The program, created in SECURE 2.0, addresses student loans, which are considered a significant impediment to retirement savings.

Reported by Amy Resnick

The Internal Revenue Service published guidance Monday to assist plan sponsors providing or planning to provide matching contributions based on employees’ qualified student loan payments.

The IRS published Notice 2024-63, which uses a question and answer format, to illustrate the rules for employers with 401(k), 403(b) and governmental 457(b) plans to provide matching contributions based on qualified student loan payments, abbreviated as QSLP, rather than based only on elective contributions to retirement plans. Student loan defined contribution plan matching was permitted under the SECURE 2.0 Act of 2022.

Student loan repayment is frequently identified as one of the largest causes of financial stress and impediments to retirement savings among U.S. workers.

The notice also separately outlines QSLP rules for SIMPLE IRA plans.

The IRS is taking public comments on the notice, which applies to plan years beginning after Dec. 31, 2024. The comment period runs for 60 days after the notice is published in the Federal Register.

The ERISA Industry Committee, representing large employers in their capacity as benefit plan sponsors, supported the IRS’ action.

“ERIC’s member companies are committed to the financial wellbeing of their employees, including those with outstanding student loans,” said Andy Banducci, ERIC’s senior vice president for retirement and compensation policy, in a statement. “That is why we lobbied Congress to enact a tax law change allowing employers to make retirement plan matching contributions on account of workers’ qualified student loan payments. We applaud the IRS for issuing interim guidance implementing this change and look forward to providing technical comments to IRS in the coming weeks.”

The regulator also announced plans to issue proposed regulations providing further guidance on the QSLP benefit, stating that plan sponsors may rely on the notice until the proposed regulations are issued.

The guidance makes clear that plans cannot include provisions limiting QSLP matching to certain qualified education loans and that “all employees … eligible to receive matching contributions on account of elective deferrals must be eligible to receive matching contributions on account of ‘qualified student loan payments.’”

It also states that plans have to offer uniform treatment of elective deferral matches and QSLP matches.

“A plan with a QSLP match feature may not include provisions that exclude employees from receiving QSLP matches if those employees are eligible to receive elective deferral matches, and a plan with a QSLP match feature may not include provisions that exclude employees from receiving elective deferral matches if those employees are eligible to receive QSLP matches,”  the IRS wrote.

Overall, the notice addresses plan administration issues raised by Section 110 of SECURE 2.0, including:

• Only an employee’s qualified education loan payments that were made during a plan year are eligible to be counted for purposes of the employee’s QSLP match for that plan year;
• A qualified education loan payment is a QSLP only if the certification requirement is satisfied with respect to that payment. A plan may require a separate certification for each qualified education loan payment intended to qualify as a QSLP or permit an annual certification that applies for all qualified education loan payments intended to qualify as QSLPs for a year; and
• To certify a QSLP, the plan or its third-party service provider much receive the amount of the loan payment made, the date of the loan payment, that the payment was made by the employee, that the loan being repaid is a qualified education loan and was used to pay for qualified higher education expenses of the employee, the employee’s spouse or the employee’s dependent, and that the employee incurred the loan.

The notice also offers examples of administrative procedures and optional Actual Deferral Percentage testing.

***** ***** ***** ***** ***** 

Source: PLANADVISER

https://www.planadviser.com/interim-irs-guidance-published-student-loan-matching-payments/

15th August 2024 

Payscale Inc., a leading provider of compensation data, software, and services, has released the results of its ninth annual Salary Budget Survey, a key resource for HR and compensation professionals determining pay increase strategies for the upcoming year. The survey results reveal that U.S. employers are budgeting for 3.5% pay raises in 2025.  

“Given the stabilization of inflation and the easing of labor market conditions, we’re seeing a slight reduction in planned salary increases for 2025, though figures are still above the 3% pre-pandemic baseline that employees have come to expect,” says Ruth Thomas, chief of research and insights at Payscale. “When we zoom in on different industries and sectors, we observe that raises can vary by up to 1.4%, indicating that labor is in higher demand for some organizations.”  

