. Finally, benefits have become increasingly important, specifically healthcare and health insurance, giving employers the opportunity to increase focus on information in job descriptions and advertising materials.

Taking a unique approach to this subject matter, PandoLogic creates the quarterly VOC in partnership with Parsons Strategic Consulting to obtain a deeper understanding of the candidate experience from the job seeker’s perspective. Using social listening technology, the VOC examines millions of public conversations about the recruiting process and then analyzes the top-mentioned emotions and sentiments.

Terry Baker, president and CEO of PandoLogic, shared, “Since we first launched the Voice of the Candidate research in 2021, PandoLogic has analyzed what candidates think about the recruiting process. The latest insights are especially telling as we’re in one of the most dynamic job markets in recent history. What employers don’t know about candidate expectations may be hurting their hiring outcomes. An effective way to improve recruiting results is to tune in to what the candidates are saying, and PandoLogic is in the unique position to provide this type of insight, given its technology and business model. It is also one reason PandoLogic has successfully driven optimized job advertising results for our clients.”

Download the Voice of the Candidate Study Q1 2022 here.

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Source: GlobalNewswire

https://www.globenewswire.com/news-release/2022/08/16/2498898/0/en/New-Research-from-PandoLogic-Finds-Pay-Scale-Transparency-and-Remote-Work-Options-Lower-Cost-of-Hiring-by-as-Much-as-5X.html

Published On August 22, 2022 - 10:47 AM
Written By Jeanne Kuang

California lawmakers this month are considering a fast food bill that would significantly shift the relationship between restaurant workers and the corporate chains whose products they sell.

If Assembly Bill 257 passes, California would be the first state to assign labor liability to fast food corporations and not just their individual franchise owners.

The bill’s provisions would let workers and the state name fast food chains as a responsible party when workers claim minimum wage violations or unpaid overtime at a franchise location.

The bill’s language also would allow a franchisee to sue a restaurant chain if their franchise contracts contain strict terms that leave them no choice but to violate labor law.

It’s part of a larger bill pushed by unions to more strictly regulate fast food businesses. AB 257 also includes a measure to create a state-run, fast food sector council to set wage and labor standards across the industry.

Last week the bill survived the “suspense file” process, where controversial bills often are quietly killed. After clearing the Senate Appropriations Committee, the bill awaits a vote on the floor. 

Gov. Gavin Newsom has not stated a position on the bill, but his Department of Finance opposes it, saying it would create “ongoing costs” and worsen delays in the state’s labor enforcement system.

If it becomes law, proponents said it could deter wage theft and other abuses in the low-wage industry. 

“How you hold the companies at the top of the food chain, who are really setting the terms and conditions of employment, responsible for the lower levels — California has been way ahead on that,” said Janice Fine, professor of labor studies and employment relations at Rutgers University. “What’s happened in California is a real effort to try to figure out the fissured economy.”

 

California fast food bill

The fast food bill is one of the most contentious measures the Legislature is considering during its final weeks in session. 

The California Chamber of Commerce and the state restaurant association have lobbied hard against it, arguing the bill would upend the franchise business model and ultimately raise costs for franchise owners and consumers. On Wednesday, a group of franchisees flooded the Capitol to oppose the bill.

The Service Employees International Union and its Fight for $15 campaign led a series of strikes this summer to rally for the bill’s passage, including an overnight rally at the Capitol this week. 

Currently most workers who allege wage theft, say, at a McDonald’s, Burger King, or a Jack in the Box can only name the owner of their specific franchise location as responsible for paying them back — even as they work under the banner of a multibillion-dollar fast food corporation. 

In other industries, California already has done some of what AB 257 proposes to do for fast food. In some cases, the state has expanded responsibility for employment conditions beyond the subcontractor or supplier level to the larger companies they do business with, even though they don’t directly employ the workers.

For instance, in 2014 the Legislature made businesses that use contract workers liable for wage theft committed by those workers’ agencies. Lawmakers later did the same for contractors in the janitorial, gardening, construction and nursing home industries.

Last year the Legislature passed a measure putting major fashion brands on the hook for wage theft by garment manufacturers in their supply chains.

 

Wage theft in fast food

Fast food is the latest industry attracting this type of regulation, and it is one of the largest and most visible. 

Restaurants such as fast-food joints, take-out businesses and cafes employed more than 700,000 workers across the state, according to June federal data. Proponents of the bill estimate 80% of the workers are Black, Latino or Asian and two-thirds are women.

SEIU and Fight for $15 say the industry is rife with labor violations. The union released a survey of 400 workers this year in which 85% said they were victims of wage theft. 

Business groups said the bill targets fast food unnecessarily. The Employment Policies Institute, a national think tank with restaurant ties, published a report this month showing the percentage of wage claims filed against this segment of business is lower than its share of the California workforce.

If approved, the proposed legislation could mark a turning point in American labor law.

Typically under the franchise model, fast food corporations strike agreements with franchisees that dictate a variety of standards for selling food under their brand — but leave wages, hours and labor conditions up to the franchisee.  

The model has provided inroads to business ownership for many minority entrepreneurs, supporters point out. 

But critics say companies like McDonald’s and Domino’s have been allowed to profit while distancing themselves from any responsibility for how restaurant employees are treated. 

 

Joint employers?

