Since Covid-19, the workplace culture has shifted, and employees at record numbers are pursuing remote work opportunities. According to a survey completed by FlexJobs in March of 2022, 77% of its respondents chose remote work as the second highest priority for their total compensation package. The popularity, however, is not shared by the employer community, who often see remote work as a drawback to enhancing work group dynamics. Most recently, a number of articles and studies have also pointed out that the popularity of remote work arrangments and their benefit may impact men and women differently.
FlexJobs surveyed more than 2,100 people between March and April 2021 to gain insight into these new perspectives. These respondents either worked or were still working remotely due to the pandemic.
Among those respondents, 550 were men, and 1600 were women, and while males and females share some similarities in their remote work experiences, some differences were also noted. Among a number of findings, females were more likely to view remote work as a greater necessity than men.
From Positive
Given these differences in opinion, employers may want to review their plans and incorporate their policies’ impact, how they are likely to be interpreted between men and women, and how they may impact the company’s pay strategy.
Compensation Strategies for a remote workforce
As remote work becomes more normalized, employers should consider adjusting their compensation strategy. Addressing remote workers’ pay combats pay equities issues that may arise where employees are over/under-compensated. In addition, recruitment and hiring may become difficult depending on the region where the applicant lives.
There are several strategies employers can take to address employees working remotely in several locations throughout the country.
Pay based on location
There are several approaches an organization can take to pay their remote staff based on location:
Set a pay scale based on the location of the main or corporate office. If multiple offices exist, assign your staff to the pay structure nearest their remote work location.
Pay is based on the pay zone that each employee lives closest to. Utilize a tiered US salary range. Take US national data and adjust based on the area. Add a 10 percent premium to employees who live in the five major metro areas, which include the District of Columbia, Los Angeles, Seattle, Austin, and Boston. Add a 15 percent premium to San Francisco and New York City employees since they live in a location with the highest cost of living and labor.
Utilize national data to set pay levels. This is recommended if the cost of living is similar to the national average.
Performance Based
Consider paying your staff based on their role and level of experience rather than their location. Pay should be based on job responsibilities and capabilities.
To accommodate this structure, a matrix can be developed to account for growth and the level of experience and skills.
Carve-Outs
Some jobs are in high demand and may be more critical than others. Consider carving certain classifications and setting a different pay structure for those groups so that they can remain competitive.
Equitable Pay
Employers need to communicate and document reasons for pay decisions due to remote work or performance, and employees need to be mindful of anti-discrimination laws to ensure that workers, including those within a protected class, are compensated equitably.
Define What Works for Your Organization
It is important to define your pay philosophy and structure clearly and what makes sense for your organization to help guide expectations. In addition, a competitive compensation philosophy can help attract and retain your workforce.
Also, consider the cost and administrative implications. For example, the financial impact for smaller organizations can be greater than a Fortune 500 company.
In summary,
As you navigate the societal issues around remote work, gender differences, and your organization’s needs, keep in mind that equality benefits everyone.
Courtney Geduldig of S&P Global summed it up best when she explained that “one of the biggest misconceptions about gender equality is that it only benefits women, but the data shows that this is not true.”
With companies focusing on recovery efforts following a pandemic, gender equality may recede in priority. Other priorities will inevitably emerge, but eliminating discrimination should never be put on hold.
By being proactive and aware of imbalances, businesses can become leaders against gender discrimination in all workplace settings.
California’s Pay Transparency Law-SB 1162 is making headway. The state legislature approved the bill on Monday, September 13, 2022. California’s Governor Gavin Newsom has until September 30, 2022, to enact the bill.
This new law would require all employers in California with fifteen or more employees to include the hourly rate or salary range on their job postings. In addition, upon request, employers would be required to provide the pay scale to their staff, and employers would be required to submit data payroll data to the state annually broken down by the demographics of their organization.
Groundbreaking State
The state of California is home to many groundbreaking changes in employment law. California’s Equal Pay Act requires employers in the state to disclose the pay range for positions they’re recruiting for to applicants upon request. In addition, employers within the state with at least one hundred employees are required to submit payroll data to the state annually.
California is now setting a groundbreaking precedent by adding an additional layer of transparency. California would be the first jurisdiction to require employers to distribute payroll data based on the demographics of the organization.
