Most Large U.S. Companies Choose Their CEO From Within Their Ranks

Most Large U.S. Companies Choose Their CEO From Within Their Ranks

The role of the chief executive officer at large companies is more likely to be filled through internal promotion in the U.S. than in Germany, the UK, or France, the findings of a study by executive search firm Heidrick & Struggles indicated. Released on April 20, the fourth annual “Route to the Top” study examined the backgrounds and experiences of the CEOs of the largest companies in the United States (the largest 100 companies in the U.S., as reported in the Fortune 500), France, Germany, and the UK. The results showed that 85% of the CEOs of the companies in the U.S. were promoted from within the company ranks, compared to 68% in Germany, 61% in the U.K., and 48% in France.

The findings also indicated, however, that the internally promoted CEOs in the U.S. waited longer than their counterparts in Europe to ascend to the top position, and that the European CEOs tended to be younger when promoted. Prior to being tapped as CEO, the U.S. executives had been with the company for an average of 20 years, compared to an average of 14 years for their European counterparts. Meanwhile, internally promoted CEOs in the U.S. were, on average, 53 years old when appointed to the top job, compared with 50 years old in Germany and 48 years old in France and the UK.

Looking at the advancement of women, the study found that there has not only been no progress in the percentage of CEO roles held by women among these large companies, but that in the U.S., the number of female CEOs among the largest 100 companies actually declined over the past year. While the results showed that the share of female CEOs is, at 8%, higher in the U.S. than in the UK (6%), France (2%), or Germany (1%); researchers pointed out that the share in the U.S. is down by one percentage point from the previous year.

Somewhat surprisingly, the analysis revealed that the number of CEOs at the largest companies who have a master’s degree in business administration has declined sharply over the past five years in the U.S. The results showed that in 2017, only 35% of the U.S. CEOs hold an MBA degree, down from 42% last year and 49% five years previously. The study found a similar trend in France, where 26% of the CEOs have an MBA in 2017, down from 37% five years previously; while in the UK, 30% of the current CEOs have an MBA, unchanged from five years previously. In Germany, where advanced technical degrees are more common than MBAs among top executives, the share of CEOs with an MBA has declined to 11% currently from 16% five years previously.

The study also looked how many of these companies are led by a foreign national. The results showed that just 13% of the companies in the U.S. currently have a non-national CEO, up slightly from 11% five years previously. The analysis further indicated that the shares of companies with foreign nationals serving as the CEO in 2017 are similarly low in Germany (at 17%) and France (at 10%); but are much higher in the UK, where 40% of the CEOs are currently non-nationals.

A breakdown of the professional backgrounds of the CEOs currently heading up the largest companies showed that finance is the most common type of background for the CEOs in the UK (36%), the U.S. (31%), and Germany (26%); while engineering is the leading professional background of the CEOs in France (24%).

From Benefit Trends Newsletter, Volume 60, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2017 Liberty Publishing, Inc. All rights reserved.

Executive Roles with a Digital Focus Show Signs of Expanding

Executive Roles with a Digital Focus Show Signs of Expanding

Companies are responding to an increasingly digital market environment by adding executive roles with a digital focus or changing traditional roles to have a digital orientation, but are also finding that a digital company does not necessarily have to be led by technologists, the results of a global survey of managers and executives conducted by MIT Sloan Management Review and Deloitte indicated.

The survey, conducted in the fall of 2015, captured insights from more than 3,700 business executives, managers, and analysts from organizations of various sizes in 131 countries and 27 industries. The findings revealed that the list of “digital” business roles and functions is extensive and growing: for example, there are now digital strategists, chief digital officers, digital engagement managers, digital finance managers, digital marketing managers, and digital supply chain managers.

Researchers noted, however, that despite the proliferation of digital roles and responsibilities, most of the executives surveyed recognize that their company is not adequately preparing for the industry disruptions they expect to emerge from digital trends, and report feeling constrained in preparing for a digital future by a lack of resources, a lack of talent, and the pull of other priorities. Nearly 90% of the survey respondents said they anticipate that their industry will be disrupted by digital trends to a great or moderate extent, but only 44% said their organization is adequately preparing for the disruptions to come.

The survey also found, however, that a group of “digitally maturing” companies are transcending these constraints, achieving digital capabilities that cut across the enterprise. Based on how the respondents rated their company’s progress in adapting to digital technologies, their organization was classified as early, developing, or maturing. Close to 90% of the executives surveyed at digitally maturing organizations reported that they are integrating their digital strategy into the company’s overall strategy.