The question of franchisors’ relationship to workers remains unsettled at the federal level. Across three presidential administrations the National Labor Relations Board has gone back and forth on whether to automatically consider franchisors and franchisees “joint employers.” The courts, including the California Supreme Court, have generally rejected that idea under current laws. 

“These franchise models have been an avenue and way for companies to avoid responsibility for being employers,” said Emily Andrews, director of education, labor and worker justice at the Center for Law and Social Policy, a national, left-leaning anti-poverty organization. 

Studies have found franchisors can exert a significant amount of pressure and control over franchise business owners. 

In a paper published last year, law professors at the University of Miami and Cornell University examined 44 franchise contracts from 2016 and found that more than three-quarters gave the chain exclusive power to terminate contracts, putting a franchisee “in a position of economic dependence.” 

“Franchisees can respond to intensive franchisor monitoring and tight profit margins by unlawfully chiseling wages as the only cost variable that the franchisor does not directly monitor,” the law professors wrote.

The International Franchise Association disagrees, arguing the business model is defined by franchise owners’ independence in labor decisions. The fast food bill, they said, would reduce those owners to middle managers, and larger companies would pull back opportunities in California if they’re required to monitor labor law compliance.

“You’d be holding an entity responsible or assigning liability for things they don’t have control over,” said Jeff Hanscom, spokesman for the Washington, D.C.-based association which includes franchisors and franchisees. “You’re taking a franchise and turning it into the corporate entity.”

 

The Cheesecake Factory case

That argument holds some sway with lawmakers in the state Senate.

During a June hearing for the fast food bill before the Senate Judiciary Committee, some Democratic lawmakers questioned if an automatic expansion of liability is necessary. Sen. Bob Wieckowski, a Fremont Democrat, pointed out that under current law a judge can already find a franchisor liable for a labor violation if it’s proven on a case-by-case basis. 

Representatives for some franchisors, including McDonald’s, Jack in the Box and Burger King, did not respond to requests for comment on California’s fast food bill.

To worker advocates, extending liability is key to enforcing wage and labor laws.

Yardenna Aaron is executive director of the Maintenance Cooperation Trust Fund, a janitorial worker center that pushed for joint liability in that industry in 2015.

Prior to that law’s passage, Aaron said, contractors often closed up shop or declared bankruptcy when faced with allegations of wage theft, only to reopen under another name or business entity later.

The new law has enabled the state’s labor commissioner to issue citations against larger and more prominent companies in cases of alleged wage theft.

In a highly publicized 2018 case, the California Labor Commissioner named the Cheesecake Factory jointly responsible with a janitorial services firm, saying they owed nearly $4 million to 559 janitorial workers who cleaned eight of the chain’s Southern California restaurants. It was one of the state’s largest cases of wage theft.

The state has brought similar cases against electric car manufacturer Tesla for its contractors allegedly underpaying janitors at its San Jose factories, and e-commerce giant Amazon for a contractor allegedly failing to pay overtime to its delivery drivers.

 

The power of the purse

Labor experts said it’s too soon to tell if joint liability has made it easier for the state to recover unpaid wages. State investigations of wage theft take months. And when the state cites employers, seeking unpaid wages and penalties, employers usually appeal, setting off administrative hearing processes that can take years. 

The Cheesecake Factory case is still awaiting a hearing, four years later. Advocates expect a resolution this year, Aaron said. The Maintenance Cooperation Trust Fund represented the workers interviewed in that case; its director at the time, Lilia Garcia-Brower, is now the California State Labor Commissioner.

Officials in the labor commissioner’s office in 2020 pointed to the growing complexity of liability laws for the long delays in processing the tens of thousands of individual wage claims workers file each year. 

Still, legislative staffers predicted joint liability would “almost certainly” improve labor compliance in fast food by forcing the larger businesses to monitor the behavior of franchisees. 

Aaron said that has been evident in the janitorial industry since the 2015 law change. The worker center meets with client companies that hire janitorial contractors to educate them about labor laws. 

“We find, generally, clients want to avoid the liability that contractors would bring in terms of wage theft cases,” Aaron said. “The power of the purse is real.”

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Source: The Business Journal (TBJ)

https://thebusinessjournal.com/californias-fast-food-bill-could-link-chains-to-wage-theft-and-other-workplace-violations/

By Stephen Miller, CEBS | August 1, 2022

Slower growth, lingering inflation and still-tight labor markets are factors to weigh

Salary budgets for U.S. employees are projected to increase in 2023, mainly influenced by a labor market with more open jobs than people to fill them and inflation's impact on employees' pay expectations, despite signs that the economy is slowing.

The survey was conducted in April and May 2022. In the U.S., 1,430 organizations responded.

According to the report:

• Nearly 2 in 3 U.S. employers (64 percent) have budgeted for higher employee pay raises last year, while two-fifths (41 percent) have increased their budgets since original projections were made earlier this year.
  

• Less than half of companies (45 percent) are sticking with the pay budgets they set at the start of the year. Some companies are also making more-frequent salary increase adjustments. More than one-third (36 percent) have already increased or plan to increase how often they raise salaries. Among those respondents, the vast majority (92 percent) have or will adjust salaries twice per year.

