Employers Unsure of Salary-History Bans

When it comes to achieving pay equity in the workplace, employers apparently aren’t sold on the idea that banning salary-history questions from the interview process will be effective in achieving that goal.

A new survey by the Hay Group division of Korn Ferry shows that 65 percent of executives at 108 companies believe their organizations will be affected by new legislation aimed at closing pay gaps for women and other underserved populations. However, the majority of executives polled (65 percent) believe that the law will not, or only to a small extent, actually improve the gender pay equity situation in their organization.

What is clear is that hundreds of thousands of employers will need to modify their talent screening and hiring processes, Korn Ferry said in a statement announcing the survey’s results.

“Organizations have a great deal to gain by implementing a strategy and process aimed at improving the overall fairness and transparency of their reward and talent management programs,” said Bob Wesselkamper, Global Head of Rewards and Benefits Solutions, Korn Ferry Hay Group. “This can help organizations create an employee value proposition that positions the company as a place where everyone can build careers and thrive.”

In addition, hiring situations must be handled carefully as companies that violate the new rules can face substantial fines, the consultancy notes:

“As a result of this legislation, many employers will need to seek out better market data and conduct more rigorous analyses to determine what a job should pay versus relying on the crutch of a candidate’s compensation history,” said Tom McMullen, Senior Client Partner in Korn Ferry Hay Group’s Reward and Benefits group. “Organizations need to ensure they have an effective job evaluation process that provides the right criteria and credibility for assessing the size of jobs.”

Jonathan Segal, an employment lawyer based in Philadelphia, told the Los Angeles Times the bans could be particularly relevant for older workers. Someone who has been working for more years and may be looking to scale back to a less demanding job — or workers eager to get back into the workforce after being out of a job and willing to work for less — could be subject to implicit bias when asked about their past pay, he said.

“Eliminating the question may help not only eliminate the pay gap for women,” he said, “but may help older employees who are being excluded because employers think they won’t be happy working for less.”

Meanwhile, Korn Ferry says further action on pay equity is likely ahead, but few say they are ready. Only 19 percent of organizations say they are well prepared to handle the new laws once they go into effect. Many large organizations are indicating that they are likely to get ahead of the issue by changing their national policies instead of waiting for individual cities and states to pass measures. Nearly half of the executives polled (46 percent) said choosing to comply with the most stringent legislation is the likely mode of adapting to the new legislation, as opposed to complying to each local legislation.

“It’s a new game out there,” said McMullen. “Few large organizations will be exempt. It’s better to be prepared than to be caught by surprise on this.”

 

Vacation: All They Ever Wanted

If your organization is in the midst of planning its annual holiday party (and possibly stressing over what could happen during said party in this post-Harvey Weinstein era), then know this: Most employees would actually prefer more time off in lieu of a holiday celebration.

That’s according to a new survey from Randstad US, which finds that 90 percent of employees would choose extra vacation days (or a bonus) over a workplace holiday party.

Time off is a fraught subject here in the U.S., one of the few industrialized countries to not mandate some form of paid leave for employees. As we’ve previously noted, American workers take significantly less paid time off during the year than their European counterparts, much to the consternation of health and wellness experts who warn that too little time off can lead to burnout, stress and other health issues further down the line.

So just how much time off are Americans getting these days? The International Foundation of Employee Benefit Plans‘ just-released 2017 survey finds that, on average, salaried employees in the U.S. with paid-time-off plans receive 17 days after one year of service, 22 days after five years, 25 days after 10 years of service and 28 days after 20 years (this includes vacation, sick days, etc.). In terms of paid vacation days, salaried U.S. employees receive on average 12 days after one year of service, 16 days after five years, 19 days after 10 years and 23 days of vacation after 20 years of service.

Most employers let workers carry over their paid leave time from one year to the next, with 83 percent of employers allowing them to carry over some or all unused days in a PTO bank, while 74 percent allow hourly workers to carry over vacation days and 77 percent allow their salaried employees to do so. Approximately one in seven organizations let workers sell their vacation time back to the company for cash.

As for the upcoming holiday season, just about all (99 percent) of organizations that offer paid holiday time offer Thanksgiving Day as a paid holiday and 75 percent include the Friday after Thanksgiving as well. Just  under half (45 percent) offer Christmas Eve off as a paid holiday, but practically all (99 percent) offer Christmas Day off as well as New Year’s Day. And for some lucky employees, 13 percent of organizations shut down their operations and offer a full paid week of  holiday leave between Christmas and New Year’s.