What are the implications of Law-SB 1162?
This new law would require all employers in the state of California with fifteen or more employees to include the hourly rate or salary range within their job postings
Upon request, employers would be required to provide information on what they’re paying their staff members
Employers with one hundred or more staff members would be required to report to the state annually the median and mean hourly rate for each job category broken down by race, ethnicity, and sex
In addition, employers with one hundred or more workers through labor contracts would also be required to submit similar data annually
All employers would be required to record their individual employees’ job title and wage history during employment and for three years post termination
California Fair Pay Act-SB358
The California Fair Pay Act-SB358, originally enacted in 1949, was amended on October 6, 2015, to address pay disparity among men and women within the workplace. The amendment requires employers only to rely on relevant factors to determine pay differences for their staff who perform substantially similar work. Such relevant factors include seniority, merit, quantity or quality of production, or a bona fide factor such as education or experience.
SB358 was also amended to protect employees who wish to discuss their pay with their coworkers openly, and it prohibits employers from retaliating against their staff for doing so.
Employer Liability
SB 1162-Failure to file the required reports or disclose the required information to the state of California would bring penalties to employers for non-compliance. In addition, employees would be eligible to file a complaint with the labor commission, which could lead to further fines and violations.
SB358-The division of labor standards enforcement enforces penalties for employers who violate SB358. Employers would be subject to back pay, interest, and liquidated damages.
To eliminate liability, employers are encouraged to document pay decisions within company policies and job descriptions based on relevant job factors, including job requirements, responsibilities, and working conditions.
Other Transparency Trends
Salary is an important factor for job seekers and, at times, can be a make-or-break decision whether to apply. Organizations are starting to recognize this, and the number of job listings with salary information has been increasing.
Some major companies like Microsoft plan to start disclosing pay on all their job listings more than mandated requirements to recruit qualified candidates.
In addition, to meet job seekers’ needs, popular job listing websites like Indeed recognize this trend and have acted. Indeed encourages employees to post their salary, and if not provided, they utilize an algorithm to atomically pull salary information based upon the job description and the characteristics.
Tools and Resources
Blue Whale has assembled articles and white papers to help companies best manage and guide their compensation program. In addition, at no cost, Blue Whale offers reviews that can help your organization best manage the challenges the pay transparency brings to the employer community.
Let’s Start the Conversation
Blue Whale offers a full range of compensation services to help you achieve your business goals. Whether you’re looking to design a new compensation plan, analyze your current program, or stay up-to-date with the latest trends, we have the expertise and resources to meet your needs. Contact us to learn more about our compensation services and how we can help you take your program to the next level. Let’s start the conversation!
What is Quiet Quitting, and why are employees doing it
Quiet quitting occurs when an employee abandons the effort to go above and beyond work expectations and only performs the minimum essential requirements of their job.
Employees assert their control and choice and begin setting boundaries and refuse to do work outside work hours. They shift priority towards focusing on maintaining their health, well-being, relationships, and activities outside of work.
Social Media and Quiet Quitting
Most recently, quiet quitting has been given a label and has become more dominant. Quiet quitting has dominated social media, primarily on Tik Tok. Millennials and generation z have been actively posting videos on the topic, and several of them have become viral, which has triggered a lot of commotion.
Economic Impact
There is currently a tight labor market. Employees may feel like it’s easy to obtain alternative employment; therefore they have the power to renegotiate the terms of their employment contract.
Impact on Employers
Other states, including New York, Colorado, and Washington, have moved towards requiring employers to disclose the pay scale within their job listings. California is now setting a groundbreaking precedent by adding an additional layer of transparency. California is the first jurisdiction to require employers to distribute payroll data based on the demographics of the organization. This new requirement intends to address pay equity and ensure no pay disparities.
Steps Employers Can Take to Combat Quiet Quitting
Employees are redefining work, and companies can begin to understand and reassess their current workplace practices or continue to see more turnover and decreased productivity. Quiet quitters have left employers no option but to take what employees say more seriously and assess why they are resigning or quietly quitting their jobs.
Address Employee Burnout
Employees who feel overworked or not valued can become burned out, leading them to quit or leave the workplace quietly.