Demand for Labor Still High, for Now

U.S. gross domestic product contracted by 1.6 percent in the first quarter of 2022 and by 0.9 percent in the second quarter, as the U.S. Federal Reserve raised interest rates to fight inflation. Two consecutive quarters of slower economic activity is the technical definition of a recession.

Although some economic sectors, such as technology, have seen lower labor demand and even workforce reductions this year, as of mid-2022 the U.S. labor market overall remained tight for many employers and concern about hiring and retaining talent is a key driver of higher pay budgets, cited by 73 percent of respondents as their top factor in the WTW survey.

While attraction and retention challenges continue to plague organizations, fewer respondents expect those difficulties to be at the same level next year: 94 percent of respondents are experiencing difficulties attracting talent this year, but only 40 percent expect difficulty in 2023.

Similarly, 89 percent of companies reported difficulty keeping workers this year, but 60 percent expect those pressures to be lower next year.

Despite concerns of an economic slowdown, however, 46 percent of respondents cited employee expectations for higher increases driven by inflation as pushing pay budgets higher for 2023.

"Compounding economic conditions and new ways of working are leading organizations to continually reassess their salary budgets to remain competitive," said Hatti Johansson, research director for Rewards Data Intelligence at WTW, referring to both inflation and the rise in remote work and hybrid work arrangements.

In addition to raising pay, many companies are taking nonmonetary actions to attract talent. For example, 69 percent of respondents have increased workplace flexibility and 19 percent are planning to do so or considering doing so in the next couple of years.

In light of both a potentially slower economy and continued high inflation and talent supply challenges, "organizations need to get more creative to address attraction and retention challenges," said Catherine Hartmann, WTW's global practice leader for work, rewards and careers.

Another View of 2023 Salary Budgets According to pay data and software firm PayScale's 2022–2023 Salary Budget Survey, U.S. respondents report, on average, a planned base salary increase of 3.8 percent in 2023. Among some industries, however, base salary increases reported by respondents may surpass 4.5 or even 5 percent for their employees. These 2023 projections follow similar increase trends from 2022, where the average overall increase came in at 3.6 percent and surpassed 5 percent in some segments. The survey was conducted May-June of 2022 with responses from 2,021 employers. The data "shows a clear response to the labor market conditions of the last year," according to PayScale's analysts. "The top reason given for higher budget increases in 2023, by 85 percent of respondents, is competition for labor."

Have Pay Pressures Peaked?

New data suggests that wage growth has remained strong through the first half of 2022. On July 29, the U.S. Bureau of Labor Statistics reported that wages and salaries for private-sector workers rose 5.7 percent for the 12-month period ending in June, up from a 3.5 percent increase a year earlier. At the end of the first quarter, the annual increase had been 5 percent.

For full-time hourly employees, the Federal Reserve Bank of Atlanta tracked 5.4 percent hourly wage growth for the 12 months through June.

Relief on rising labor costs may be in sight, however, according to Joseph Briggs, an economist at investment bank Goldman Sachs. He wrote in a July 28 brief that "we expect wage growth to slow going forward," while remaining higher than in recent years.

The firm forecasts that wage growth will slow to 4.5 percent year over year by the end of 2022 and to under 4 percent by end of 2023.

"The firmness in wage growth in 2021 and early 2022 likely partially reflected one-off factors related to the pandemic that are no longer relevant," Briggs noted. Also, the breadth of wage increases has fallen in recent months, and forward-looking wage growth expectations have started to moderate.

Struggling to Make Ends Meet

Other survey data shows that nearly 6 in 10 U.S. workers are concerned their paycheck is not enough to support themselves or their families as employees look to keep up with the rise of inflation.

In an American Staffing Association (ASA) Workplace Monitor survey, conducted June 2-6 among a total of 2,027 U.S. adults age 18 and older, 58 percent of employed U.S. adults said their paycheck was no longer enough to support themselves or their families. The number was higher for Hispanic workers (69 percent) and for parents with children under 18 (66 percent).

As the cost of living increases, workers are looking to change their circumstances. Twenty-eight percent of employed U.S. adults plan to search for a new job in the next six months, while 27 percent plan to start a second job to supplement their income and 20 percent plan to ask for a raise from their current employer.

"Workers are concerned about the effects of inflation, and they're planning on taking action," said Richard Wahlquist, ASA president and chief executive officer. "Employers need to provide competitive compensation and work flexibility, and invest in employees' professional development, if they want to keep and recruit quality talent in this labor market."

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Source: SHRM - Society for Human Resource Management

https://www.shrm.org/resourcesandtools/hr-topics/compensation/pages/employers-boost-pay-budgets-despite-recession-concerns.aspx

The Great Resignation may be waning as our survey found nearly half of workers are planning to stay at their companies in the next 12 months, though younger workers may still need to be convinced of the benefits of staying.

Paychex, in partnership with Executive Networks, conducted a 10-minute online survey with 604 full-time and part-time employees who were all living in the U.S., working at small to mid-sized businesses (20-500 employees), and aged between 18-75 years old. The research sample included 65% active workers and 35% sedentary workers. Active workers work on the front line of their business, while sedentary workers work at a desk for a majority of their workday. The survey also segmented by employees who work fully remote (19%), fully on-site (63%), and hybrid (18%).

Overall, job stability and performing meaningful work were cited as the two most important reasons employees continue to stay at their companies.

However, there were variations depending on working arrangements (remote/hybrid/on-site and active/sedentary), industry sector, and generation.