Survey: It Pays To Be Fair

Employers are keenly aware that employee engagement and satisfaction have fast become two of those seemingly elusive culture goals. Surveys from a variety of sources over the past few years peg engagement levels in the low-to-mid thirties.

Gallup, for example, which follows employee engagement closely, reports that in 2016 employee engagement remained stagnant from the previous years, barely budging from 31.4 in 2014 and 32 percent in 2015. Of course, there are many factors that go into high levels of employee satisfaction.

Now, a study out this week reveals that the pay process at an organization, in terms of fairness and transparency, is 5.4 times more impactful on how satisfied employees are than how they are paid relative to their market value.

PayScale, Inc., a cloud-based compensation data and software provider, designed the survey to identify the drivers of employee engagement. It queried more than 500,000 employees for its employee engagement research on various aspects of their job that could potentially contribute to both employee satisfaction and potential attrition.

“This research aims to shed new light on employee satisfaction and intent to leave in an era where engagement is at an all-time low,” Lydia Frank, vice president of Content Strategy at PayScale, said in a news release. “Our study shows that just by having an open dialogue about the pay process and employees’ contributions at the company, employers can ultimately drive better outcomes for their businesses.”

Another interesting finding is that when employees feel appreciated by their employer – and believe their company has a bright future – they are far more likely to be satisfied at work and remain at the company.

Other findings include: employees don’t know whether they’re paid fairly. Of the respondents who felt they were paid below market rate, nearly 90 percent were actually paid at or above market rate. That means only 11 percent of people who felt they were underpaid were correct; also, paying fairly really matters. The research shows 75 percent of respondents who think they are paid at or above the market rate said they were satisfied with their job, compared to only 59 percent of workers who felt they are paid below the market rate.

“This is provocative research that comes at a time when more and more companies are looking for ways to increase satisfaction with employees so they can get the biggest return from their talent investments,” said Pete DeBellis, research leader at the analyst firm Bersin by Deloitte. “The results are surprising and show us just how crucial it is for employers to make the leap and start talking more openly about pay in order to build more trusting relationships with their employees.”

The ‘Next Concept’ for HR

Starting January 1 of next year, the Northern California HR Association — one of the largest HR associations in the U.S. — will have a brand-new name: Next Concept Human Resources Association.

NCHRA CEO Greg Morton

There are multiple reasons for the name change, says NCHRA CEO Greg Morton. One of the most important, he says, is that the organization’s purview is moving far beyond its traditional base in Northern California/San Francisco Bay Area.

“We’ve got members in 23 states and three or four different countries, including Poland,” he says. “The HR profession is becoming borderless, and we want to support that and clarify that to the world.”

Formed as an independent organization in 1960, NCHRA became an affiliate of the Society for Human Resource Management in the later part of that decade. Last year, however, the organization decided to part ways with SHRM.

“I don’t want to bad-mouth SHRM, but we were finding that their focus on certain things was limiting to our relationship,” says Morton, citing SHRM’s controversial decision to stop supporting PHR and SPHR certifications in favor of its own brand-new competency-based certifications several years ago as one of the sticking points. Morton also says SHRM is heavily concerned with serving as a lobbying organization for the HR profession in the nation’s capital, while NCHRA’s focus is on continuing education for its members (which includes resources for those pursuing PHR and SPHR certificates from the Human Resource Certification Institute as well as the SHRM CP and SCP certificates).

With its new name, NCHRA wants to be seen as a source of learning amidst the big changes taking place within the HR profession, he says. Chief among those changes is, of course, the rise of artificial intelligence.

“We’re all going to be working alongside AI, and we’re going to need to know how to evaluate tech and use it for prescriptive means within our organizations,” says Morton. “The world of work is undergoing a ‘hyper state’ of change.”

With the name change, Morton also hopes to engage non-HR professionals, many of whom will need to be well-versed in HR concepts. “Our attitude is, anyone who’s looking to hire and develop talent — as a manager or an individual — is going to need those underlying skill sets,” he says.

These are challenging times for the association model, says Morton. Information that was once disseminated only to dues-paying members is now widely available via the internet, which means that associations need to come up with a new value proposition in order to stay relevant.

“The mid-1900’s association model is just not going to cut it going forward,” he says. “We’re looking to set a new trajectory here and we’re looking for like-minded associations to band together in figuring out how to better create a community for this era rather than 1960.”

Compromise or Crackdown?

When the owners of National Football League teams decided not to ban players league-wide from kneeling in protest during the national anthem, it brought to public attention the notion that even if employers have the legal right to  institute such a ban, staying neutral and working things out is the more prudent strategy.