Pay raise growth is on the decline—but slightly more people are set to receive one, the survey finds. Going into 2025, organizations are anticipating pay increases of 3.5% in the U.S. and 3.3% in Canada, a slight drop from 2024. So far, actual pay increases in the U.S. have averaged 3.6%, down from the 4% pay raises observed in 2023. Although rates are declining, 85% of employees will receive a base pay bump this year, compared to 83% last year.  

Employees in certain industries will experience rates exceeding 4%, while those in other lines fo work will barely surpass 3%. Government workers and those in the engineering and science fields can expect to see higher-than-average salary increases, averaging 4.5% and 4.2%, respectively. Conversely, retail and customer service employees and those that work in education—including teachers—will see raises of just 3.1%.  

While most salary increase budgets remain unchanged, organizations with higher and lower budgets both point to the economy as a main reason for the shift. Just two in 10 organizations anticipate a compensation budget that’s higher than last year’s, and even fewer are expecting a lower budget allocation. Most organizations (66%) expect budgets to stay the same. For those with higher budgets, increased competition for labor was the primary reason, followed by economic performance. For those with reduced salary budgets, outsized increases in years prior and concern about the economy were cited.  

“Although perceptions of the current economy are mixed, organizations in a growth phase and those facing headwinds are competing for the same talent,” says Lexi Clarke, chief people officer at Payscale. “Employers must have a compensation strategy built on data to guide their salary increase budgets, or they risk losing top talent this budgeting cycle.”  

***** ***** ***** ***** ***** 

Source: HRO Today

https://www.hrotoday.com/news/ticker/u-s-employers-forecast-3-5-pay-increases-in-2025/

From the employer side, the number of jobs offering “a little flexibility” more than tripled between June 2024 and the same time last year, Flexa’s data showed.

Published Aug. 12, 2024

By Laurel KalserContributor

Dive Brief:

• Employers may have found a compromise for staff resisting return-to-office mandates: Offering them a little flexibility over when they have to be at work, according to an analysis released Aug. 4 by U.K.-based Flexa, a global job platform focusing on flexible workplaces.
• The analysis found that in June, 14% of job seekers, up from 11% in April, expressed a preference for roles offering “core hours” — where employees are required to work during certain hours, such as 11 a.m. to 3 p.m., but may complete their work in their own time.
• From the employer side, the number of jobs offering “a little flexibility” more than tripled between June 2024 and the same time last year, Flexa’s data showed. “A little flexibility” means employers can start or finish their work a little early or a little late, but otherwise work regular hours, according to the platform. In June, nearly 8 in 10 job postings mentioned the benefit, a steep increase from 50% two months earlier, Flexa found.

Dive Insight:

Workers’ post-pandemic preference for job flexibility isn’t limited to where they work, according to Flexa data from more than 4,000 job posts and preferences expressed by 9,473 job seekers in the U.S. and Europe between April and June 2024.

Employees are also looking for flexibility over when they work, the data showed. “Demand for core hours is not a million miles away from current levels of supply, but is increasing by contrast,” Flexa said.

In June, 39% of workers said they didn’t mind whether they had flexible hours or not (as opposed to it being something they sought specifically). But that’s a rapid downturn from April, when 49% said they didn’t mind, and it’s the lowest amount since December 2021, the platform pointed out, meaning employees increasingly seek it out.

Fortunately, “flexible working hours are something that far more employers agree with them on, thanks to the trend towards asynchronous work and output-led management,” Flexa CEO and co-founder Molly Johnson-Jones stated in the report.

For now, employers seem reluctant to offer anything more than “a little flexibility,” according to the data. In June, the number of job vacancies that offered core hours plummeted to 8%, down from 15% in April.

According to a 2022 survey from digital payroll solutions firm Deluxe, some employees may even prefer flexible working hours to the flexibility of working from home. One in five employees at small-to-mid-size businesses said the No. 1 action their employer should take to improve their working environment is to offer flexible scheduling that lets them adjust their work hours.