Here were some of the top findings:

• More Baby Boomers (46%) reported that flexibility in work hours or schedule would make them stay long-term at their organization than Gen X (38%), Millennials (31%), and Gen Z (24%).
• Sedentary workers (20%) were more likely to say flexibility in work environment would make them more likely to stay at their company long-term than active workers (11%).
• Active workers (66%) were less likely to feel valued for the work they do than sedentary workers (75%)

Key Findings: What’s Important to Workers and What Makes Them Stay with a Company

#1 Almost half of employees surveyed plan to stay with their current companies

The data could lead us to believe that workers are starting to see the value of staying with their current employer. Most agreed that they currently perform reasonable amounts of work (71%), are provided the tools they need to be successful (71%), and that they feel valued for the work they do (69%). Additionally, 48% of employees said they do not plan to change companies within the next 12 months.

Out of those who reported they would like to change companies in the next 12 months, Millennials (34%) and Gen Z (30%) were significantly more likely to say they would want to switch employers than Baby Boomers (15%) and Gen X (22%) .

Employers may already recognize this, as Gen Z (49%) and Millennials (36%) are more likely to report having a "stay interview" at their company compared to Gen X (21%) and Baby Boomers (12%). For the purposes of this study, a stay interview was defined as when an employer meets with an employee to gather information about what the employee values about their job and to discover what the employee believes can be improved.

When it comes to leaving their current company, those in professional and business services (41%); retail, trade, transportation, and utilities (35%); and construction (36%) were the most likely to say they’re interested in leaving in the next 12 months. Those in education and health services (16%), as well as those in financial services (18%) were the least likely to report wanting to change companies.

#2 Employees value companies that align with their personal interests and values

When asked to consider factors outside of compensation and benefits, the top-ranked reasons employees work at their companies were:

1. Job stability
2. Meaningful work
3. Passion for their field of work or industry
4. A strong support system
5. Company growth
6. Opportunities for one’s personal career growth

The lowest-ranked reasons that employees choose to stay with their company include: company culture and values, company brand and reputation, and company products/services. From this we could infer that employees are making career decisions based on their own goals and values and not those of their employer.

When asked about what perks would make employees more likely to stay long-term with their employer, respondents were most likely to rank flexibility in hours/schedules (35%), opportunities for skills development, career advancement and internal job mobility (15%) as their top picks.

However, there were some key differences when we examined these factors based on generation, industry, and working arrangements.

#3 While Baby Boomers, Gen X, and Millennials value job stability and financial wellness most when it comes to staying with their organizations, Gen Z places value on mental health benefits

Baby Boomers (32%), Gen X (35%), and Millennials (31%) were significantly more likely to say that job stability is the most important reason they work at their company than Gen Z (14%).

When asked to rank benefits (aside from higher pay), more Gen Z (23%) participants cited mental health benefits as the top benefit that would make them stay at a company long-term compared to Millennials (14%), Gen X (5%), and Baby Boomers (3%).

Baby Boomers (14%), Gen X (16%), and Millennials (14%), were also more likely to rank financial wellness benefits as their top reason for staying at a company compared to Gen Z (7%).

When asked to rank perks (aside from higher pay), more Baby Boomers (46%) reported that flexibility in work hours and scheduling would make them more likely to stay long-term at their organization than Gen X (38%), Millennials (31%), and Gen Z (24%).

#4 Failing to Consider Industry Preferences When Evaluating Employee Values May Lead to Poor Retention

Aside from job stability, employees in leisure/hospitality (20%) and education/health services (16%) were most likely to say that passion for their field and industry is the most important reason they work at their company. They were also the two industries most likely to site meaningful work as their number one reason they work at their company (20% and 25% respectively). Manufacturing (6%); retail, trade, transportation, and utilities (5%); and other services (4%) were least likely to rank passion for their field and industry as number one.

Those in financial services (29%) were most likely to cite greater company commitment to work/life balance as their top reason to stay at an organization, followed by flexible work schedules (20%), while more opportunities for skills development, career advancement, and internal job mobility came in last for this group (3%).

And, those who work in leisure/hospitality (27%), construction (24%), and professional/business services (20%) were significantly more likely to cite financial wellness benefits as the top way to encourage them stay at their employer long-term. Those who work in manufacturing (9%); education/health services (6%); and retail, trade, transportation and utilities (13%) were least likely to rank financial wellness benefits at the top.