According to an expert from outplacement and executive coaching firm Challenger, Gray & Christmas, while freedom of speech does not extend into the workplace, NFL owners – and employers in general – should be more focused on compromise than cracking down on employees who express and debate their political views.

“It is surprising to many, but the First Amendment does not extend to workers in private companies. The league does have the right to establish rules with consequences,” said Andrew Challenger, a vice president at the firm, in a statement. “Companies sometimes get dragged into political conflicts against their will. They should try to remain neutral and broker a win-win for both sides.”

A Challenger, Gray and Christmas survey around the issue found that 94 percent of respondents have witnessed political discussions in the workplace, with 18.2 percent reporting that those discussions happening often.  So this is not an unusual scenario.

In the case of the NFL, there is no rule in place to force players to stand so no official league punishment for players who protest will happen. As of last Sunday, a scattering of players continued to take a knee during the national anthem, without repercussions.

According to Andrew Challenger, suppressing demonstrating employees by brute force tends to further politicize the situation; the more effective path is to “deescalate the political tension” by having private conversations within the organization.

“In today’s climate, employers recognize political discourse is unavoidable at work. However, employers must be careful that these discussions do not violate anti-discrimination or harassment laws,” he says, adding that management should refrain from political discussions or imposing their own viewpoints on their subordinates. Above all else, he says, respect and professionalism must prevail in the workplace to ensure success and growth.

“The consistent and uniform administration of policies and procedures is the best way to ensure a positive work environment,” regardless of the profession or industry sector, he said.

H1-B Challenges Causing Headaches

As a candidate for president, Donald Trump often talked about making drastic changes to the nation’s immigration system if he won, but is this really what he had in mind?

Recently, employers have been noticing an uptick in the number of challenges they are receiving regarding  H1-B visa applications, according to a new report on Bloomberg.

According to Joshua Brustein’s piece, employers began noticing this summer that U.S. Citizenship and Immigration Services was challenging a large number of H-1B applications:

Cases that would have sailed through the approval process in earlier years ground to a halt under requests for new paperwork. The number of challenges — officially known as “requests for evidence” or RFEs — are up 44 percent compared to last year, according to statistics from USCIS. The percentage of H-1B applications that have resulted in RFEs this year are at the highest level they’ve been since 2009, and by absolute number are considerably higher than any year for which the agency provided statistics.

Brustein says the H-1B program is controversial largely because IT firms based in India have used it to hire for rote computer programming jobs: “These firms, like Infosys Ltd. and Tata Consultancy Services Ltd., have been working to reduce their reliance on the program, in anticipation of a less receptive political landscape. The overall number of H-1B applications dropped this year for the first time in five years. The skeptical eye the government is taking to applications has extended to all types of employers, according to immigration lawyers. Many are rethinking their own use of H-1B as a result.”

 It’s unclear how many applications are actually being rejected, Brustein acknowledges. But even though Silicon Valley sees the H-1B program as one of its top political priorities, this campaign of reform by red tape has avoided the frantic political fights surrounding other aspects of immigration, like the proposed travel ban or the cancellation of DACA, a program for those who came to the country as undocumented children, Brustein says:

After the recent terrorist attack in New York, Trump called for the elimination of another visa lottery program – the Diversity Visa Lottery – saying immigration should be merit-based. This mirrors past calls his administration has made to eliminate the H-1B lottery as a way to punish those who use it improperly.

Instead, says Peter Roberts, an immigration lawyer whose clients include large multinationals and startups, the administration is punishing everyone. He said many of this year’s challenges were “beyond ridiculous, trumped-up requests — no pun intended — issued either without legal basis or making no sense from a common sense standpoint,” and questioned whether they’d stand up. “How do you change the way we live? You can change the laws, or you can change the way we interpret them,” he said. “This is the latter.”

“We’re entering a new era,” adds Emily Neumann, an immigration lawyer in Houston who has been practicing for 12 years. “There’s a lot more questioning, it’s very burdensome.” She told Brustein that in past years she’s counted on 90 percent of her petitions being approved by Oct. 1 in years past. This year, only 20 percent of the applications have been processed. Neumann predicts she’ll still have many unresolved cases by the time next year’s lottery happens in April 2018.

According to Brustein’s piece, USCIS declined an interview request, sending a written statement instead. “USCIS officers use currently existing policy that interprets existing statutory and regulatory requirements to evaluate petitions and make an eligibility determination,” it said. “As done in the past, officers evaluate each petition on a case-by-case basis to determine if a petition qualifies for the benefit being requested.”