Creating a reasonable amount of work for them to complete is key to setting them up for success so that they are set up for success. Review their performance and productivity levels regularly, and if they start to slip, ask how you can help.
Offering paid time off and creating a culture to encourage employees to take it is another way to reduce burnout. This will allow your employees time to recharge and come back more productive than ever.
Bring Back Personnel Connections
Your employees naturally want to feel connected, and a lack of connection can affect your employee’s well-being, productivity, and retention.
Establish a pattern of touching base with employees at least regularly and ask how they are doing and how you can help.
Initiate Team Building Activities
Team building activities can be fun and encourage open communication, build stronger relationships, and build trust.
Don’t know where to start? Host a brainstorming session, encourage employees to participate in a fitness challenge, or host a virtual happy hour.
Show appreciation
Every employee wants to feel appreciated for their hard work. In addition, appreciation can generate confidence and enthusiasm for the work they do. Show appreciation for the great work that your employees have done. It could be something as simple as verbally expressing gratitude or you can take a step further and delegate an award such as extra time off.
Increase Flexibility
Flexible is in high demand. Providing flexible work could lead your staff to have higher job satisfaction and productivity which in turn could benefit your organization.
There are many forms of flexible work including telework, job sharing, condensed schedule, and part-time employment.
Several employers worry that their staff will underperform with a flexible schedule. To ensure that your staff is meeting expectations, set deadlines and regularly check in with them.
In conclusion, quiet quitting is a complex issue requiring individual and organizational attention. Organizations can foster a more engaged and productive workforce by understanding the reasons behind quiet quitting, recognizing its consequences, and implementing proactive strategies to prevent it. Through effective leadership and a commitment to creating a positive work environment, the prevalence of quiet quitting can be reduced, leading to increased job satisfaction and overall organizational success.
As employees begin questioning their pay, while pay transparency continues to grow in popularity, employers are scrambling to defend their pay practices.
Salary information is becoming more available both formally, through legislation, and informally, through social media posts. Employees now have the valuable information they need to leverage conversations with their managers and challenge current compensation.
CA Equal Pay Act – Employers cannot ask about the previous salary and must disclose pay ranges if asked during an interview
CO Equal Pay for Equal Work – Employers must include salary ranges and benefits information in every job posting as well as disclose promotion opportunities and keep track of job descriptions
NY – Employers must post maximums and minimums on all job postings or promotions by November 2022 (extended from May 15th)
More casually, there is a societal shift to make salary information less taboo. Coworkers are no longer ashamed of sharing how much they make in the company. A poll conducted in 2022 by YouGov Plc found that of their sample of 2,500 adults, 42% of Gen Z workers, ages 18-25, and 40% of millennial employees, ages 26-41, have shared their salary information with a coworker or other professional contact.
Many companies are not prepared to discuss the warrants for current salary ranges and are left with unhappy employees who still have pay concerns. Payscale has reported that employees are 50% more likely to leave if they think they are being paid below market, even if they aren’t. Some 57% of people paid at the standard market level believe they are underpaid, and 42% of those paid above the market think they are underpaid. This highlights the value of a compensation study where you can provide employees the ease of mind that they are being compensated based on their talent and skills in a competitive organization.
Benefits Trends
Total compensation is more than just cash; it’s the entire package that includes benefits available for employees based on budget. Companies are getting creative to make sure their employees perceive a good work/life balance. With changes in work models, like remote or hybrid arrangements, we are also seeing more companies jumping on the trend to offer unlimited time off.
The United States is the only developed country with no federal law requiring employers to offer paid holidays to employees. But companies are still trending to achieve work-life balance through this new perk: Unlimited Paid Time Off. While this is a debated topic, with people worried that this may be a trap to keep people constantly thinking about work, a recent study shows that 82% of employees that have unlimited PTO have the best rates of work-life balance. Competitive PTO (limited or unlimited) is more than just a mechanism to attract and retain top talent. These packages make business sense, especially for companies prioritizing innovation where we are looked at as a model to set expectations for productivity. To do good work, people must take care of themselves. Recovery is a lifestyle practice making its way into industries where creation and innovation are the organization’s backbones.
If you’re looking to expand your benefits program, we welcome you to get inspiration from the list below for the most popular benefits and perks to include in your plan. We have compiled these options for you to consider as you continue to build your employee engagement.