What Employers Can Do to Retain Employees

1. Look for ways to build flexibility into work schedules. Our research shows workers highly value flexibility in when they work (working hours) rather than just where they work (remote/hybrid/on-site). Employers could start by taking regular polls to uncover employee suggestions for building schedule flexibility into all types of roles, as “flexibility” can mean different things to those in different industries. However, they should first consider what the business can accommodate and tailor the questions to what is feasible before asking an open-ended question in case you do not have the ability to meet most requests. What flexibility looks like for a healthcare worker, for example, may be different from that of an office worker. Employers can also explore a range of technology solutions which allow workers to easily indicate their scheduling preferences, see upcoming shifts and initiate shift swaps (if applicable), or request time off.
2. Survey employees to understand what benefits are of value to various segments of workers. As we saw in our research results, different generations place higher value on different benefits, so employers need to take an employee-centric approach to total rewards and benefits. And, if you have a mix of employees on-site, hybrid, or fully remote, it may be worth segmenting your survey results based on location so that you can offer a benefits package that addresses the needs across your workforce. Fully remote workers, for example, might prefer monthly remote work stipends to help them pay for home internet bills, while fully on-site workers might prefer access to financial wellness classes offered in person at the worksite.
3. Invest in a range of opportunities for skill development and provide greater access to mentoring and coaching opportunities. Workers are looking to their employer for opportunities to broaden their skills and grow their careers. Employers could start by questioning how they are approaching their investment in training and development: what is their total investment in training and development? How are they delivering this to employees? Is it aligned to their current and future strategic business priorities? Is it easily accessible and relevant?
4. Have regular check-ins or stay interviews with employees. Stay interviews are an opportunity to learn how to better engage your employees so they want to stay with your company. Rather than just interviewing employees on their way out in an exit interview, more employers need to have stay conversations with employees to receive their feedback on the workplace and what would motivate them to stay. This is especially important for younger workers who, as our research shows, are more likely than older workers to have had a stay interview, yet still want to switch companies. Employers can build regular check-ins as part of the company culture and train managers to have these on a regular basis with their teams. Stay interviews help employers learn about an employee’s career aspirations, receive feedback on what makes them want to stay with the company, and understand exactly what support and resources they need to succeed in their job.

“The future of work is creating a personalized, human experience at work. Employers should embark on active listening and conduct employee sentiment surveys, so they understand what makes an employee want to stay with their company and what changes they need to implement to increase employee retention.”

-Jeanne Meister, Executive Vice President, Executive Networks

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Source: Paychex, Inc. 

https://www.paychex.com/articles/human-resources/employee-retention-what-makes-employees-stay-leave

Does going on a vacation leave you feeling refreshed and ready to return to work, or does time off make you more likely to quit your job? Does working on vacation really make people want to quit more than those who don’t? We wanted to find out if there was any truth to the rumor that people are more likely to quit their job after vacation. We surveyed 1,000 full-time employees to get the scoop on post-vacation resignations.

How many people quit after coming back from paid time off?

Turns out there’s some truth to the rumor: Yikes. From our survey, 20% of respondents admitted they’d quit after returning from vacation, and nearly half (44%) have thought about it. Some respondents (12%) even used their vacation to look for another job.

While most people (89%) feel refreshed after taking paid time off (PTO), not everyone is ready to get back to work. In fact, 43% of respondents say they dread returning to work after time off. And a few people (11%) said they felt drained after their vacation.

How refreshed do employees feel returning to work after a vacation?

How soon do people quit after vacation?

How did you spend your summer vacation? Going on a trip, visiting friends and family, relaxing at home, or looking for a new job? While a significant number of employees think about quitting while on vacation, the majority don’t start job-seeking activities until after their time off. 

Thoughts of quitting don’t usually prompt impulsive decisions—most employees that do quit after a vacation take as long as three months (62%) to do so. Only 19% of respondents quit within a month of their vacation time. The takeaway is that while people do have time to think on vacation—thoughts which may include quitting—these don’t usually result in immediate action, meaning employers may have a chance to fix the situation before employees walk out the door. 

Most people who quit after vacation will do so within 1-3 months.

Working on vacation makes people more likely to quit

When it comes to retention, PTO policy or duration of time off matters less than whether employees work on vacation. More than half of employees (56%) stayed connected to work while on vacation. This could mean anything from checking the occasional email to joining meetings or working on tasks. 

Younger generations are the least likely to totally disconnect from work, and the most likely to stay very connected to work. And this isn’t because their employer requires them to; they may just feel like they have something to prove as a more junior-level employee. 

Which of the following best describes your relationship with work when you take paid time off?

	I totally disconnect from work — I don’t even think about work at all.	I somewhat disconnect from work — I may check my email once or twice or think about work-related problems, but I don’t take action on any work activities.	I stay somewhat connected to work — I check my email regularly but answer important messages only/limit my work activities.	I stay very connected to work — I work actively while I’m on vacation (e.g., taking meetings, creating deliverables)
Gen Z	33%	33%	22%	11%
Millennials	42%	31%	19%	7%
Gen X	49%	28%	17%	6%
Baby boomers	50%	32%	16%	2%

Working on vacation is more common for younger respondents.

Almost all of these employees (95%) did so by choice, either because they were worried about the catch up work waiting for them when they got back, or for peace of mind so they knew they weren’t missing anything important.

However, not being able to mentally disconnect from work comes at a cost. Employees who work while they’re on vacation experience increased thoughts of quitting and rates of departure than those who totally disconnect. This is especially true of those who were required to work while on PTO. 

Of those who thought about quitting after a vacation, those who stayed very connected to work while on vacation were 36% likely to actually quit, and those required to work while on vacation were 34% likely to quit. A significant portion (72%) of those who were required to work while on PTO thought about quitting while they were on vacation.

	Percentage of all respondents who thought about while quitting on vacation.	Quit rate for respondents who thought about quitting while on vacation.	Quit rate for all respondents.
Totally disconnect from work	43%	37%	26%
Somewhat disconnect from work	43%	44%	19%
Somewhat stay connected to work	45%	51%	23%
Very connected to work	52%	71%	36%

Working on vacation makes people more likely to quit after vacation.

