Small Businesses Provide Employee Benefits to Recruit and Retain Talent

Small Businesses Provide Employee Benefits to Recruit and Retain Talent

As their employee numbers grow, small businesses increasingly seek to offer a competitive compensation package that includes comprehensive benefits, including health benefits, retirement benefits, family leave, and paid time off, according to the findings of a recent survey of small business owners and managers conducted by business-to-business ratings and review firm Clutch.

The results of the survey of 529 owners and managers of small businesses in the U.S. (defined as having one to 500 employees) were released on April 18. Respondents were asked about their benefit plans for 2019.

The findings indicated that nearly half (47%) of the small businesses surveyed offer benefits, and that businesses are significantly more likely to offer benefits as they hire more employees. For example, while just 32% of businesses with 2-10 employees said they offer benefits, 68% of companies with 11-50 employees and 76% of firms with more than 50 employees said they provide benefits.

The results also showed that of the small businesses surveyed that offer benefits, 69% provide health benefits, 52% offer retirement benefits, 48% provide family leave, 45% offer paid time off (PTO), 33% provide in-office benefits, and 17% offer student loan repayment. Of the businesses that offer PTO, 28% reported providing 11 to 15 business days off.

When asked if they plan to expand their benefits offerings in 2019, 56% of the small businesses surveyed said they intend to do so: 19% plan to begin offering PTO, 15% expect to start offering health benefits, 14% plan to start providing in-office benefits, 11% expect to begin offering retirement benefits, 11% are considering offering family leave, and 8% plan to introduce student loan repayment. Moreover, when the small businesses that intend to offer new benefits in 2019 were asked about their reasons for doing so, 30% cited employee requests, 27% said they want to reduce employee turnover, 13% said they are doing so in response to legal requirements, and 9% indicated they are doing so as a result of union negotiations.

When asked about their strategies for gaining access to human resource services, 25% of the small businesses surveyed said they have full-time, in-house HR staff; 12% reported that they have part-time, in-house HR staff; 9% said they contract with an HR consultant, 8% said they work with a professional employer organization, and 6% indicated that they work with an outsourcing service. However, 30% of the respondents admitted that they do not invest in formal HR services.

The survey also found that there is a strong association between having access to formal HR services and offering benefits: whereas 64% of respondents that reported having some level of HR services offer benefits, just 10% of the small businesses surveyed that said they lack access to formal HR services provide benefits.

From Benefit Trends Newsletter, Volume 62, 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 © 2019 Liberty Publishing, Inc. All rights reserved.

Millenial Managers Are Already Having an Impact on Workplace Planning

Millenial Managers Are Already Having an Impact on Workplace Planning

As members of the millennial generation enter the managerial ranks, they are bringing new approaches to hiring and workforce planning, according to a report recently published by freelancing website Upwork.

The third annual “Future Workforce Report,” released on March 5, explores the hiring behaviors of more than 1,000 U.S. hiring managers surveyed in October 2018. The focus of this year’s report is on generational impacts on the workforce, and specifically on how millennials, as well as some older members of Generation Z, are shaping the future of work.

The study found that 48% of the younger generation managers surveyed have already reached the director level or higher, and are thus having a major influence on workforce planning. Researchers noted that this influence will continue to grow, as these younger generations will make up 58% of the workforce by 2028, up from 38% today.

The findings also indicated, however, that the “always-on” workplace is taking a toll on younger managers, as 84% of millennial managers have reported experiencing job burnout. The study further suggested that conventional methods of hiring are no longer providing much relief, as 42% of younger generation hiring managers said they believe hiring has become more difficult in the past year, while just 18% said they think it has become easier.

In addition, the results indicated that supporting remote teams is the new norm, with 69% of the younger generation managers reporting that they have team members who are allowed to work remotely. Of the managers who said they have approved remote work options, 74% reported having team members who spend a significant portion of their time conducting their jobs remotely. By contrast, just 58% of baby boomer respondents said they have workers who work a significant portion of their time remotely.

The study also found that younger generation managers are 28% more likely to utilize remote workers than baby boomers, and anticipate that two out of five full-time employees will work remotely within the next three years. The study projects that by 2028, 73% of all teams will have remote workers. The results were approximated for future projections based on the current results for the respondents of the youngest cohort, Generation Z.

The report further emphasized that younger generation managers are particularly likely to recognize the need for better access to rapidly-changing skills and constant reskilling. However, younger generation managers were found to have a greater tendency than older managers to express support for a more independent workforce approach, as the survey indicated that younger generation managers were nearly three times more likely to say that individuals should be responsible for their own reskilling than baby boomer managers.

The study predicted that by 2028, non-traditional, flexible talent, like freelancers and temporary and agency workers, will account for 24% more of departmental headcount than they do today.

According to the report, the younger generation managers were more than twice as likely as the baby boomer managers to have increased their usage of freelancers in the past few years, and they are projected to continue increasing their usage in 2019.