Notably, if employer support for flexible scheduling lags behind employee demand, employer support for hybrid working arrangements remains strong. Nearly two-thirds of employers who responded to the Society for Human Resource Management’s 2024 annual benefits survey, released in June, offer a hybrid work model.

Even so, most employers have yet to adapt their practices to support the shift to hybrid arrangements, a March report by TechSmith Corp., Global Workplace Analytics and Carytid Workplace Consultancy pointed out.

Leaders and managers need hybrid-related skills, such as establishing team or meeting norms, the report explained, but 3 out of 4 workers said they haven’t received training on these skills.

Employees’ current focus is on flexible working hours, Flexa indicated. “Not since the pandemic have workers cared as much [about this],” Johnson-Jones said. That could be for several reasons, such as staff wanting a better work-life balance or seeking a flexible schedule to balance out having less influence over their working location, she explained.

“Ultimately, flexible working hours meet many different needs for many different workers. And having even just ‘a little flexibility’ around work start and finish times can make a big difference,” Johnson-Jones added.

***** ***** ***** ***** ***** 

Source: HR Dive

https://www.hrdive.com/news/job-seekers-increasingly-want-core-hours-flexibility/723571/

July 15, 2024

Almost half (47%) of U.S. organizations report their salary budgets for the 2024 cycle are lower than the previous year, as the overall median pay raise for 2024 fell to 4.1%, according to WTW.

ARLINGTON, VA, July 15, 2024 — Almost half (47%) of U.S. organizations report that their salary budgets for the 2024 cycle are lower than the previous year, as the overall median pay raise for 2024 fell to 4.1%, compared with 4.5% in 2023. That’s according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.

The report found employers are being more conservative with their salary budgets as they anticipate lower demand resulting in longer-term stability in their employee base following a period of high resignation and turnover. While around two-fifths of employers (38%) report having trouble attracting and retaining talent in 2024, this figure has dropped almost 20 percentage points from two years ago (57%).

“

As the workplace stabilizes and employers look more toward the future, companies are reviewing and updating their compensation philosophies to ensure they align with business strategy,”

Lesli Jennings | North America leader, Work, Rewards and Careers, WTW

Overall salary budget increases are expected to rise by 3.9% in 2025, which, despite declining since 2023, remain fairly high.

In addition, total annual payroll expenses (which include salaries, bonuses, variable pay and benefit costs) continue to rise substantially in the U.S., as a majority (73%) of companies report that their total payroll expense was higher than last year.

Inflation can impact salary budgets in both directions. Those organizations that lowered salary budgets cited concerns related to cost management, weaker financial results and inflationary pressures as the leading causes, whereas those that raised salary budgets this year cited inflationary pressures and a tight labor market.

In light of these issues, companies are looking to make longer-term changes to their compensation programs. Over half (51%) of companies that have made changes to compensation programs or workplace flexibility have undertaken a compensation review for specific groups; almost half (49%) are hiring people at higher salaries, and 45% have undertaken a full compensation review of all employees.

Additionally, organizations are taking actions to address current market conditions and employee needs, particularly providing more workplace flexibility (52%) and improving the employee experience (52%).

“As the workplace stabilizes and employers look more toward the future, companies are reviewing and updating their compensation philosophies to ensure they align with business strategy,” said Lesli Jennings, North America leader, Work, Rewards and Careers, WTW.

“In light of cost management concerns, employers are taking more of a holistic approach to their reward programs, factoring in bonuses, long-term incentives, and health and wellness benefits; however, a more targeted review of specific employee groups could allow for greater support for those with in-demand skills or those in lower salary ranges. Pay equity is top of mind for employers, and giving a big-picture view of what employees are offered ensures the salary increase process is clear and emphasizes the connection to business performance,” added Jennings.

