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.

Job Candidates Are Increasingly Informed about Job Openings before Applying

Job Candidates Are Increasingly Informed about Job Openings before Applying

Just as employers are finding it easier than in the past to get information about job applicants, job seekers have more information than ever about the company and the position they are applying for at relatively early stages of the job search process, according to the results of a global study of the strategies used by job candidates conducted by recruitment process outsourcing provider ManpowerGroup Solutions.

The study’s findings, released on April 26, are based on the findings of a global survey of nearly 14,000 job seekers in 19 countries. The study reported that there has recently been a shift in the balance of power from employer to candidate, as job seekers are increasingly collecting detailed information about the position they are applying for before making a career decision, including information about compensation, benefits, company mission/vision and culture, corporate brand, and corporate social responsibility.

The survey results indicated that the factors the prospective candidates are particularly interested in knowing more about when applying for a position are the compensation and the type of work, followed by schedule flexibility. When asked to rank the factors they consider most essential, job seekers in the U.S. were most likely to cite compensation (55%), followed closely by the type of work and benefits (both 51%), and schedule flexibility (45%). U.S. candidates expressed somewhat less interest in opportunities for advancement (35%), the geographic location (31%), and the company’s brand or reputation (14%).

However, researchers noted that in previous research on candidate preferences, 58% of global candidates surveyed stated that company brand is more important to them now than it was five years ago, and that this was especially true among younger millennial and Gen Y candidates (ages 18-35). The survey found that 28% of candidates globally and 27% of candidates in the U.S. reported having information about an employer’s brand pre-application.

The study also revealed that 44% of the candidates polled globally said they have been able to get the compensation details of a position prior to applying, and that in the five countries with year-over-year data, this percentage had increased by more than 10% between 2015 and 2016. For example, 45% of the U.S. job candidates surveyed in 2016 said they had information about the compensation range for a job before applying, up from 31% in 2015. The survey also showed that 41% of job candidates globally, and 42% of job candidates in the U.S., have obtained information about the benefits offered by a prospective employer prior to applying for a job.

In light of these findings, the study’s authors recommended that companies take action to ensure that they can attract the best candidates, including recognizing the importance of the content on their website and the potential of their HR portals to build their employer brand and provide candidates with access to the information they are seeking.

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.

A Late Career Job Change Is Associated With Staying In the Workforce Longer

A Late Career Job Change Is Associated With Staying In the Workforce Longer

While changing employers at a later career stage involves risks, older workers who change jobs voluntarily are significantly more likely to remain in the labor force until reaching age 65 than workers who stay with the same employer until retirement, regardless of their educational level, according to a study recently released by the Center for Retirement Research at Boston College.

Published in February 2017, the study brief, “How Job Changes Affect Retirement Timing by Socioeconomic Status,” was written by Geoffrey T. Sanzenbacher, Steven A. Sass, and Christopher M. Gillis. The authors noted that the question of whether a late-stage job change lengthens or shortens a worker’s career is important because workers generally need to remain in the labor force longer than they have in the past to gain a secure retirement. The study also pointed out that this issue is especially acute for workers with less education, who face an elevated risk of having an inadequate retirement income, in part because they tend to retire early.

The authors observed that since workers presumably change employers to improve their well-being, moving to a job that they consider better could lead them to work longer. The researchers also noted, however, that moving to a new job could reduce workers’ job security, because tenure protects older workers against involuntary job loss, and workers who change jobs risk a bad match. Thus, changing jobs could be associated with an increased risk of a layoff or an early labor force exit.

The brief presents an analysis of how voluntary job changes made by workers in their fifties affected their retirement timing, and of how these patterns differed by socioeconomic status, as measured by educational attainment. The analysis was based on data for the 1992-2012 period from the Health and Retirement Study (HRS), a biennial survey that follows respondents when they first enter the survey at ages 51-61 until they reach age 65.

The final estimates indicated that voluntarily changing jobs was associated with a statistically significant increase (9.1 percentage points) in the likelihood of remaining in the labor force until age 65, with this effect being slightly larger among workers with at least some college (10.9 percentage points) than among less educated workers (7.5 percentage points). The authors described this effect as large, given that only 44% of all workers in the sample were still in the labor force at age 65.

The findings further indicated that certain characteristics were associated with staying in the labor force longer, such as having a mortgage to pay off or having a later planned retirement age. The analysis also showed, however, that other characteristics were associated with earlier retirement, including having a long tenure at a job with a defined benefit pension, having more adverse health conditions, or having initially held a blue-collar job.

From Benefit Trends Newsletter, Volume 60, Issue 5

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.

Most Employers Support the Use of the E-Verify System

Most Employers Support the Use of the E-Verify System

Although many human resources professionals report that they are experiencing challenges with both the mandatory electronic verification system and the Form I-9 employment verification process used to assess the employment eligibility of individuals seeking to work in the U.S., employers continue to express strong support for the “E-Verify” system, according to the findings of a survey conducted by the Society for Human Resource Management (SHRM) in collaboration with the Council for Global Immigration (CFGI).

The survey, which was conducted between October 11 and November 18, 2016, polled 453 HR professionals from a randomly selected sample of SHRM’s membership. According to researchers, the current employment verification process, the Form I-9, uses paper documentation to verify the employment eligibility of people seeking work in the U.S., and is mandatory for all employers; whereas the E-Verify system relies on Social Security Administration and Department of Homeland Security databases to confirm that individuals are authorized to work in the U.S. They further noted that the use of E-Verify is mandatory for Federal contractors and subcontractors, and that 21 states and localities require the use of E-Verify for some or all employers.