Is your  organization experiencing similar delays and challenges to its H1-B visa applications? If so, you can take some small solace in knowing that you’re not alone.

NAHR Welcomes New Fellows

The National Academy of Human Resources inducted its 2017 class of Fellows at its annual dinner and installation ceremony Thursday night in New York.

NAHR Class of 2017 Fellows (from left to right) Donna Morris, Peter Fasolo, Christine Pambianchi and Tim Bartl.

One association executive and three senior HR leaders were welcomed into the academy by their peers in recognition of their level of achievement, including Timothy Bartl, executive vice president, general counsel and secretary of the HR Policy Association and CEO of the Center on Executive Compensation; Peter M. Fasolo, executive vice president and chief human resources officer at Johnson & Johnson; Donna Morris, executive vice president for customer and employee experience  at Adobe Systems Inc.;  and Christine Pambianchi, senior vice president of human resources for Corning Inc.

The NAHR’s first class of Fellows was inducted 25 years earlier. To acknowledge the milestone, six members of the founding committee who were present at the induction ceremony were asked to stand and be recognized.

To date, with the addition of its 2017 class, 172 individuals have been named Fellows of the NAHR.

Tim Bartl joined the HR Policy Association as its assistant general counsel and vice president of corporate affairs in 1997, when it was known as the Labor Policy Association. He’s been instrumental in expanding the association beyond employment policy into areas such as healthcare and executive comp. At the Center on Executive Compensation, he oversees operations, policy and federal advocacy activities and has played a key role in growing its “subscribers” over the past 10 years from 26 to 134.

Peter Fasolo joined Johnson & Johnson in 2004, after 13 years in management at Bristol-Myers Squibb. Under his leadership, J&J has transformed its approach to HR strategy and service delivery by establishing a global network of shared services. He also has played a key role in leveraging analytics capabilities to better align J&J’s talent and innovation strategies. During his tenure, the company has been able to place internal successors in 80 percent of all senior-management positions.

Donna Morris joined Adobe 15 years ago. She has played a key role in reshaping virtually every aspect of Adobe’s employee experience over that period and, in 2015, her responsibilities were expanded to include the customer experience. Morris is a champion of diversity, and is responsible for  developing cutting-edge benefits aimed at attracting and retaining talent. She’s a member of the board of directors at the Society for Human Resource Management.

Christine Pambianchi joined Corning in 2000 as a division HR manager and has led the company’s global HR function since 2008. Among her achievements are creating a Talent Management Center of Excellence, expanding Corning’s MBA recruiting process at core schools and enhancing the company’s leadership-development curriculum. Her efforts in the area of diversity has led to increases in the number of women, African-Americans and other minorities in leadership roles—39 percent, 17 percent and 83 percent respectively.

Next year’s annual dinner and installation ceremony is scheduled for Nov. 8.

M&As: Keeping Talent Long-Term

Mergers and acquisitions are hard, but post-merger success can be harder: Up to 90 percent of mergers end up failing, according to the Harvard Business Review. While mergers are complicated and the factors that can contribute to failure are many, one of the biggest impediments to success is when talented employees from both organizations decide not to stick around post-merger.

Willis Towers Watson’s 2017 Global M&A Retention Study finds that, while acquiring companies have been increasingly successful in retaining at least 80 percent of their employees who’ve signed retention agreements through the end of the retention period, only about half retain at least 80 percent of such employees a year after the retention period ends.

“It’s a tale of two results,” says Mary Cianni, WTW’s global M&A practice lead. “Acquirers have made good strides at keeping key talent for an initial period, but there’s room for improvement one year later.”

Companies are failing to use the retention period to capture these employees’ “hearts and minds” for the long term, she says. Retention bonuses — the primary financial award used by companies — are important, but are only part of the equation, says Cianni.

“Personal outreach by leaders, strategic promotions and employees’ participation on task forces are also beneficial and will pay dividends in the years ahead,” she says. Total rewards (learning and development and career opportunities for hi-pos, in particular) can also be key.

The report (based on data from 244 respondents in 24 countries) finds that companies which prioritize early communication with senior leaders — 24 percent of the acquiring companies asked senior leaders at their target companies to sign retention agreements prior to the initial merger agreement signing — tend to have better luck at retaining those leaders than those that do not.

Of course, culture is also important: Nearly half (44 percent) of the employees who left prior to the end of their retention period blame the new or changing culture of the combined organization as the reason for leaving. Other top reasons for leaving include being aggressively pursued by competitors (36 percent) and not liking their new role (25 percent).