The younger generation managers were also found to be more than twice as likely as the baby boomer managers to report having engaged freelancers for ongoing, strategic partnerships across multiple projects, rather than for one-time, one-off projects. The primary reasons respondents cited for using more freelancers are to increase productivity, access specialized skills, and drive cost efficiencies.

From Benefit Trends Newsletter, Volume 62, Issue 4

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 © 2019 Liberty Publishing, Inc. All rights reserved.

Workers Express Concerns About Compensation and Workload

Workers Express Concerns About Compensation and Workload

In the decade since the onset of the financial crisis of 2008, employees have become more confident and secure in the belief that their employer cares about them, but have become less satisfied with their workload, career progression, and pay and benefits, according to the findings of a report published on September 11 by organizational consulting firm Korn Ferry.

The report’s findings are based on an analysis of engagement data for more than one million U.S. employees at around 180 companies for the 2008-2018 period. The study found that there have been distinct shifts in employee attitudes toward their workplaces in the 10 years since the start of the Great Recession.

The analysis found that employees are 28% more likely in 2018 than in 2008 to say they believe that their immediate managers support their development, and are 15% more likely to report that their organization demonstrates care and concern for employees. The results also suggest that employees are feeling more confident in the future, as they are 17% more likely in 2018 than in 2008 to say they believe their companies will be successful over the next 2-3 years.

The findings indicated, however, that employees have more negative opinions today than they did a decade ago about several issues, including pay and benefits, workload, career paths, and training and performance management. The study found that compared to 10 years previously, workers in 2018 are 15% less likely to agree that the benefits their companies offer them are competitive, and they are 4% less likely to say they believe their pay is fair considering the compensation of people doing similar jobs in other companies. Moreover, compared to 10 years ago, employees in 2018 are 10% less likely to indicate that they experience strong cross-team support within the company, and are 11% less likely to say they believe that decisions are made at the lowest appropriate level.

In addition, the results suggested that today’s employees are increasingly worried about their workload, and lack certainty about their career progression. The analysis showed that compared to their counterparts in 2008, workers in 2018 are 10% less likely to say they have a good idea of the possible career paths available to them, and they are 6% less likely to agree there are enough people to do the work in their work group.

“Today’s organizations run much leaner and unfortunately, managers are sometimes too strapped with their own workloads to address the needs of their employees,” said Korn Ferry senior principal Mark Royal. “Over the past 10 years, there has also been a shift from hierarchal management to flatter, more interdependent working environments. It’s important that organizations understand the implications this has on managing employees.”

From Benefit Trends Newsletter, Volume 61, Issue 10

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 © 2018 Liberty Publishing, Inc. All rights reserved.

Adjusting Compensation to Address Fairness

Adjusting Compensation to Address Fairness

In response to competitive pressures to improve their pay-for-performance programs and to ensure fair pay throughout the workplace, U.S. employers have been making adjustments to their employee compensation and performance management programs, according to the results of a survey by human resources consultancy Willis Towers Watson.

The survey, which was conducted in April 2018, asked 1,949 employers worldwide, including 374 U.S. employers, about their compensation practices. The results showed that several factors are prompting employers to make or consider making changes to their programs, including cost (71%), manager feedback (63%), the changing marketplace (61%), and feedback from employees (59%).

The survey findings suggested that in particular, the changing nature of work and new skills requirements are spurring employers to reassess their compensation programs. When asked how they expect to manage their base pay and annual incentive plans in the coming year and over the next three years, 45% of respondents said they are planning to or are considering redesigning their annual incentive plans, and 37% indicated they are planning to or are considering changing the criteria for salary increases. Of the employers who reported no plans to redesign their programs, most said they are adjusting the importance of the factors used to set base pay increases.

The results further indicated that although the employers surveyed see achieving pay decision transparency as a challenging task given the increasing complexity surrounding pay decisions, more than half (53%) are planning to or are considering improving transparency around pay decisions.

In addition, the survey found that employers are recognizing the need for new technology to support pay decisions: while less than half of respondents (45%) indicated that they are using some form of software beyond spreadsheets to implement their pay programs, 52% said they are planning to or are considering introducing new technology.

When asked about their approaches to performance management, 40% of the employers polled said they are planning to or are considering changing the focus of their performance management strategy to include current and potential possession of the skills needed to drive the business in the future. By contrast, just 17% of respondents said they have eliminated performance ratings or plan to do so this year.

Moreover, the survey found that most of the U.S. employers surveyed report having formal processes in place to prevent bias or inconsistency in their hiring and pay decisions: nearly two-thirds of U.S. respondents indicated they have established formal processes across a range of areas, including annual incentives (64%), hiring decisions, (63%), starting salaries (62%) and base pay increases (62%).

Nonetheless, 60% of the U.S. respondents said they are planning to take some additional action this year to prevent bias in hiring and pay decisions. Of the U.S. employers surveyed, significant shares said they are planning to or are considering reevaluating their recruitment and promotion processes (44%), conducting a gender pay or pay equity diagnostic (42%), or increasing communication of policies and benefits that promote an inclusive culture (33%). The results also indicated that many U.S. employers are taking steps to support creating an inclusive and diverse workforce, with nearly half reporting that they have established or support internal networks (45%) or improved flexible work arrangements (44%).