Three demographic differences affecting likeliness to quit after vacation

While the average rate of people quitting after vacation averaged 20%, a few factors made this more or less likely, such as gender. While women and men think about quitting while on vacation at the same rates, men were more likely (+5%) to follow through and women were less likely (-4%) to quit after vacation. This makes sense when combined with the results indicating that men were already more interested in switching positions.

1. Gender

Which of the following best describes you?

	I’m actively looking for a new job.	I’m open to a new job, but not actively looking	I’m not looking to switch
Male	25%	54%	22%
Female	19%	49%	32%

Male respondents were more likely to be looking for a new job than women.

2. Age

Age also played a factor. While millennials and Gen Z were 2-5% more likely to quit after a vacation, Gen X and boomers were 9% less likely to. Older respondents were less likely to quit overall. This could be because boomers are closer to retirement. It could also be that older respondents feel greater stigma against job hopping, or that they’re more likely to be settled into careers they’re happy with rather than younger employees who are still trying to build career capital and experience.

Younger generations were more likely to be looking for or open to new jobs.

3. Caregiving responsibilities

Surprisingly, having dependents made respondents more likely to quit. Those with dependents were more likely to both think about and follow through with quitting. This may indicate that reasons for quitting have more to do with flexibility or compensation than personal reasons, such as conflicts at work.

How caregiving responsibilities affect the likelihood of quitting.

Caregivers are more likely to follow through on plans of quitting.

How employers can support employees at risk of quitting post-vacation

Employers trying to limit the likelihood of a post-vacation quit should pay close attention to demographics more at risk, such as millennials and those with dependents. Tactics such as stay interviews or even just having managers check in after a return from vacation could limit the likelihood of these groups leaving their jobs in the following months. 

Since working while on vacation seems to be a critical factor in quit rates, those who want to support boosting retention may want to create policies that prevent employees from working while on vacation.

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Source: Visier

https://www.visier.com/blog/quit-after-vacation/

By Ryan Golden

Dive Brief:

• The share of out-of-pocket healthcare costs paid by employees within employer-sponsored health plans increased from 17.4% in 2013 to 19% in 2019, and the rise of high-deductible health plans appears to be driving the trend, researchers at the Employee Benefits Research Institute said in a statement Monday.
• Researchers found that plan design played a role in whether costs increased. Those in non-high-deductible plans, such as preferred provider organizations and health maintenance organizations, saw decreased or stable costs during the same time frame. While most enrollees did not see out-of-pocket spending rise significantly, those who were high users of care and those with certain medical conditions did, EBRI said.
• Out-of-pocket spending for outpatient services grew faster than for inpatient services, while expenditures for prescription drugs declined. EBRI utilized data from the IBM Marketscan Commercial Claims and Encounters Database, encompassing more than 45 million patients.

Dive Insight:

As with many goods and services, healthcare has not been immune to inflationary pressures. U.S. health systems faced a combination of rising supply and labor expenses in recent months, according to Healthcare Dive, even as patient volumes have increased. As a result, providers are likely to pass on increased costs to commercial insurers during upcoming contract negotiations, Fierce Healthcare reported last week.

But from the employer perspective, employee benefits programs — including health benefits — remain a key component of talent management in a difficult hiring market, according to a McKinsey & Co. report from May. The consultancy also found that many employers have turned to HDHPs, among other strategies, as a way to address rising costs.

Yet increasing employee deductibles creates a “fundamental tension” between employers’ dual goals of securing workers’ well-being and controlling costs, according to EBRI.

“On the one hand, employers are more frequently implementing financial wellness programs as a means to improve their employees’ financial wellbeing,” Jake Spiegel, research associate at EBRI, said in the statement. “On the other hand, in an effort to wrangle health care cost increases, employers often turn to raising their health plan’s deductible, potentially offsetting the positive impact of any financial wellness initiatives.”

In their report, EBRI’s researchers also noted the role that health savings accounts, which may be offered in conjunction with a HDHP, may play in balancing increased out-of-pocket costs. Those enrolled in an HSA-eligible HDHP may be able to cover those costs using HSA contributions made by themselves and their employers. A previous EBRI report highlighted the role that pre-deductible coverage of chronic condition medications may play in HSA-eligible plans.

Aside from increasing patient deductibles, there are a variety of other cost-saving healthcare measures employers may seek. An executive for insurer NFP previously told HR Dive that these options can include care navigation services, virtual care options and value-based care arrangements, among others.

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Source: HR Dive

https://www.hrdive.com/news/high-deductible-plans-drive-increased-employee-out-of-pocket-spend-ebri-study/628935/

WTW survey reveals fewer employers expect broad attraction and retention challenges next year; will continue to focus on pay and employee experience

July 14, 2022

ARLINGTON, Va., July 14, 2022 (GLOBE NEWSWIRE) -- Salary budgets for U.S. employees are projected to increase in 2023, mainly influenced by a labor market with more open jobs than people to fill them. Leading global advisory, broking and solutions company WTW’s (NASDAQ: WTW) Salary Budget Planning Report found that companies are budgeting an overall average increase of 4.1% for 2023, compared with the average actual 4.0% increase in 2022. These are the largest increases since 2008.

