Employee Engagement and Confidence Decrease during Transitions

Employee Engagement and Confidence Decrease during Transitions

Employees’ levels of engagement and confidence in their company tend to decline when the organization is undergoing significant transitions, and especially when a new CEO takes over the helm, the results of an analysis conducted by the Hay Group division of executive benefits consultancy Korn Ferry suggest.

In the study, which was released on October 10, 2016, researchers analyzed a global employee opinion database comprised of responses from more than six million employees, and compared results for organizations undergoing large-scale change with global averages.

The findings indicated that during a CEO or leadership change, the percentage of employees who feel the company is able to retain high-quality employees is 27% lower than the global average. The analysis also found that during such leadership transition periods, the share of employees who are encouraged to take reasonable risks, such as trying new ideas or new ways of doing things, is 18% lower than the global average; and that the share who believe the company is effectively organized and structured is 13% lower than the global average.

In addition, the results showed that during a leadership change the percentage of employees who think that poor performance is generally addressed effectively in the company is 16% lower than the global average, the share who believe the company is effectively managed and well-run is 11% lower than the global average, and the percentage who think the company keeps employees informed about the performance of the business is 19% lower than the global average.

Researchers recommended that company leaders take certain steps to reassure employees during these leadership transition periods. Specifically, they advised senior leaders to take action to develop strong engagement levels before the change, and to work with managers and an internal communications team to create frequent, clear, and consistent communications. They also suggested that companies conduct employee surveys to gain insights into employee attitudes that can be used to shape how these change programs are structured.

The study’s authors further recommended that leaders coach and develop executives, helping them to better understand their personal role in change; and support and equip managers to ensure they have the tools, skills, and ideas they need to engage their teams.

From Benefit Trends Newsletter, Volume 59, Issue 11

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.

Tech Executives Express Optimism about Revenue and Employment Growth

Tech Executives Express Optimism about Revenue and Employment Growth

While technology executives report that they are ramping up deployment of automation and machine learning across several functions of their company, they also claim they are planning to hire more people over the next several years, according to the results of a survey of U.S. technology CEOs by accountancy firm KPMG.

Released on July 11, the findings of a survey of 138 U.S. technology industry chief executives from internet, hardware, software, cloud, and IT services companies showed that around three-quarters of the respondents believe that automation and machine learning are likely to replace at least 5% of their manufacturing, technology, sales, and marketing workforce over the next three years. At the same time, more than half (55%) of respondents said they expect their company’s headcount to grow at least 6%.

Almost 60% of the CEOs surveyed said they expect annual revenue growth for their organization over the next three years of between 2% and 5%, while 17% said they anticipate growth of between 5% and 10%. The findings also indicated that 97% of the CEOs surveyed are confident about U.S. revenue growth prospects over the next three years, and that nearly 90% are confident about global growth as well.

When asked about their strategic priorities in the coming 36 months, the top response of the CEOs surveyed was digitization of their business, followed by a stronger client focus, implementing disruptive technology, minimizing cyber security risk, and talent development.

The survey also found that almost half of the respondents describe their approach to innovation as accelerated. When asked how they plan to accelerate the execution of their strategies, 80% of the CEOs surveyed said they are using disruptive technologies to improve products and services, 60% said they are hiring new talent, and 49% said they are forming new partnerships and alliances. The findings further indicated that around 80% of the executives polled see growth through partnerships or collaboration with other companies as the way to drive shareholder value for the next three years.

In addition, the results revealed that the leading concerns of the tech CEOs surveyed are product relevancy three years from now, the impact of global economic forces on their business, and how millennials and their differing wants/needs will change their business. When asked about risk, the CEOs polled said they are most concerned about cyber security, regulatory risk, and reputational risk. However, 90% of the respondents agreed that the need for security is generating innovation in products and services.

From Benefit Trends Newsletter, Volume 59, Issue 8

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.

Employers Report Concerns about Overtime and Other Regulatory Changes

Employers Report Concerns about Overtime and Other Regulatory Changes

The vast majority of U.S. employers believe that recent Federal regulatory initiatives, including changes made to overtime regulations, will affect their workplace, according to the results of an annual survey conducted by employment law practice Littler.

The survey, completed in April and May 2016 by 844 in-house counsel, human resources professionals, and C-suite executives from some of America’s largest companies, examined the key legal, economic, and social issues affecting employers as the 2016 presidential election approaches.