About the survey

The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from April to June of 2024. Approximately 32,000 responses were received from companies across 168 countries worldwide. In the U.S., 1,888 organizations responded.

***** ***** ***** ***** ***** 

Source: WTW

https://www.wtwco.com/en-us/news/2024/07/employers-more-conservative-with-salary-budgets-as-employee-base-stabilizes

NEW YORK, June 27, 2024 – Mercer, a business of Marsh McLennan (NYSE: MMC) and a global leader in redefining the world of work, reshaping retirement and investment outcomes and unlocking real health and well-being, today released the results of its Survey on Health and Benefit Strategies for 2025. The survey reveals that despite higher healthcare cost trends, the majority of employers will not cut health benefits, and many will make enhancements to their programs, although they may be doing so more selectively than in past years. 

“Employers are juggling faster cost growth with the need to offer attractive benefits and keep healthcare affordable for all employees,” said Ed Lehman, Mercer’s US Health and Benefits Leader. “That’s why it’s important they assess their investments in employee health more carefully than ever to create real, long-term value for employees.”

“To strike a balance between cost containment and ensuring access to high-quality care for their employees, employers are leveraging strategies like high-performance networks and enhanced clinical case management,” said Mr. Lehman. According to the survey, in 2025, more than a third of large employers (36% of those with 500 or more employees) will offer a high-performance, narrow network or other alternative medical plan designed to steer employees to quality, cost-efficient care. 

Focus on inclusive reproductive benefits 

The survey highlights the continued growth in benefits and resources to support women’s reproductive health needs, from pre-conception planning, which will be offered by 35% of large employers in 2025, to benefits designed to help women returning to work after becoming a parent (31%).

There has been significant growth in fertility treatment coverage in the past few years. As Mercer previously reported, the prevalence of coverage for in vitro fertilization (IVF) doubled between 2019 and 2023, when it reached 45% among large employers. The majority of employers providing fertility benefits say they are designed to be inclusive (61%), extending coverage beyond women who meet the clinical definition of infertility.

Ensuring access to specialized care during menopause is a new but fast-growing benefit. Next year, 18% of employers plan to offer specific resources for women going through menopause, up from just 4% in 2023.

This year, the survey explored coverage for men’s reproductive health for the first time and found that over a third of employers (35%) now offer coverage for men’s fertility testing and 20% cover sperm freezing, similar to the percentage that cover egg freezing (19%). 

Coverage for weight-loss medication likely to expand

The surge in utilization of glucagon-like peptide 1 (GLP-1) drugs for diabetes and obesity treatment had a notable impact on benefit budgets last year.

Currently, only about half of the large employers surveyed (52%) cover weight-loss medications. But as more GLP-1 drugs are approved to treat obesity, employers are facing growing pressure to cover them. Plans may experience substantial net new costs given that the drugs cost about $1,000 per month per patient (not counting manufacturers’ rebates, which vary) and a large number of patients may benefit from them.

The survey asked employers about their plans concerning coverage for weight-loss medications. Despite the cost, very few large employers have either dropped coverage or plan to drop it (3%), and only 10% say they are considering it. On the other hand, 27% of employers are considering adding coverage. 

Moving up the benefits agenda: climate-related health impacts 

Nearly two-thirds of large employer respondents said their workers have been affected by some type of climate event or natural disaster in the past two years — with over a third stating their business operations have been affected. While events like floods and wildfires have an obvious impact on employee health and safety, climate-related conditions such as extreme heat and poor air quality can lead to heat stress, heat stroke, chronic disease complications and mental health issues. 

The good news is that around half of respondents (53%) have at least some policies or programs in place in preparation for climate events or have plans to implement them in 2025. These include policies and resources to help employees in the aftermath of a disaster and guidelines to ensure worker safety and health during extreme weather conditions.

“Employers are starting to think about the impact climate events can have on their people and their businesses,” said Tracy Watts, Mercer’s National Leader for US Health Policy. “Employers could do more to plan for climate events and safeguard employee health. Conducting a vulnerability assessment to understand which employees are most at risk is a good place to start.”