According to the report, nearly two in three (64%) U.S. employers have budgeted for higher employee pay raises than last year, while two-fifths (41%) have increased their budgets since original projections were made earlier this year. Less than half of companies (45%) are sticking with the pay budgets they set at the start of the year. Some companies are also making more frequent salary increase adjustments. More than one-third (36%) have already increased or plan to increase how often they raise salaries. Among those respondents, the vast majority (92%) have or will adjust salaries twice per year.

Concerns over a tighter labor market seem to be the main driver for the higher budgets, with nearly three in four respondents (73%) citing this as their top factor. Additionally, 46% of respondents cited employee expectations for higher increases that are driven by inflation, and 28% adjusted their budgets in anticipation of stronger financial results.

“Compounding economic conditions and new ways of working are leading organizations to continually reassess their salary budgets to remain competitive,” said Hatti Johansson, research director, Rewards Data Intelligence, WTW. “With such a dynamic environment, it’s imperative for organizations not only to have a clear compensation strategy but also a keen understanding and appreciation of the factors that influence compensation growth. And, if an organization is planning to increase budgets, it’s best to be prepared as to how to award and communicate pay changes as quickly and effectively as possible.”

According to the survey, attraction and retention challenges continue to plague organizations, although fewer respondents expect those difficulties to be at the same level next year. Over nine in 10 respondents (94%) are experiencing difficulties attracting talent this year, but only 40% expect difficulty in 2023. Similarly, 89% of companies reported difficulty retaining workers this year, but that number is expected to drop to just under 60% next year.

In fact, many companies have taken or plan to take non-monetary actions to attract talent. For example, 69% of respondents have increased workplace flexibility, and 19% are planning or considering doing so in the next couple of years. Six in 10 respondents (59%) have placed a broader emphasis on diversity, equity and inclusion (DEI), and 24% are planning or considering doing so in the next few years. Additionally, 49% of companies continue to enhance recruitment offers with sign-on bonuses and equity/long-term incentive awards, while over 21% are planning or considering doing so in the next few years.

Efforts to retain talent are also under way. Almost three-fifths (58%) of companies have broadened their emphasis on DEI to retain more talent, and over 26% are planning or considering doing so. In addition, half (50%) have increased the flexibility for remote work, and 25% are planning or considering doing so in the future. Almost 40% have changed their compensation programs (e.g., base salary and short- and long-term incentive plans), and another 35% are planning or considering. Over 36% have made changes to improve their employees’ experience, and 45% are planning or considering doing so.

“With a possible recession looming, continued high inflation and employers grappling with talent supply challenges, organizations need to get more creative to address attraction and retention challenges,” said Catherine Hartmann, global practice leader, Work, Rewards & Careers, WTW. “The workforce is composed of a diverse employee population, each with their own unique dynamics. Employers are challenged to meet their preferences and needs while delivering on a superior employee experience for all.”

About the survey

The Salary Budget Planning Report is compiled by WTW’s Reward Data Intelligence practice. The survey was conducted in April and May 2022. Approximately 22,570 sets of responses were received from companies across 168 countries worldwide. In the U.S., 1,430 organizations responded.

About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.

Working shoulder to shoulder with our clients, we uncover opportunities for sustainable success—and provide perspective that moves you. Learn more at wtwco.com.

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Source: Willis Towers Watson Public Limited Company (WTW)

https://www.globenewswire.com/news-release/2022/07/14/2479938/0/en/Tight-labor-market-drives-U-S-employers-to-boost-2023-pay-raises.html

July 1, 2022 by Debby Routt, Forbes Councils Member, Forbes Human Resources Council

Since the pandemic started, HR professionals have had to juggle retaining their current employees while also attracting new talent. Employees have more options than ever when it comes to job choice. They’ve come to expect benefits like comprehensive healthcare plans, creative time off options and development opportunities that include job shadowing. But, while important, benefits are just one of many reasons a candidate chooses you over another company or why an employee stays at your company.

Now is the time for HR leaders to get creative and look for areas where they can make adjustments to their employee benefits. Here are some ways to help you stand out.

Behavioral health services have taken center stage recently as more employers are offering counseling as part of their employee assistance programs (EAPs). HR professionals need to start looking at the quality of these services at a much deeper level. Historically, EAPs provided high-level counseling with a predetermined number of visits per year and were bundled together with other benefits like short-term disability for a reduced price. But now, more EAPs are providing comprehensive mental health services for employees.

The adage “you get what you pay for” is true when it comes to EAPs. Organizations must ask the right questions when evaluating a potential partner. For example, ask how many certified specialists they employ and if they have a waitlist. Ask about the average wait time to get an appointment with a counselor since some counselors have long waitlists due to high demand. Check to see if they have specialists who are certified to work with your employees’ children as the pandemic has impacted our younger populations in profound ways. HR leaders should also talk with other companies that use the EAP services they are evaluating or ask for references.

It's also crucial to take the time to find a partner that really understands your organization and your employee population, instead of taking a cookie-cutter approach. You should choose an EAP that can provide you with reporting to identify the challenges your employee population is currently facing. If you have several employees who are reaching out for help with anxiety, childcare needs or financial hardships, use the data as you evaluate benefit plans to make more informed decisions about what to offer.

