Representation of Women on Boards Shows Signs of Expanding

Representation of Women on Boards Shows Signs of Expanding

The percentage of women board members on the corporate boards of companies in the Russell 3000 index exceeded 20% in the second quarter of 2019, marking the first time women have held more than one-fifth of Russell 3000 seats, according to the findings of a quarterly index that tracks gender representation on corporate boards released by corporate governance solutions provider Equilar.

The “Equilar Q2 2019 Gender Diversity Index” (GDI), published on September 11, is the latest report since the GDI was first published in January 2017. Researchers noted that at that time, just 15% of boards seats in the Russell 3000 index—an index that seeks to serve as a benchmark of the entire U.S. stock market by tracking the performance of the 3,000 largest publicly-traded U.S. companies—were held by women, and less than 25% of board vacancies that came open were being filled by women.

The latest GDI found that the percentage of women on Russell 3000 boards increased to 20.2% in Q2 2019, up from 19.3% in the previous quarter, and from 16.9% in Q1 2018. This acceleration caused the GDI to increase to 0.40, with 1.0 representing parity among men and women on corporate boards across the Russell 3000. The index also reported that 41.9% of newly appointed directors in Q2 2019 were women, down slightly from 46.8% in Q1 2019.

In addition, the index showed that as of Q2 2019, just 10.8% (309) Russell 3000 boards were still without a single woman member. Researchers pointed out that this represents a significant decline from the 376 boards without a woman member in Q1 2019. They also noted that the percentage of women who joined these boards as first-time public company board members has surpassed 50% three of the past four quarters.

The index also revealed, however, that just 48 Russell 3000 companies have currently achieved gender parity, while 2,811 have not. According to researchers, the Russell 3000 would require an annual growth rate of women on boards of 8.56% to reach full gender parity by 2030. The GDI Q4 2018 report had projected that based on the rate of growth observed at that time, gender parity on Russell 3000 boards would be achieved by 2034.

New Systems Approach Is Needed To Promote Workforce Development

New Systems Approach Is Needed To Promote Workforce Development

New Systems Approach Is Needed To Promote Workforce Development
While some U.S. workers are finding that their knowledge and skills are no longer up-to-date or in demand on the labor market, many employers are struggling to recruit workers who have the skills and knowledge required to keep their company competitive over the long term, according to a study published by the public policy research organization the RAND Corporation.

The report, “A System That Works: How a New Workforce Development and Employment System Can Meet the Needs of Employers, Workers, and Other Stakeholders,” was published on September 19. The authors observed that as the American workplace changes in response to new technologies, globalization, and demographic shifts, employers still need workers with industry-specific knowledge, but they also increasingly value skills like effective communication and critical thinking.

Applying a systems approach to reconceiving the current workforce development and employment system, researchers attempted to identify the ways in which the system is failing both workers and employers, and to craft a plan for how educators, employers, workers, and other stakeholders can rebuild the current system to bring about the necessary changes.

First, the authors observed, the U.S. workforce development and employment system has changed little since the mid-20th century, and underperforms in a fast-paced and rapidly changing environment in which lifelong learning has become essential. They pointed out that as automation and shifting consumer demands have rendered some of the skills individuals learned years ago obsolete, many workers have an immediate need to acquire new knowledge and skills. In particular, researchers noted, there is greater demand for workers who can master information synthesis, creativity, problem-solving, communication, and teamwork; even as there is still substantial demand for skilled workers in positions that do not require post-secondary degrees or specific credentials.

The study also warned, however, that there is currently no well-defined path for workers to get the training they need. According to researchers, post-secondary training and education institutions generally offer the same structure of credentials and degrees they did years ago, and may be constrained in their ability to respond to changing job requirements by a lack of funding. Meanwhile, they added, in the workplace, employers are often willing to pay for additional training only for their more educated employees.

To tackle these challenges, the study’s authors called for the creation of a workforce development and employment system that provides multiple on-ramps for transitioning workers to access training and employment opportunities, while matching workers and jobs. To build this system, the authors recommended developing data, metrics, and tools to monitor the current system in order to identify where it is failing, and where new approaches are warranted. They also suggested using gaming, competitions, and other strategies to measure the impact of policy interventions, and to create an open clearinghouse that collects and shares information about promising approaches.

Annual Wage Growth Continues To Accelerate In a Tight Job Market

Annual Wage Growth Continues To Accelerate In a Tight Job Market

In the second quarter of 2019, wages for U.S. workers were 4.0% higher than at the same point in 2018, with the average wage level increasing $1.09 over the year to reach $28.54 an hour, according to the findings of a quarterly analysis of workforce trends performed by the ADP Research Institute.