Click here to learn more and download the report.

About Health & Benefit Strategies for 2025 

This study includes 697 organizations (537 organizations with 500 or more employees and 160 organizations with fewer than 500 employees). The study was fielded between March 21 and April 12, 2024. 

***** ***** ***** ***** ***** 

Source: Mercer

https://www.mercer.com/en-us/about/newsroom/the-majority-of-us-employers-plan-to-maintain-their-current-benefits-in-2025/

July 12, 2024 | Kathryn Mayer

In light of heightened employee expectations and new laws requiring salary disclosures, calls for pay equity have never been louder. A new report indicates that while a majority of employers are working toward pay equity, there is still work to be done.

Nearly three-quarters of employers (70%) said they have analyzed their compensation strategies and shared existing gender pay gap statistics with employees and/or external stakeholders, according to new data from compensation firm beqom.

That has led to a number of problems being uncovered, according to beqom’s survey of 875 salary and compensation decision-makers in the U.S. and the U.K., including wage discrimination (cited by 64% of respondents), promotion disparities (57%), below-market salary ranges (54%), pay compression (53%), and gender pay gaps (48%).

In response to some of the pay problems they’ve uncovered, most companies have reported taking steps to close existing wage gaps and foster transparency, the beqom report found.

Those strategies include listing salary ranges within new job descriptions (81%), increasing salaries due to inflation and economic standard-of-living costs (68%), implementing a process for continuous feedback (67%), increasing pay to correct existing pay gaps and salary inconsistencies (65%), providing clear structure for bonuses and performance review processes (65%), and increasing salaries based on performance (65%).

The report finds that “employers are making meaningful progress and taking action,” said Tanya Jansen, co-founder and chief marketing officer of beqom, but it also uncovers a big gap: About 1 in 3 employers (34%) still don’t have a pay equity strategy in place.

Some Employers Struggling with Developing Strategy

Perhaps even more surprising, more than half of the compensation decision-makers surveyed by beqom said they doubt their company complies with global standards, and 45% said their approach to pay equity is hurting their ability to attract talent.

Compliance complexities are another matter. Just 2 in 5 employers (41%) said they are aware of global pay equity standards.

The data is evidence that employers are grappling with addressing wage discrepancies and promoting fair compensation, even when they know they should be doing more, Jansen said. “They understand the urgency in confronting wage gaps but find themselves navigating a complex web of regulatory requirements and stakeholder demands,” she said.

Numerous states now have laws requiring some kind of pay transparency, such as including pay ranges in job postings.

Part of the reason why some employers don’t have a pay equity strategy is because of those complexities and variations in standards. Meanwhile, smaller firms specifically may face difficulties because they often lack the necessary resources and expertise to address the topic, said Jeremy Feinstein, managing director at Empsight, a New York City-based human resource consulting firm specializing in compensation.

Jesse Meschuk, a Los Angeles-based human capital advisor and HR expert specializing in compensation, said figuring out a pay equity strategy can be “tricky.”

“What to disclose, how to get managers and employees ready—these are all actions that take careful planning and communication,” he said.

But not having a strategy in place proves to be problematic, experts said.

“Companies without a pay equity strategy are exposed to significant risks, including legal repercussions, challenges in attracting and retaining talent, and a weakened employer value proposition,” Feinstein said.

“The one-third who don’t have a strategy in place need to do so, and do so soon,” Meschuk said. “Regulations are increasing across the U.S.”

Wage Discrimination, Gender Pay Gap

The findings from beqom follow a report from Payscale earlier this year, which found that the U.S. gender pay gap for 2024 remains the same as last year, with women earning just 83 cents for every dollar earned by men. The gap is even worse for women who work remotely (79 cents) compared to women who work in person (89 cents). It’s also worse for working mothers, with the report finding that working mothers make 75 cents for every dollar a working father earns, while women and men without children have a pay gap of 88 cents.