The survey found that of the HR professionals polled, 83% said they would support a mandatory electronic verification system in general. However, the findings also indicated that the respondents’ levels of support would be even higher if such an electronic verification system helped employers avoid allegations of employment-based discrimination (95%), included a strong safe harbor to protect employers (95%), authenticated identity (94%), and eliminated the need for Form I-9 (89%).

The respondents reported experiencing a number of challenges when using the Form 1-9 verification process, including having to maintain records when keeping track of documents with an expiration date (37%). But the poll results also revealed that the respondents had encountered problems when using the current E-Verify system. Among the most frequently reported challenges were that the E-Verify system does not replace Form I-9 (25%), and that it has an unclear process for resolving issues when a worker’s eligibility for employment in the U.S. is not confirmed (22%).

Researchers emphasized, however, that the survey results point to opportunities for improving participation in E-Verify: of the respondents who said they do not participate in E-Verify, 37% reported that their reason for not participating is that use of the system does not eliminate the requirement to complete Form I-9. Researchers also pointed out that these survey results are timely, as the Trump Administration’s Fiscal Year 2018 budget proposal includes funding to support the mandatory use of E-Verify.

From Benefit Trends Newsletter, Volume 60, Issue 5

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.

Workers Seek Help from Employers in Managing Digital Demands

Workers Seek Help from Employers in Managing Digital Demands

While office workers are excited by the potential for technology to enhance their working conditions and create new career opportunities, they want employers to take more responsibility for equipping them with the skills they need to be successful in coping with the massive changes that are occurring in the digital economy, according to a report released by software solutions provider BMC.

The study’s findings are based on the results of a survey of 3,230 office workers from 12 countries, including the U.S. and Canada, that was conducted between September and December 2016. The survey found that 40% of respondents fear that they will not be able to keep up with the rate of change required by digital business, and that 88% of respondents want their employer to create an innovative company culture aimed at retaining staff and enabling workers to be successful with increasingly digital roles and responsibilities.

Nearly half (47%) of all workers surveyed, and 57% of respondents in the U.S., said they believe they will have to learn how to use new software and apps in order to do their job. Similarly, 33% of respondents said they expect that some of their tasks will become automated by 2020. However, 41% of the workers surveyed said they are concerned that they will not learn digital skills fast enough to thrive in the future workplace.

Yet the survey findings also suggested that many workers are eager to adapt to changing conditions, with 74% of respondents saying they feel empowered to embrace change and seize new opportunities, and 71% of respondents describing their workplace as inspiring.

In addition, the survey asked respondents how frequently their company’s leaders seek out their ideas for change, and the extent to which they feel that their employer listens to them. More than half (57%) of the U.S. respondents reported that the only opportunity they have to suggest changes to management is during performance reviews, and less than two-thirds (64%) of the U.S. respondents said they feel empowered to drive change in their current role.

Commenting on these survey results, researchers warned that “businesses that do not proactively enable their employees with the skills necessary for digital industry, or develop new, continuous methods for engaging employees to suggest and drive change, are likely to face extinction.”

From Benefit Trends Newsletter, Volume 60, Issue 3

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.

Generation Z Values Face-To-Face Business Communication

Generation Z Values Face-To-Face Business Communication

In an apparent break with their technology-obsessed millennial predecessors, members of Generation Z who are starting to enter the workforce are ready to put down their devices, and are more aligned with Generation X in their willingness to engage in face-to-face interactions with co-workers and clients, the results of a survey conducted by communication technology provider 8x8 indicate.

The survey of 1,000 full- and part-time employed workers from across the U.S. who use a computer or phone for their everyday work was conducted in November 2016. The survey sample included 200 Gen Z respondents (ages 18-20), 400 millennial respondents (ages 21-35), and 400 Gen X respondents (ages 36-50).

The findings suggest that Gen Z are less tech-dependent than millennials, and are more similar to Gen X when it comes to adopting high-tech devices and apps in their personal life, with millennial respondents being more likely than Gen Z or Gen X respondents to say they use wearables, connected appliances, and virtual reality.

The results also showed that the Gen Z respondents were more likely than either the millennial or the Gen X respondents to report that they value face-to-face communication, with an emphasis on effectiveness over convenience: while one in four Gen Z respondents said they prefer communicating in person, the millennials were the most likely of the generational groups surveyed to say that face-to-face communication will be less important in the future.

Researchers observed that while millennial work styles and communications preferences clearly differ from those of their Gen X predecessors, Gen Z preferences can best be described as a hybrid of the two. The survey found, for example, that the majority of Gen Z respondents want a physical workspace (57%) combined with the ability to work remotely (48%) and have flexible hours (73%). Additionally, when asked about the types of communication tools they prefer to use, the majority of the millennial respondents said they favor the tools that will save them the most time, whereas the majority of the Gen Z respondents said they prefer the tools that are most effective, even if using them takes more time.

The survey results also showed that when it comes to using traditional workplace tools, Gen Z occupy a middle zone between the high-tech millennials and the older Gen X: less than 20% of the Gen Z respondents said they are likely to use traditional Gen X tools like email or landlines for work, but the Gen Z respondents were the least likely of the generational groups to say they expect to use tools favored by millennials, like messaging and chat apps, in the workplace. However, the results indicated that Gen Z workers are the most committed of the generations to using their smartphone as their main hub of communication: when asked which device they used to take the survey, 62% of Gen Z respondents, but only 31% of millennial and 28% of Gen X respondents said they used their smartphone.

Yet the findings further indicated that the generations generally agree on a number of topics regarding future workplace technologies. For example, of all respondents, more than half said they do not believe they will use email for work in the future, and a majority said they would prefer to use the same tools for work as in their personal life. Moreover, nearly 70% of all respondents said they believe at least some aspects of their current job could be automated by bots today, and around 80% said they anticipate that bots will automate some part of their job in the future.

From Benefit Trends Newsletter, Volume 60, Issue 2

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.