The results, released on July 24, indicated that this year-on-year wage growth as of June 2019 was driven by large wage gains for workers in the manufacturing (4.4% wage growth, $29.83 hourly wage) and construction (4.4% wage growth, $28.65 hourly wage) industries. The survey also revealed that the service sector industries that contributed most to annual wage growth were information (4.2% wage growth, $41.56 hourly wage), trade (4.3% wage growth, $25.27 hourly wage), professional and business services (4.1% wage growth, $36.45 hourly wage), and leisure and hospitality services (4.2% wage growth, $17.42 hourly wage).

In addition, the analysis looked at the wage gains of job switchers as of June 2019. The findings indicated that job switchers in the information industry made the largest gains (9.7% wage growth, $41.08 hourly wage), and that job switchers in professional and business services and construction also experienced strong wage growth of 8.3% and 8.7%, respectively. However, the results showed that job holders in trade, the largest sector, saw more wage growth than workers who switched into the sector (5.2% versus 3.8%), but lagged in terms of annual employment growth (0.6%).

Broken down by region, the analysis found that the region with the highest average hourly wage rate as of June 2019 was the Northeast ($31.99), followed by the West ($30.69). Yet the findings also indicated that the highest level of annual wage growth was in the Midwest (4.5%), even though this region had the lowest hourly wage rate ($26.57) and the lowest employment growth rate (1.0%). The results further showed that job switchers in the West had the strongest average wage growth (7.3%), while workers in the South and the Northeast had the lowest wage growth (3.6%). Broken down by firm size, the analysis revealed that workers at large firms had the highest wage growth (5.1%) and employment growth (3.1%) rates.

Researchers observed that the tight labor market is leading companies to increase compensation, with businesses in most sectors having to raise their wages to retain their skilled workers. They also noted that female job holders have been experiencing larger wage gains than their male counterparts: since January 2019, female job holders registered average wage gains of 5%, while male job holders had average wage gains of 4.6%.

Employee Benefit Packages Show Signs Of Stability Despite Cost Pressures

Employee Benefit Packages Show Signs Of Stability Despite Cost Pressures

U.S. employers have largely maintained the status quo in terms of their benefit offerings in 2019, but they are also looking for opportunities to make changes to their benefit programs that lower costs while still enabling them to attract and retain talent in a competitive labor market, according to the findings of a survey published by professional services provider PwC in June 2019.

The “Health and Well-being Touchstone Survey,” which was completed in spring 2019, asked U.S. employers and employees for their views on the current and projected status of their rewards programs. The results indicated that employers expect medical costs to increase 6.5%, or 4.2% after plan changes, from 2018 to 2019. According to researchers, this trend is consistent with the actual increase of 6.2% from 2017 to 2018.

The survey also showed that employers are still seeking to reduce their long-term retirement benefit liabilities, with the shift away from defined benefit plans and toward defined contribution plans continuing. Specifically, the survey found that just 20% of employers offer a defined benefit plan; and that of those, 37% have frozen entry to these plans for new participants, up from 29% in 2018.

While 82% of the employers surveyed said they believe their current plans and practices provide the framework necessary for retirement readiness, less than half indicated that they think that their employees will be ready to retire when they want to. The findings also revealed that the prevalence of retiree medical benefits is continuing to decline, with less than one-third of employers reporting that they provide any kind of stipend, subsidy, or coverage for retiree health costs.

The survey results further suggested that employers are increasingly recognizing the importance of managing employee stress, burnout, and other mental health issues, with the share of employers saying they offer stress management programs rising sharply from 40% in 2018 to 61% in 2019. Researchers pointed out, however, that many of these employers are not incorporating their stress management programs into their overall wellness and well-being programs.

Moreover, the survey asked both employers and employees what they consider to be the most important benefit offerings or employer attributes that would attract and retain employees. A comparison of the responses showed that there is a disconnect between the views of employers and employees. For example, 86% of employees, but just 49% of employers, said they think flexibility and work/life balance options are likely to attract talent; while 74% of employees, but only 18% of employers, said they believe inclusion and diversity are important.

The survey also examined the flexibility, time off, and work/life balance benefits offered by employers. The surveyed employers reported offering full-time employees an average of 10.8 annual holidays, 9.1 paid sick leave days, and 12 paid vacation days. Around 60% of employers said they provide parental leave, with maternity leave being slightly more common than paternity leave. The work/life benefits offered most frequently by employers were found to include mothers’ rooms (89%), walking or stand-up desks (80%), free parking (78%), and on-site gym and/or fitness classes (59%).

Employers Report an Ongoing Commitment to Providing Employee Benefits

Employers Report an Ongoing Commitment to Providing Employee Benefits

While employee benefit offerings are largely holding steady in the U.S. amid a stable labor market and regulatory environment, certain benefits, such as student loan repayment programs, paternity leave, telecommuting, standing desks, and telemedicine are becoming increasingly common, according to the results of an annual survey on employee benefits released by the Society for Human Resource Management (SHRM) on June 25.