Consider These Benefits Trends:
Flextime and Work-at-Home Options
Flexible holidays
Commuter Assistance
Performance Bonus
Vacation reimbursement: one-time bonus to use while taking time off
Healthy Cafeterias and Snack Machines
Home Office Stipend
In-office Career Development
Wellness Facilities and Support
Annual Learning Stipends for participating in industry certifications, seminars, or classes
Generous Parental and Caregiver Leave
Volunteer Time Exchange
Free Desktop Music
Personal Care Services – Bring in a stylist once a month for haircuts or try dry cleaning drop off
Discounted Access to Company Products/Services
Stock/Stock Options/Equity
Gym membership
Insurance coverage for you and your dependents
Affirmative Action Planning
With federal and state agencies prioritizing pay equity, you must identify, study, and address potential areas of vulnerability and help your pay system achieve your goals for equity, competitiveness, and compliance. This Risk Analysis is a report designed to provide clients a gateway to viewing potential pay equity liabilities across multiple tiers by leveraging comparisons by job title, job group, experience or seniority, and EEO category.
In our efforts to help organizations achieve pay equity and move closer to establishing equal pay for equal work, Blue Whale has launched Blue Whale AAP. Our Affirmative Action Planning supports government contractors and any business that wants them as a customer to stay in compliance with federal regulations easily.
This methodological process starts with data cleansing and your workforce activity data reconciliation. From this, we plan development, data system coding, reporting, and monitoring your hiring, promotion, and termination practices. Next, we develop an Adverse Impact Analysis to do potential bias testing in your HR practices to ensure we have the most accurate narrative.
Is 2022 the best year to reset your compensation program? Absolutely.
To prepare you for this year, Blue Whale Compensation has compiled a series of measures that can help companies best manage their labor and talent needs.
We are living through a historical shift in the workplace with rising wages and inflation. At no other time in recent history has compensation taken a front seat as a means that companies can use to retain, engage, and attract new talent. A compensation strategy, however, should not be confused with solely giving employees aggressive increases. In fact, unwarranted increases with no other plan are likely to make issues worse.
The plan needs to be based on a comprehensive analysis of budgets, labor needs, current talent needs, future talent needs, and basic compensation planning.
A Market Analysis is a Must
Carefully examine market levels and set appropriate salary benchmarks. Based on that information, consider market adjustments. Market adjustments should generally be no higher than 2%. If more severe market adjustments are needed, consider another round of market adjustment increases in 12 months. When setting the market, consider that 2022 is not the year to be noncompetitive. Along with inflation eating away any substantial wage gains, recent surveys indicate that most employers a setting salary increases about their 2022 projections; in addition, about half of companies are actively implementing market adjustments to employees who are under competitive market pay.
Merit-Base and Market-Driven Increases based on Performance
If you have ranges and midpoints, combine your performance management information with an employee’s market position. By using a merit-driven grid, you can justify larger, above-average increases to high-performing, underpaid employees. Conversely, the matrix helps you develop a policy to slow down salaries that are way above market midpoints.
Mine your employee data and identify the employee population that is most at risk of leaving your company. Use your compa-ratios! Employees with the lowest compa-ratios are twice as likely to be looking for employment. Review your employee population via existing interview data: what departments, units, or types of employees are leaving at a faster pace and what trends can you derive from their exit interviews?
Closely examine your labor stats and compare them to specific benchmarks. For example, voluntary turnover rates are trending between 10% and 17%. Are your higher or lower? Employee tenure is another key barometer to measure at-risk groups. Employees who have more than four years with a company as twice as likely to stay with the company for another three to four years. Employees who have less than two years are twice as likely to be looking for another job. In addition to critical stats, check data from your employee opinion or engagement surveys. They often contain valuable information that can help you identify at-risk employee populations.
Implement a Basic Compensation Plan with Guidelines, Grades, and Ranges
The rapid movement in wages that are likely to be experienced in 2022 most likely will subside in 2023. It is, therefore, very important that beyond immediate increases, you carefully look ahead and implement basic compensation management guidelines. This includes grades based on job leveling; ranges reflecting reasonable hiring salaries; policies addressing promotions, demotions; and most importantly, a basic outline of your company’s compensation philosophy.