The findings indicated that employers are largely aware that the U.S. Department of Labor (DOL) has recently advanced several regulatory initiatives that will affect the enforcement of Federal employment laws. The survey showed that 82% of respondents expect DOL enforcement to have an impact on their workplace over the next 12 months, with 31% anticipating a significant impact; up from 18% in the 2015 survey. Researchers noted that this concern is likely driven in large part by the recently finalized Fair Labor Standard Act “white collar” overtime regulations, which drastically increase the number of workers who can qualify for overtime pay. They added that although the respondents completed the survey in the weeks prior to the release of the final rule, 65% had already conducted audits to identify affected employees.

The survey also found that following the National Labor Relations Board’s recent expansion of the definition of a “joint employer,” 70% of respondents expect an increase in claims over the next year based on actions of subcontractors, staffing agencies, and franchisees; 53% predict higher costs; and 49% anticipate exercising increased caution in entering into arrangements that might constitute joint employment. By contrast, just 2% said the expanded definition of a joint employer will have no impact on their workplace.

The results further showed that 85% of respondents anticipate that the Affordable Care Act (ACA), will have an impact on their workplace in the next 12 months. While two-thirds said they do not expect a repeal of the ACA if a Republican is elected president this November, respondents said they see a greater likelihood of changes to individual provisions, with 52% saying a Republican administration could lead to a repeal of or changes to the Cadillac excise tax, and 48% saying they see a likelihood of changes being made to the play-or-pay mandate.

The findings also suggested that employers are increasingly concerned about their exposure to discrimination claims. In the largest year-over-year change in the survey’s results, 74% of respondents said they expect to face more discrimination claims over the next year related to the rights of LGBT workers, up from 31% in 2015; and 61% said they expect an increase in claims based on equal pay, up from 34% in 2015.

Finally, the survey showed that in response to tragic mass shootings across the nation, companies are taking a range of actions to keep their employees safe, including updating or implementing a zero-tolerance workplace policy (52%), conducting pre-employment screenings (40%), and holding training programs (38%). Researchers pointed out that only 11% of respondents reported they had not taken any action because violence is not a concern for their company.

From Benefit Trends Newsletter, Volume 59, Issue 8

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.

Financial Executives Report Slightly Lower Pay Increases In 2016

Financial Executives Report Slightly Lower Pay Increases In 2016

Pay raises for financial executives at both public and private companies in the U.S. are set to rise at a healthy rate of 4% in 2016, but are down slightly from the previous year, according to the results of a survey conducted by Grant Thornton LLP and the Financial Executives Research Foundation (FERF).Â

The survey of 363 active Financial Executive International (FEI) members from October 2015 through January 2016 found that the average salary increase for senior-level financial executives at both public and private companies is expected to decline slightly in 2016 compared to the previous year. For 2016, respondents at public companies reported an average salary increase of 3.7%, down from 3.9% a year ago; while respondents at private companies reported a 4.1% increase, compared to 4.4% in 2015.

Researchers noted that these numbers are consistent with broader market data, and are higher than the projected across-the-board average pay increases of 3.1%. However, of the financial executives surveyed, 26.5% said they received no salary increase for 2016, up slightly from 24.2% in 2015.

The findings for 2016 indicated that among public companies the average base salary of a chief financial officer is $303,975, and the average base salary of a corporate controller is $229,895; while among private companies the average base salary of a CFO is $217,509, and the average base salary of a corporate controller is $161,374.

Of the respondents at companies that offer a sign-on bonus, the most common offering reported is a cash bonus (46%), followed by stock options or restricted stock (28%), and a combination of cash and restricted stock or options (26%). The results also showed that more than half (60%) of the respondents have a target bonus opportunity in 2016, and that the median level on bonus percentages for the top finance position at private companies is slightly higher than at public companies.

The financial executives surveyed were also asked about the long-term incentives they are offered. Most (89%) of the public company respondents said they receive some form of stock-based incentive compensation, while just 35% of the private company respondents reported receiving some type of stock-based incentive compensation. By contrast, less than one-quarter (22%) of respondents reported that they are eligible to receive long-term cash incentives.

 

Among the executives surveyed who are eligible for long-term incentives and whose awards have a performance or market condition for vesting, the most common measures for determining payouts cited are company strategic goals/objectives (19%), followed by more specific company financial performance measures like EBITDA (15%).

Nearly all (95%) of the respondents said they have access to a defined contribution plan, while 23% said they have access to a defined benefit plan. However, nearly half (47%) of respondents at companies that provide a defined benefit plan said the plan restricts new entrants or has frozen benefit accruals.

When asked who at their company is responsible for making pay decisions, 45% of respondents said the CEO/management makes all compensation decisions, while 44% reported that their company’s board of directors makes the pay decisions for senior executives.

Benefits Trends, Volume 59, Issue 7

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.