“The most successful acquirers realize retention agreements can buy time, but not loyalty,” says Scott Oberstaedt, WTW’s director of executive compensation. “And by not using their arsenal of tools to build loyalty during what can be tumultuous periods, companies often lose talent that would serve them well in the long run.”

When Retention Requires Attention

Keeping retention rates high is a priority for any organization, but what happens when it starts to slip?

In a new piece on Fast Company, contributor Lydia Dishman delves into the question of how to stop an exodus of workers that the Bureau of National Affairs has estimated costs employers $11 billion annually.

The reasons for workers to seek greener pastures are often manifold, Dishman notes:

Overall, the latest Gallup report found that a record 47% of the workforce says now is a good time to find a quality job, and more than half of employees (51%) are searching for new jobs or watching for openings. Gallup found that this is due in part to a national employee engagement rate currently hovering at just 30%.

Workers also switch employers to get a salary bump that can go above the traditional annual cost of living raise that hovers around 3%, barely outpacing inflation. Right Management, ManpowerGroup’s global career and talent development expert, polled 4,600 workers globally, and found 1 in 5 people are simply in the wrong role.

A new report from Ceridian, based on a survey of 1,602 U.S. and Canadian employees, revealed that even generational differences are influencing the urge to jump ship. Over a third (33%) of gen-Xers were actively looking for work versus just 22% of millennials and gen-Z. Those between the ages of 18-29 did say that they wouldn’t stick with one employer for more than five years.

Despite these survey results, Dishman quotes an expert who says other factors are also influencing younger workers’ desire to change employers, including a company’s culture.

“Ziprecruiter’s CEO Ian Seigel, agrees that workplace culture is the biggest and most direct driver in turnover. But Seigel says they’re looking beyond feedback and clear communication of opportunities to advance.

Seventy-five percent of millennials want flexibility that also keeps them on promotion tracks,” Seigel notes. That’s why he recommends that managers take a closer look at what motivates their teams, and how to diverge from traditional best practices in order to retain them.

In order for companies to figure out whether employees are leaving because of the culture, Dishman quotes Fran Katsoudas, Cisco’s chief people officer, who suggests that managers listen and engage with their team regularly.

“If you understand your team dynamics, the individuals on your team, and their strengths,” she explains, “you will have a much better lens on what is going well or where there are challenges.” She encourages leaders to show their vulnerability and take ownership of what is not working, which is key to getting to the root causes of people retreating.

Another way to do this, Katsoudas tells Dishman, is “to use data and analytics. Cisco has a weekly check-in tool, quarterly surveys, and regular feedback from every monthly and quarterly event.

“When employees know that their manager is regularly listening to them, the impact is significant,” she says.

Executives Honored at Awards Dinner

Lisa Buckingham of Lincoln Financial Group and a trio of HR leaders were honored at the 29th annual HR Executive of the Year awards dinner held at Boston University.

The HR Executive of the Year and Honor Roll awards are presented each year to the individuals in the HR profession who have distinguished themselves through extraordinary vision, strategy, direction and leadership in their organizations. A prestigious panel of judges, including previous award winners, thought leaders and HRE‘s editor, select the winners from a field of worthy candidates.

Buckingham, the Radnor, Pa.-based insurance and investment management provider’s executive vice president, and chief human resources, brand and enterprise communications officer, was honored for her leadership which has helped Lincoln advance its diversity and inclusion efforts, improve talent management and succession-planning processes, and develop a fully revamped career framework.

Lincoln Financial Group President and CEO Dennis Glass called Buckingham a “sophisticated ball of energy,” and said that when Buckingham first found out she had won the award, the first thing she did was thank her HR team.

“That’s just the kind of person she is,” he said. “She’s never going to take credit for something that was a group effort.”

In her speech accepting the award, Buckingham shared three principles that have guided her career: the power of networking and mentoring, thanking people who have helped you and simply being present at all times.

“Whether it’s a crisis situation or a calm situation, people really need to know that you’re being fully present.  That means that sometimes I may miss things at [my son’s] school or work, but you have to make those choices. You always know where you need to be,” she said.

Also honored at the awards dinner were Honor Roll inductees Vivian Maza, chief people officer at Ultimate Software, David A. Thaeler, executive vice president and CHRO at Haskell and Karen May, executive vice president and CHRO at Mondelez International.

HRE presented the first HR Executive of the Year award in 1989. Since that time, 28 other HR professionals have been honored with this top award and 94 Honor Roll recipients have been recognized, including this year’s winners.

For a full list of previous HR Executive of the Year award winners, click here.