Over the last few years, AI-driven solutions have come into the marketplace with innovative technologies that have simplified the often complex and disliked world of performance management tools. Many tools exist to offset the great challenges companies have with their existing program. Most app-based solutions tend to be affordable, flexible, and easy to deploy.
Recalibrate Your Pension Vesting Provisions and Enhanced Your Time-Off Policies
As employee tenure decreases, employers may want to re-think the existing model of pension benefits vs. time-off benefits. For example, most employers allow an employee to join their 401k plan in less than six months. Less than 30% wait a full year to allow them to join. If your retention and data show a pattern of employees decreasing tenure, then, employers may want to extend the waiting time before an employee signs and increase the vesting from three to five years. This needs careful consideration as 401K is a premium recruiting vehicle and care should be exercised to dilute the recruiting value that your current company offers. However, for companies that shift pension costs, to additional flexible some of the cost to enhanced time-off policies.
Consider Bonus for High Paid Employees, Not Increases
For high-paying employees versus additional salary, examine the market, and follow the following strategic budget: For employees over the midpoint, offer them a one-time bonus; for employees under the midpoint, add to their base. Over time, this strategy will keep your costs even with the market and you can target at-risk employees, and perhaps even keep them.
Selling your Plan
The biggest challenge in resetting your compensation program should not be illustrating the company can be more productive, efficient, and ahead of the curb in the long run. The biggest challenge is bringing the organization the information they need – from your C level to your middle management, and all the way to employees. This requires a significant public relations effort – one that cultivates the needs of the organization not only for the immediate future but for long-term success.
Is Job Hopping Here to Stay?
It used to be that most employees would stay in a position on average of four to six years. That is no longer the case. The fact is that most employees are no longer considering long-term employment with your company.
The leaders of the job-hopping movement are, to no surprise, millennials. They are now aptly called the “job-hopping generation” because they display a significantly higher willingness to switch careers than previous generations. The long-tenured career employee is essentially over.
Employee mobility with employment options, and the opportunity to get more money with the next move, have resulted in decreasing employee tenure. Social media is saturated with narratives about getting a 20% increase by going to a new company. The fact is that strategy works for people. In previous years, job jumping was frowned on – now, that tactic is part of the challenges that employers must seriously account for.
Given that employees are less likely to stay with your company for a long period, you need to develop shorter and more impactful training procedures to make up for time lost in the hiring process. Shorter employment also makes companies question their pension and retirement benefits. Instead of benefit and tenure keeping in immediately waiting 6 to 12 months longer and increasing vesting provisions from 3 to five years.
Hire Part-Time Employees to Fill the Labor Gap
One driver of the current resignation wave is that employees are looking to shift their work schedule and work with more flexible work type arrangements. Often, even a full-time WFH arrangement is not enough. Employees are also looking for a shorter, flexible work schedule. Part-time employment may be an option for them and many employers.
Beyond the cost economics – which may help the employer – part-time employees often have the experience and the technical agility that employers often require from new employees. Given the new dynamics in work arrangements, part-time employees, when properly structured, can add the stability that the current environment lacks. Managers will be key. Managers can resist the perception that part-time employees are supplemental and not worthy of long-term investment in terms of training to development. HR must bring considerable company culture efforts to show how part-time employees can be more than a short-term for the organization. Employees now place a high value on the ability to control their work/life balance, so they are likely to appreciate the opportunity to earn income while being able to accommodate to their lifestyle.
High Demand for Interns Expected in 2022
Intern season is coming up! A well-managed internship program is a great way to identify potential long-term talent against the wave of resignations. If you have been on the fence about hiring interns, this may be the year for you to jump into developing an internship program. A properly vetted internship program offers a variety of solutions that can quickly fill the labor gaps most employers are experiencing.
Hiring interns is a great way to get specific skill-based labor that can support critical key functions and relieve areas with entry-level support. A good program should also be able to help you identify potential long-term talent. If you target and recruit specific skill sets, you may be able to bring some support to key projects that might be stuck due to a lack of resources.
Most of the jobs that are being lost, besides retail and health, are office administrative classifications where minimum wages have not kept up with inflation. That means interns and part-time employees could provide much-needed relief during the late spring and summer months.