In addition, the survey showed that more than 75% of respondents at digitally maturing organizations provide their employees with resources and opportunities to develop their digital acumen, compared to only 14% of respondents at early-stage companies.

Yet researchers observed that some companies are experimenting with new approaches to performance management: for example, rewards can be allocated based on real performance data or survey data from all of an employee’s project leaders, or employees can determine rewards for one another in a crowdsourced approach.

From Benefit Trends Newsletter, Volume 59, Issue 9

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Demand for Certain Types of Workers is Projected to Grow

Demand for Certain Types of Workers is Projected to Grow

While only a small share of workers in the U.S. have experienced strong wage growth in recent years, the demand for this subset of workers appears to be intensifying, and employers may find it increasingly difficult to attract enough qualified professionals to fill these roles, a recent analysis of the job market by recruitment website Indeed indicated.

The goal of the study was to determine which jobs in the U.S. have shown strong wage growth and offer competitive salaries using the most recent available data, including aggregated and anonymized data from the website on jobs posted from March 1, 2015 to March 1, 2016; as well as data from other sources, including the U.S. Bureau of Labor Statistics (BLS).

To identify “opportunity jobs,” researchers analyzed BLS U.S. Standard Occupational Classifications data from 2014 (the most recent data available), which cover every type of work performed for pay or profit, and break down the workplace into 800 occupations. To qualify as an opportunity job, an occupation had to demonstrate two qualities: increasing purchasing power, or salary growth greater than 25.3% from 2004 to 2014, after adjusting for inflation; and a relatively high level of pay, or an average salary higher than $57,700 in 2014.

The results of the analysis indicated that of the 800 occupations in the U.S., only 170 have shown wage growth of more than 25% from 2004 to 2014 and offer an average salary higher than $57,700. The findings further indicated that the share of the workforce who hold these opportunity jobs has increased only slightly over the past 11 years, to 16% in 2014 from 13% in 2004.

The study also found, however, that these roles are in high demand among employers, making up 35% of all job postings on the website; and that for 71.3% of these jobs employer demand outstrips job seeker interest. By comparison, employer demand outstrips job seeker interest for just 54.1% of non-opportunity jobs.

The opportunity jobs for which demand is highest, measured by numbers of job postings, were identified as registered nurses, sales managers, miscellaneous computer occupations, miscellaneous managers, and accountants and auditors. The findings indicated that 92% of all opportunity jobs are concentrated in the following five categories: health care practitioners and technical, management, computer and mathematical, business and financial operations, and architecture and engineering.

The analysis also showed that education is a key differentiator for these roles, with 73.9% of opportunity jobs requiring a four-year college degree, and most of the remaining job types requiring that the candidate have a specific skill or certification. By contrast, the share of all jobs requiring a four-year degree has increased only slightly, from 23% in 2004 to 27% in 2014.

Researchers emphasized, however, that having a degree does not guarantee membership in the fortunate minority at the top of the polarized labor market. For example, they noted that speech language pathologist roles, which are opportunity jobs, are much harder to fill than lawyer positions, a job that is not meeting the wage growth requirements for opportunity jobs, as an excess of lawyers has flattened the legal job market.

The results of the analysis of the job postings data also suggested that, compared to other jobs, opportunity jobs require not just relatively advanced technical and problem-solving skills, but high levels of social skills and emotional intelligence. Because these positions often involve dealing with people, opportunity jobs were shown to have a lower average risk of automation than other jobs: just 8.8% of the opportunity jobs posted, but 45.7% of the other jobs posted, are considered to be at high risk of automation.

Noting that there is a gap between talent supply and employer demand as measured by click to postings mismatch across the U.S., researchers recommended that employers develop strategies for attracting highly qualified workers, such as recruiting talent from states that are talent-rich, or allowing employees to work remotely. They also advised employers to consider training existing employees to take on skilled roles.

From Benefit Trends Newsletter, Volume 59, Issue 9

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Employees Call for More Technology Advances in the Workplace

Employees Call for More Technology Advances in the Workplace

Many employees believe their current workplace is not yet making effective use of the latest technology advances, but expect that in the future these advances will provide them with both quality-of-life and productivity benefits, the results of a global survey conducted by technology providers Dell and Intel showed.

The survey, conducted between April 5 and May 3, 2016, asked 3,801 full-time employees at companies of all sizes and in a range of industries across 10 countries (US, UK, France, Germany, Japan, Brazil, China, India, Canada, and South Africa) for their views on how global technology trends are changing their workplace.