In the survey, which was conducted in April 2019, 2,763 randomly selected HR professionals were asked whether over the past 12 months their organization had increased, decreased, or sustained their benefit offerings in certain categories. When the respondents were asked which benefit categories they consider most important, the leading answer was health care, followed by investment and retirement, leave, and flexible working.

The findings indicated that family-friendly and wellness benefits in particular are continuing to grow in popularity. The results showed, for example, that 60% of the employers surveyed currently offer standing desks, compared to one-quarter just five years previously. The survey also found that onsite lactation or mother’s rooms are offered by 51% of employers, up 16 percentage points from 2015.

The survey provided clear confirmation that leave and flexible working benefits are gaining traction, with telecommuting on a part-time basis now being offered by 42% of employers. The results also indicated that the share of employers offering family leave above the time required by the Family and Medical Leave Act (FMLA) increased by six percentage points between 2018 and 2019. Moreover, the findings showed that although the share of employers offering paid leave benefits for new fathers went up only slightly between 2018 and 2019, it has increased 14 percentage points over the past five years.

In terms of health care benefits, the survey showed that 70% of respondents have maintained their health care benefits at existing levels in 2019, with just 20% saying they have increased benefits, and only 3% reporting that they have decreased benefits. The findings also showed that of the health plan types, preferred provider organizations (PPOs) continue to be the most popular health insurance option, with 85% of the organizations surveyed indicating that they offer PPO plans. The second-most popular plan type was found to be high-deductible health plans linked to a savings or spending account, with 59% of respondents reporting offering such plans.

Moreover, the results indicated that the share of employers providing telemedicine and telehealth services increased by 10 percentage points between 2018 and 2019. Additionally, 71% said they offer long-term disability benefits, 61% indicated that they offer short-term disability benefits, and 27% said they offer accident insurance.

While still relatively rare, the share of employers offering company-provided student loan repayment benefits was found to have risen from 4% in 2018 to 8% in 2019. According to researchers, this category is expected to gain additional traction if pending Federal legislation is approved. A further 56% of respondents said they offer tuition assistance.

In addition, the findings indicated that the share of companies offering relocation lump-sum payments increased by six percentage points between 2018 and 2019. Researchers noted, however, that while housing and relocation benefits were once commonly provided by employers, they are now offered by less than one-third of the organizations surveyed.

Slow Decision-Making Can Lead To Recruitment Challenges

Slow Decision-Making Can Lead To Recruitment Challenges

To recruit and hire employees in the current digital era and hypercompetitive labor market, companies have to redefine the role of the hiring manager to ensure that they are acting decisively and quickly, as a lag in decision-making can cause organizations to lose out on the best candidates, according to a study recently released by technology consultancy Gartner, Inc.

In a report released on June 26, researchers cited an analysis showing that more than three-quarters of hiring managers do not act decisively. According to the study, the characteristics of decisive hiring managers include focusing on prioritizing future talent needs, broadening the candidate funnel, and sharing hiring decisions with experts across the organization.

The research indicated that decisive hiring managers can be highly effective, finding that such managers hire 10% more high-quality candidates and 11% fewer low-quality candidates than typical hiring managers. The study also found that organizations that reward decisive hiring manager behaviors report a 17% reduction in time-to-fill.

The results of the analysis further revealed that the amount of time it takes a hiring manager to make an offer after interviewing is currently 33 days, up 84% from 2010 to 2018. According to researchers, this longer decision-making stage results in a 16% reduction in the acceptance of offers by candidates. The findings also showed that only 31% of hiring managers understand the vision their business leader has for their team.

Researchers recommended that recruiting executives and their teams change how they partner with hiring managers. Specifically, they advised organizations to avoid relying on the hiring manager alone to determine and articulate future talent needs, and to instead encourage recruiting leaders tap into sources beyond the hiring manager to define hiring needs based on the future talent strategy of the organization, and not simply on the manager’s short-term needs.

Citing evidence that candidates trust a hiring manager nearly four times as much as they trust a recruiter to provide the information they need to make a decision, researchers further recommended that hiring managers spend more of their time engaging with candidates. They also suggested that the recruiting function encourage hiring managers to prioritize candidate engagement, motivate leaders by linking hiring to their leadership role, and make it easier for hiring managers to go beyond their existing networks in sourcing talent.

The report pointed out that additional sources of information on future talent needs include business leaders, the workforce planning team, and the analytics team, who can provide insight into critical questions regarding the skills the business needs to grow, the skills and roles their competitors are hiring for, and the future development of the local labor market.