In states that have introduced paid family leave policies, the share of women leaving their job within one year of having a child has fallen substantially, and the gap in workforce participation between women with and without young children has nearly closed over the long term, according the findings of a study conducted by the Institute for Women’s Policy Research (IWPR) and funded by the March of Dimes Center for Social Science Research.
The study, published on January 3, “Reducing maternal labor market detachment: A role for paid family leave,” was written by economists Kelly Jones and Britni Wilcher. Noting that working women in the U.S. often leave the labor force when they have a child because of the lack of a Federal paid family leave policy, the authors posited that having access to paid family leave might allow some women to take temporary leave rather than quitting, which could have significant implications for their labor force participation in the long run. To test this hypothesis, the researchers relied on two policy-based natural experiments: the implementation of state-legislated paid family leave programs in California in 2004 and in New Jersey in 2009.
For the analysis, the authors estimated an event-study difference-in-differences model comparing pre-to-post-policy trends in labor force participation between women with and without minor children in each state. The findings indicated that in the absence of paid leave, nearly 30% of women leave the labor force in the year following a birth, and one in five do not return for more than a decade.
Conversely, the investigation of labor market participation among women in California and New Jersey before and after each state implemented a paid family leave program showed that there was a 20% reduction in the number of women leaving their jobs in the first year after having a child, and a reduction of up to 50% after five years. The effects were found to be the largest for women with higher educational attainment, which, according to researchers, suggests that paid leave policies are especially important for ensuring that the most productive workers remain in the labor market.
“In most U.S. households, when a child is born, the default is that the mom steps away from the labor force at least temporarily,” Jones observed. “If she can do that in a way that guarantees her return to that job and provides partial wage replacement, we are much more likely to encourage her attachment to the workforce.”
Older workers approaching retirement age often have high levels of debt and financial obligations that can result in financial distress, and can negatively affect their well-being in retirement, an article published by the Center for Financial Studies has warned.
“Debt Close to Retirement and Its Implications for Retirement Well-being,” was written by economists Annamaria Lusardi, Olivia S. Mitchell, and Noemi Oggero; and published in July 2019. Using data on 2,672 U.S. adults aged 56-61 from the 2015 wave of the National Financial Capability Study (NFCS), the study found that although more than seven out of 10 of these near-retirees own a home, 37% still have a home mortgage, and 11% have outstanding home equity loans. Moreover, 10% of respondents with mortgages said they had been late with mortgage payments at least once in the previous year, and 9% of those with mortgages or equity loans reported owing more on their homes than they believe they could sell them for.
The analysis further revealed that 6% of these older workers still had student loans, and that 8% of respondents with retirement accounts had taken a loan or a hardship withdrawal from their savings in the last 12 months. Additionally, 36% of respondents said they carry a balance on their credit cards and are charged interest, while 23% reported engaging in expensive credit card behaviors, such as paying the minimum only, paying late or over-the-limit fees, or using credit cards for cash advances. Moreover, 18% of respondents said they had borrowed from alternative financial services, such as payday loan providers, in the past five years.
Broken down by education, the analysis found that the older adults with a college degree were less likely than those with a high school education only to use alternative financial services (10% versus 21%), but were more likely to have a home mortgage (42% versus 33%) or a home equity loan (13% versus 7%). Analyzed by income, the study found that respondents with household income below $35,000 were 13 percentage points more likely to use alternative financial services than respondents with income between $35,000-$75,000 (30% versus 17%), while just 7% of those with income over $75,000 reported doing so.
To shed light on these behaviors, the authors looked at the respondents’ answers to six questions designed to test their financial literacy. The results showed that those who had higher levels of financial literacy were less likely to use alternative financial services, to use credit cards in expensive ways, or to have auto loans close to retirement. The authors also cited the results of an additional analysis showing that significant shares of near-retirees do not know how much interest they are paying on their mortgage, credit cards, or auto loans; and that even larger shares of these older workers do not compare offers before taking out a mortgage, credit card, or loan.
In addition, the authors investigated whether behavioral biases could be partially responsible for the observed borrowing patterns. They found evidence that lack of self-control and impulsive spending behavior can help explain why some older adults have high-cost, revolving consumer credit together with low-yield liquid savings. Researchers pointed out that individual debt choices may also be affected by social norms, including shared ideals that drive behavioral expectations around finances, and reduced social stigma associated with debt problems.
Finally, the study’s authors recommended that policy-makers and financial services providers help people cope with the risks associated with carrying debt later in life by organizing programs targeted at workers to discuss debt and debt management, such as workplace financial wellness programs that cover personal finance topics beyond investing and saving.