An EAP isn’t valuable if your employees don’t take advantage of it. All too often, HR leaders get an EAP and have extremely low utilization rates. Your EAP shouldn't be a “get it and forget it” benefit. You must put a plan in place to promote the offerings throughout the year. Find ways to make the services more attractive to your employees. If it’s not front and center, you’re wasting money.

Flexibility Is A Must For Work-Life Balance

Letting employees have time off has always been important to prevent burnout, but it's even more so now since they are juggling the challenges brought on by the pandemic. Even with increased flexibility provided by remote and hybrid work schedules, employees are finding it difficult to step away from their work even when they have days off.

Traditional PTO plans may no longer be the answer. When making changes to PTO benefits, employers need to consider their employees’ needs to help them disconnect. Sometimes it might be stepping away for a few hours to attend a PTA meeting or to attend a wellness class. Many employees have come to expect the ability to move away from the standard 9-to-5 work schedule and are wanting more flexible hours.

Work-life balance is crucial right now. If an employee doesn’t have any meetings scheduled in the afternoon and wants to join their kids on the playground for recess, they should feel empowered to do so if their job allows them to. This will help balance the times when they need to put in additional hours during evenings or weekends.

For employees to feel comfortable taking time out for themselves or their families when needed, organizations need to make sure they’re creating a culture that supports this type of flexibility. They should also try to honor their employees' PTO by minimizing incidents when they need to contact them during vacation time.

Professional Development Should Be A Two-Way Conversation

Investing in your employees has always been incredibly important to ensure they have a robust career development plan. But the Great Resignation has caused more employees to start looking for professional development opportunities as they are able to compete in more job markets due to the flexibility of remote work. If employers don't provide these opportunities, expect employees to find a company that will.

It's important that managers have a conversation with their employees to help them identify beneficial development opportunities and how they will help to support them in their career paths. Goal setting is an effective way to kick off this conversation by identifying how an employee wants to grow in their career. Managers can provide guidance on options such as on-the-job training, classes, webinars, podcasts, job shadowing and books that could be beneficial. If they know they will need to complete their professional development outside of work hours, they should have clear expectations so they can plan for the additional time commitment.

Finally, organizations should invest in good management training. Employees historically don't leave companies, but instead, leave bad managers. Now is one of the most important times to make sure that managers are really in sync with their employees so they’re able to effectively lead and manage their team. Leading in a hybrid work environment is much different than anything many managers have faced before. Make sure you are working with your leaders on how to manage in a hybrid environment. While some employees are natural people leaders, others need guidance so they can effectively deal with things like personnel issues, development plans and difficult conversations.

As employee priorities continue to shift, it's vital that companies keep pace and rethink their benefits.

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Source: Forbes

https://www.forbes.com/sites/forbeshumanresourcescouncil/2022/07/01/shifting-priorities-rethinking-employee-benefits/?sh=bb85380222ab

• Firm quantifies the "Great Resignation" and the challenges employers face attracting and retaining top talent
• Average budgeted employee salary increases reach 5.2 percent, up from 4.5 percent last year

CHICAGO, June 2, 2022 /PRNewswire  Opens in a new tab/ -- Aon plc  Opens in a new tab (NYSE: AON) reported a 41 percent spike in voluntary employee departures last year amid the "Great Resignation" in the United States, according to data from the firm's Salary Increase and Turnover Study. Aon, a leading global professional services firm, reported 21.8 percent of U.S. employees left their jobs in 2021, of which 17.2 percent departed voluntarily. In 2020, 19.7 percent left employers, of which 11.9 percent departed voluntarily.  

"The spike we've seen in voluntary departures quantifies the challenges employers face during this period we call the 'Great Resignation,'" said Michael Burke, CEO for Human Capital Solutions at Aon. "Employers must look to the underlying root cause and not merely treat the symptoms. They will need to review total rewards strategies and look at resilience, agility, wellbeing and purpose in order to retain and attract top talent in their respective industries. A tight labor market will continue to challenge employers in the near term."

Figures come from Aon's Human Capital Solutions bi-annual Salary Increase and Turnover Study, which is a global survey of nearly 2,000 employers. The report provides insights on salary increases and employee retention powered by industry-leading data and analytics that reflects how broader economic circumstances impact the talent landscape.

The study also shows:

• Average budgeted salary increases in 2022 reached 5.2 percent, up from 4.5 percent last year in the U.S. This includes merit raises and promotions.
• Forty percent of U.S. employers say they will hire aggressively in 2022, while 46 percent plan to hire at a normal pace, 13 percent will be very selective and 1 percent will freeze hiring.
• Energy (10.6 percent), construction (15 percent) and financial services (15.6 percent) had the lowest voluntary departure rates among industries measured.

The report includes measurable data samples from 10 industries, which include business consulting, construction/real estate, energy, entertainment, financial services, life sciences, manufacturing, retail/hospitality, technology and transportation.

"We use these data insights to provide advice and solutions that give employers from an array of industries the clarity and confidence needed to make better decisions to protect and grow their business," said Michael Deeks, global head of the data business for Human Capital Solutions at Aon.  "It's a hot job market out there and as a result, we are seeing turnover grow and many companies allocate more money in their salary budgets."

To learn more about the report, click here  Opens in a new tab.

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Source: Aon

https://aon.mediaroom.com/2022-06-02-Voluntary-Employee-Departures-Spike-41-Percent-Among-U-S-Businesses,-Aon-Reports