Since 2019, the uncontrolled gender pay gap has narrowed by 5 cents for Black women and Native American and Alaska Native women, as well as by 4 cents for Hispanic women and Native Hawaiian and other Pacific Islander women, Payscale found.

While that movement is helpful, it’s not especially encouraging overall, said Ruth Thomas, pay equity strategist at Payscale, earlier this year.

“The only small sign of progress is pay gaps for women of color are closing more rapidly than pay gaps overall, but this is partially because these pay gaps are wider to begin with,” she said. The data implies the need for “legislators and employers to take action to break this cycle of stalled pay gaps and speed up the historically slow progress toward gender equality.”

Getting a Pay Equity Strategy in Place

To establish a robust pay equity strategy, Feinstein recommended that employers first examine their job architecture framework. This involves ensuring that employees are correctly classified within the organization through clearly defined job families, sub-families, and individual roles within them, combined with a comprehensive grading/leveling strategy, he said.

Meschuk said organizations should “gather all the relevant information you will need— job levels, salary ranges, individual employee profiles/experience, performance evaluation histories, promotion data, and actual compensation information.

“If some of this does not yet exist, it may make sense to do some initial work to best position yourself for a robust analysis—put in place a rudimentary job leveling/evaluation system so you can compare like jobs across departments and ensure you have a sufficient number of data points.” 

***** ***** ***** ***** ***** 

Source: Society for Human Resource Management (SHRM)

https://www.shrm.org/mena/topics-tools/news/benefits-compensation/1-in-3-employers-don-t-have-a-pay-equity-strategy-

ByDawn Kawamoto

May 20, 2024

Nearly 72% of Americans live paycheck to paycheck, with less than $2,000 in savings. And Amazon employees are among them. 

About five years ago, Amazon started surveying workers about their financial health and the benefits they would find most useful—which painted a picture of financial stress among employees, says Justin Roberts, senior manager of financial benefits at Amazon.

To address this, Amazon created a global financial health team in 2022, says Roberts, who recently spoke on a panel, The Role of Financial Care for Employee Health, Wellbeing and a Thriving Workforce, at the Elevate Change, Ignite People (EPIC) conference in Las Vegas.

The financial health team is comprised of 12 full-time employees and contractors, as well as dozens of specialists on partner teams who work on various aspects of Amazon’s financial health benefits, from payroll to technology. This team is part of Amazon’s global financial and wellbeing benefits organization, which is part of the HR department. 

Amazon’s HR leaders are not alone in wanting to help employees address their financial woes, which can lead to stress-induced health problems and deteriorated mental health, and, for employers, a loss in productivity and increased attrition. It’s a focus being accelerated by ongoing economic uncertainty. For the first time, last year, employers ranked the high cost of living as a top financial wellness concern over retirement preparedness, according to an Employee Benefit Research Institute report.

How Amazon created its financial health program

Prior to the start of the pandemic, Amazon began talking to employees and conducting employee surveys regarding their financial wellness concerns. Roberts said understanding such needs is key to any successful financial wellness strategy.   

“It all starts with talking to your employee base and asking them what they want. What do they need from a financial perspective?” Roberts said. “A lot of times, they don’t know what they want until they are provided with some options. Once they see the options, they know clearly what they want to extract from them.”

After gathering data for more than a year, Amazon “saw the financial stress metrics that we have are fairly high,” Roberts said, which prompted the company to create a financial health team in 2022.

The team realized it needed to first sharply focus on helping employees manage short-term financial wellness, like financial emergencies—more so than prepare for long-term financial goals like retirement planning, Roberts said. 

“Whenever somebody is hurt on the battlefield, the first step is to stop the bleeding,” says Roberts, a former Marine. “So, whenever we started to look for financial wellness solutions for our frontline employees, it was to stop the bleeding. What can we do for them in cases of emergencies? What do we need to do to take care of that first? Then we can later build on that.”