As recruiters and hiring managers are under substantial pressure to find the right candidates for open positions as quickly as possible in the current competitive job market, they often fail to adequately measure the quality of their hires, both during and after the recruiting process, a recent study released by recruitment platform JazzHR has observed.
The findings of the report, published in December 2019, are based on an analysis of survey data from more than 5,000 of the platform’s small and mid-sized business customers. The survey found that only 64% of respondents currently measure the quality of their hires, while 36% do not. In addition 58% of the businesses surveyed reported that they do not start measuring the quality of a hire until 90 days after the candidate has been recruited, and another 8% indicated that they wait six months before starting to assess the quality of a hire.
The results also showed that when asked about how they measure the quality of a hire, just 20% of the businesses surveyed said that they start measuring this metric as soon as a candidate has been hired using pre-hire metrics, like time-to-hire and assessment scores; while 38% of respondents reported measuring the quality of new hires based exclusively on post-hire metrics, like performance, productivity, and cultural fit. Researchers pointed out that tracking pre-hire metrics provides a fuller picture of each new employee, which employers can then use to adjust how they source and engage top talent starting at the top of the recruiting funnel.
The report also provided recommendations on what companies can do to improve their “Quality of Hire” (QoH) scores. The study defined QoH as the value a new hire adds to the company based on his or her contribution to its long-term success. First, researchers said, employers should define what employee success means to their organization by determining what values and competencies the company’s leadership and team as a whole prioritize. Specifically, they advised, companies should draw up a comprehensive list of employee success criteria, including both pre-hire and post-hire metrics like pre-employment assessments scores, time-to-hire, ramp-up time, and productivity.
Second, the report advised companies to calculate their QoH scores by assigning a value and a weight to each selected criterion based on its importance to the organization. Third, researchers suggested collecting feedback on new employees from managers between two to six months after they start. Fourth, the report recommended that employers track each individual’s QoH scores throughout the employee lifecycle, and use the individual’s scores over time to calculate an overall score.
Looking at the organization as a whole, the report recommended that employers consider how their QoH scores have changed over time, and which external factors might be affecting the hiring process. Researchers also advised companies to consider whether certain departments or teams are scoring higher or lower than others; and, if so, how the company’s recruitment process can be adjusted to standardize QoH across the organization.
The leading concerns of global chief executives for 2020 include a possible recession, difficulties attracting and retaining talent, and trade uncertainty, according to the findings of a survey released on January 2 by The Conference Board.
The annual survey asked nearly 750 CEOs and nearly 800 other C-Suite executives primarily from four regions (Europe, Latin America, Asia and the U.S.) which external and internal issues they believe merit the most immediate attention in 2020.
The CEOs and other C-Suite executives surveyed globally ranked the risk of a recession as their top external worry in the year ahead, followed by uncertainty about global trade, more intense competition, and global political competition. Of the 18 external “hot-button issues” they were asked about, the CEOs surveyed globally indicated they are least worried about terrorism, volatility in energy prices, and uncertainty in corporate tax policies. However, the responding CEOs expressed slightly more concern about the impact of climate change on their business than in the past, ranking it ninth on the list of external threats, up from 11th in 2019.
Broken down by country, the U.S. CEOs surveyed ranked the risk of a recession as their biggest external concern in 2020, followed by more intense competition and a tight labor market, with uncertainty about global trade and global political competition tied for fourth place. Meanwhile, the Chinese CEOs polled ranked trade uncertainty as their top worry, tied with the risk of a recession; and expressed much higher levels of concern about the effects of economic sanctions than their counterparts in other regions.
The findings also showed that concerns about cybersecurity remain high, with this issue ranking seventh among the CEOs surveyed globally, and sixth among the CEOs surveyed in the U.S. When asked about how they are managing cybersecurity issues, more than 70% of responding CEOs globally said they plan to increase their cybersecurity budget in 2020. However, nearly 40% of these CEOs admitted that their organization lacks a clear strategy for dealing with the financial and reputational impact of a cyber attack or a data breach.
In addition, the survey asked the CEOs to identify their leading internal concerns for 2020. Attracting and retaining top talent was ranked as the top concern by the responding CEOs not just globally, but in the U.S., Europe, Latin America, and China. The other main concerns cited by the responding CEOs globally were creating new business models in response to disruptive technologies, followed by creating a more innovative culture and developing next-generation leaders. The CEOs surveyed globally indicated that of the 19 potential internal concerns listed, they were least worried about providing health care bene-fits for employees, labor regulations, or implementing equal pay for equal work. However, the women C-Suite executives surveyed globally ranked equal pay as their sixth-biggest internal concern.