Researchers observed that collaborative tools and innovative technologies, such as the internet of things (IoT) and virtual reality (VR), are expected to become widespread in the workplace of the near future. The survey found that 66% of respondents would be willing to use augmented/virtual reality (AR/VR) technologies in their professional role, and that 46% believe these technologies will improve their work productivity. Meanwhile, 62% said they believe that the introduction of artificial intelligence (AI) will make their job easier, while 50% said they think AI will lead to more productivity in the workplace, with 30% citing the ability to automate complex or repetitive tasks as the major immediate advantage.

The survey findings revealed that 44% of respondents believe their current workplace is not smart enough, with many of the employees polled expressing a desire for an environment that uses data to make “smarter” decisions about conditions like temperature and lighting. The results also showed, however, that more than half of respondents believe that within the next five years they will be working in a smart office (57%) and will have access to advanced technologies that make face-to-face meetings redundant (51%). While 57% of the employees surveyed said they still prefer to have face-to-face conversations with colleagues, half of all respondents and three in five millennial respondents (under age 35) said they think better communication technologies and remote teams will make face-to-face conversation obsolete in the near future.

The results also indicated that expectations that technology will change the workplace are especially high among millennial workers, with 69% of these respondents saying they expect to be in a smart office within the next five years, and 42% saying they would quit a job with substandard technology.

In addition, the survey showed that remote employment and flexible working is increasingly enabling workers to focus on both productivity and quality of life benefits, and that employers are offering more flexible work arrangements to cater to mobile workers. More than half (52%) of respondents said they already work outside of a traditional office at least one day a week, while 18% reported that they are working from a public location every week.

The survey also found that a majority of workers place an emphasis on functional benefits, with 63% of millennials and 55% of older workers (over age 35) indicating they would rather have high-tech perks, such as access to AR/VR and IoT tools, than low-tech perks like ping pong and free food.

Benefits Trends, Volume 59, Issue 8

The information contained in this post is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. The information in this post is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.

Workplace Giving Programs Can Help Attract and Retain Talent

Workplace Giving Programs Can Help Attract and Retain Talent

Research shows that effective corporate giving programs are beneficial for a range of stakeholders, including the company, employee donors, and the benefitting charities, according to a recently published analysis by corporate philanthropy software provider JK Group.

In an article entitled, “The Future of Employee Benefits: Employee Giving Programs,” JK Group director of client strategy Nita Kirby cited research showing that the presence of corporate philanthropy programs has the potential to increase revenue by up to 20%, reduce staff turnover by up to 50%, and can even have an effect on the overall mood and health of employees.

Kirby also reported that the results of a survey conducted by JK Group showed that employers recognize the benefits of strong employee giving programs, with over 80% of the participating companies and organizations agreeing or strongly agreeing that their company is committed to a giving program. The survey findings further suggested that employee giving affects a company’s ability to attract and retain talent.

In addition, Kirby cited a 2015 report that showed that 61% of millennials would rather work for a company that offers volunteering opportunities or a giving program, such as volunteer time off, skill-based and pro bono volunteerism, and matching gifts.

Kirby also outlined several steps companies interested in incorporating giving and volunteering into their employee benefit programs can take. For example, employers can find out what type of programs solicit the strongest interest from their employees using free survey tools available online, and can then use the results of the survey to identify an employee advocate to support the program, and to help introduce the program to the rest of the workforce.

In addition, she advised companies to team up with partners associated with providing software and services that offer a user-friendly environment that allows employers to speak to their employees in their own unique way. To improve the chances that the programs will be supported and recognized by the entire company, she suggested that employers consider getting marketing, communications, compliance, and IT involved in supporting and promoting the philanthropy programs.

Finally, Kirby recommended that when it comes time to finally implement corporate giving programs, employers should look at a number of issues, such as whether they are adequately informed about all of the charities that might be in line with the philanthropic interests of their employees, and how legitimate the charities that are being considered for the company’s corporate giving programs are. To ensure that employees have peace of mind that their donations are ending up in the right hands and that their financial security has not been breached, Kirby advised employers to investigate the safest way to facilitate employee giving.

From Benefit Trends Newsletter, Volume 59, Issue 6

The information contained in this newsletter is for general use, and while we believe all information to be reliable and accurate, it is important to remember individual situations may be entirely different. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. This newsletter is written and published by Liberty Publishing, Inc., Beverly, MA. Copyright © 2016 Liberty Publishing, Inc. All rights reserved.