From Benefit Trends Newsletter, Volume 61, Issue 7

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 © 2018 Liberty Publishing, Inc. All rights reserved.

The Challenges of Moving Up To the Top Job

The Challenges of Moving Up To the Top Job

The chief executive officers of some of the world’s largest companies report that although they felt confident in their experience and operational know-how when they were appointed CEO, they struggle with the human demands of the role, and recognize that they need to transform themselves in order to keep up with the pace of business disruption, according to a study conducted by leadership advisory firm Egon Zehnder.

The study, “The CEO: A Personal Reflection,” explores the human side of the CEO role. Released on April 17, the report’s findings are based on a survey of 402 CEOs from companies headquartered in 11 countries who lead organizations with estimated combined revenues of $2.6 trillion. The study found that a majority of CEOs believe they had the hard skills and professional experience to step up to the role, but found certain personal aspects of the role more challenging than they had expected: while 74% of respondents said their prior achievements and experience prepared them to be CEO, less than one-third (32%) said that with hindsight, they felt fully prepared. In addition, 50% of the respondents said driving culture change had turned out to be more difficult than they had anticipated, and 48% indicated that finding time for themselves and for self-reflection turned out to be harder than they had expected.

The findings further indicated that many of the CEOs surveyed believe they lacked some necessary supports before stepping up to their current position, with 44% of all respondents—54% of those promoted externally and 36% of those promoted internally—saying their appointment was not part of a planned and formal succession process. The survey also showed that the CEOs appointed from within a company felt less prepared than those hired from outside: only 28% of internally-selected CEOs said they felt fully prepared, compared to 38% of external hires. Moreover, while 65% of respondents said there was some succession planning underway for their own successors, just 32% said that there was currently a clear process in place.

The survey results also suggested that the CEOs are moving toward a more reflective and collaborative approach to leadership, as they recognize the importance of these soft skills and their need to adapt and change. More than half (54%) of respondents agreed that transitioning into the role required an intense period of personal reflection, and 79% said they recognized they needed the capacity to transform themselves as well as their business. However, while 78% of the CEOs said they are comfortable admitting mistakes and 70% said they are comfortable taking the heat for unpopular business decisions, only 57% of CEOs indicated they are comfortable showing emotions.

From Benefit Trends Newsletter, Volume 61, 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 © 2018 Liberty Publishing, Inc. All rights reserved.

A Strong Value Proposition Can Boost Employee Engagement

A Strong Value Proposition Can Boost Employee Engagement

Whether a company brings out the best in its workers depends on the health of the organization’s engagement ecosystem, including the value proposition companies offer current and prospective employees, according to a report released by The Engagement Institute, a joint venture of The Conference Board, Deloitte Consulting LLP, Mercer I Sirota, ROI Institute, and The Culture Works.

The report, “The DNA of Engagement: Moments That Matter Throughout the Employee Life Cycle,” was released on March 1. The authors used data from surveys, focus groups, and interviews to examine the interconnected factors that attract employees to organizations, keep them engaged, and encourage them to stay. Researchers also looked at the critical moments that affect the employee experience at work, and recommended strategies that organizations can implement to attract, retain, and engage employees.

According to the report, the most critical components that shape an organization’s engagement ecosystem is the employee value proposition, or the tangible and intangible deal that organizations provide in exchange for employee effort, commitment, and performance. The authors pointed out that the employee value proposition is a product not only of the explicit statements made by employees and actions by the organization, but of the implicit assumptions and observations employees make over time.

Researchers emphasized that individual employees have their own “personal ecosystem” that changes over the course of their career, and that is shaped by numerous moments they experience. The authors observed that when faced with critical moments in an employee’s life cycle that may affect his or her level of engagement, key stakeholders, including the employee’s managers, and coworkers, may struggle to respond adequately, and to ensure that the employee’s experience remains positive.

The report recommended that organizations take three key actions to strengthen overall employee engagement. First, researchers encouraged employers to promote an employee value proposition using empathy in the workplace. Specifically, they advised organizations to design and implement programs that support employees in how and where work gets done, prepare leaders to respond to employee concerns with an authentic tone of support and solidarity, and support supervisors who support employees in difficult circumstances by showing sensitivity to their workload.

Second, the study’s authors advised organizations to provide programs to assist employees at every stage of the career life cycle. They encouraged organizations to engage individuals from the start of their career to retirement by providing robust onboarding programs for new employees, training and development for junior-level employees, and processes to enable later-stage employees to connect with leaders and voice their concerns. They added that employers can make all employees feel valued by offering them training in newer technologies and other skills.

Third, researchers recommended that employers prepare for and seize upon “the unscripted moments.” The study’s authors observed, organizations can shape a favorable experience by ensuring that leaders are approachable, show heightened awareness during daily interactions, and demonstrate behaviors that build trust.

From Benefit Trends Newsletter, Volume 61, Issue 4

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 © 2018 Liberty Publishing, Inc. All rights reserved.