As the Fourth Industrial Revolution (4IR) blurs the lines between people and technology, an initial response, HR4.0, is being developed by companies to support employees through this rapid transformation of the workplace, according to a white paper recently released by the World Economic Forum.
Published in December 2019, “HR4.0: Shaping People Strategies in the Fourth Industrial Revolution,” was based on a series of consultations with chief human resources officers and other experts. The paper explored why the 4IR is creating the impetus for transformation in people strategies and HR practices, what businesses leaders can do to respond, and how organizsations are currently reacting to the pressure to change.
“HR leaders will increasingly need to develop skills related to data analytics, understanding and helping others understand technology, systems thinking, design thinking, story-telling, understanding the emerging field of mapping jobs, skills and tasks, and conducting strategic workforce planning,” researchers predicted.
The paper identified six key imperatives that business and HR leaders will need to implement to help their organization adapt to the 4IR. First, researchers said, as companies operate more distributed business models, leaders will have to develop new leadership capabilities. The second imperative for businesses is to manage the integration of technology in the workplace.
The third critical task is to enhance the employee experience. The authors pointed out that the increasing complexity of the workforce and the use of technology is changing the way work is experienced, and that HR has an important role to play in defining, measuring, and enabling the meaningful employee experience in the 4IR.
The fourth imperative is building an agile and personalized learning culture. According to researchers, HR can play a leading role in fostering a culture of lifelong learning as the demand for certain skills declines and the demand for new skills emerges.
The fifth critical task of HR leaders is to establish metrics for valuing human capital. The authors observed that the mutually beneficial relationship between the workforce, the organization, and society will make it essential for HR to build a compelling case for establishing viable and scalable measures of human capital as a key performance driver, and to continuously demonstrate that there is a clear business case for valuing human capital.
Finally, the authors said, the sixth imperative is for organizations to embed diversity and inclusion, while emphasizing that social, economic, and political changes represent an opportunity for organizations to advance inclusion and diversity goals. Researchers called upon HR to go beyond compliance requirements to create a culture of diversity and inclusion that focuses on changing behaviors, attitudes, and mindsets; and that is integrated into every aspect of the organization, including recruitment, rewards, and performance management.
A majority of employees would like to have access to their wages before their scheduled payday, signaling that flexible pay is an attractive benefit for many workers, according to the findings of a survey conducted by the Workforce Institute at Kronos Incorporated.
The survey of 1,180 employed U.S. adults was conducted October 3-7, 2019. The aim of the survey was to gain a better understanding of how immediate access to earned wages, or on-demand pay, and financial wellness can support recruitment and retention. Nearly three-quarters (72%) of the workers surveyed said they would like to have access to their wages before their scheduled payday, but only 6% reported that they currently have such access.
The results also showed, however, that 57% of respondents said they would work harder and stay longer at a company that offers on-demand pay, and 51% reported that they consider on-demand pay a more attractive benefit than additional paid time off.
Broken down by industry, the survey found that 65% of retail workers, 61% of health care workers, and 54% of manufacturing/construction employees think they should not have to wait until their scheduled payday to access their earned wages. The findings also indicated that respondents with an annual household income of less than $50,000 were more likely than those with an annual household income of more than $50,000 to say they would like to have early access to their earned wages (87% vs. 67%).
When asked why they would like early access to their earned wages, 66% said they would use the money to cover bills, especially emergency expenses such as car repairs (32%) or unplanned medical care (19%). By contrast, relatively small shares of respondents said they want to access their wages early to pay for a night out (11%) or Black Friday/Cyber Monday/holiday shopping (10%), or to cover student loan repayments (6%).
In addition, 70% of the workers surveyed said they believe the five-day/40-hour pay period is outdated, including 72% of respondents in health care, 66% of those in retail, and 59% of those in manufacturing/construction.
The survey also asked employees what fees for accessing their wages before their scheduled payday they would consider reasonable. Around three-quarters of hourly (75%) and salaried (71%) respondents said they would be willing to pay a fee of up to $5 to access $50 of their wages early.
The findings further revealed that large shares of employees are under financial pressure, with 53% of respondents reporting that financial stress distracts them from their work. Broken down by age group, 67% of respondents aged 35-44, 65% of respondents aged 18-34, but just 39% of respondents aged 45+ indicated that financial stress distracts them from their work.