When Amazon’s financial health team learns of a U.S. employee facing a financial emergency, it directs that employee to its financial care solutions partner Brightside. That partner works with employees to find emergency housing, arranges food and grocery delivery, and connects them to appropriate community and government support services.

After tackling these immediate needs, Brightside and Amazon’s financial health team seek to build a strong financial foundation by working with affected employees to create a savings plan, rebuild their credit rating and eventually tack on retirement savings, Roberts said. 

Roberts offered several tips for selecting a financial wellness partner. Seek a partner that receives all of its funding from its clients rather than a combination of clients and vendors whose products may be used in providing service to the organization. 

“You don’t want a vendor to get paid more to pitch an annuity versus a different savings vehicle. You could then find there’s a propensity to select a resource that may not be in the best interest of employees,” Roberts said. 

Amazon also wanted a partner that would not limit the amount of time employees could spend with a financial wellness representative. Brightside was also asked to ensure employees meet with the same financial representative whenever they need help to build on their existing relationship.

Amazon’s financial wellness ROI

Amazon measures its financial wellness return on investment through two lenses—impact on its employees and its business.

Since launching its financial health team and partnership with Brightside, Amazon has seen improvements in its employees’ savings rates, the number of dollars going back to employees—as they budget better and even set aside money for retirement funds—and the value they receive from the program.

“We’re looking at a 3x value,” Roberts said. “For every dollar we put into the program, the employee gets about $3 worth of value.”

Roberts said employees also rate Amazon’s financial wellness program with a 90 NPS score, adding, “It’s insanely high.”

Although Amazon’s overall employee base rates its financial wellness program high, financial woes persist among the online retailing giant’s warehouse workers, highlighting the scope of the challenge.

For example, 53% of 1,484 Amazon warehouse workers across the U.S. say they have experienced one or more forms of food insecurity in the past three months, and 48% of these workers face housing insecurity, according to a report released Wednesday by the Center for Urban Economic Development at the University of Illinois Chicago. 

Additionally, 56% of warehouse workers are not able to pay all their bills, and 33% use one or more publicly funded assistance programs.

As Amazon seeks to improve further the lives of its employees, including its warehouse workers, the company is leaning into the benefits its financial health program is yielding. Roberts said the company believes it’s seeing greater productivity from workers, less attrition and safer workplaces—since workers are less distracted by financial problems. The program has been so successful that Amazon is expanding its geographic footprint for the program from one region in the U.S. to nationwide.  

Common mistakes to avoid when creating a financial wellness program

Despite the potential of a financial health program, there are some common mistakes HR can make in crafting such an initiative, Roberts said.

Moving mountains quickly

“The biggest mistake is trying to do too much, too fast,” Roberts says. However, he noted that most decisions regarding financial health programs are two-way doors, where HR leaders need to be able to pivot and change plans.

Failing to know your employee base

HR leaders can fall into a herd mentality that can hurt their financial wellness program, Roberts observed.

“I often see some of my peers out there who will see what someone else is doing and say, ‘That’s great. I want to do that.’ They may start an emergency savings account program without understanding what their employees need. If it’s a hospital, maybe your nurses need student loan benefits before getting an emergency savings account,” he said.

Missing the mark on what to measure for program success

HR needs to know exactly what its financial wellness program is built to do and the desired outcomes and metrics to hit. Without measurable goals, merely having employees engaged in the financial wellness program does not equate to success, Roberts says.

“We know we want to provide X number of value per family and we hold ourselves accountable to that,” Roberts said. “If you have a performance-driven leader, you’ll get to the place you want to go.”

***** ***** ***** ***** ***** 

Source: Human Resource Executive 

https://hrexecutive.com/how-amazons-employee-financial-wellness-program-is-making-a-difference/

Bank increases paid leave to up to 24 weeks for birth parents

Published Wed, Jun 5, 2024 · 12:12 AM

CITIGROUP is increasing the time-off allowance for new parents in the US and introducing leave for staff to care for ailing family members, bringing it more in line with Wall Street rivals as they fight to attract and retain talent.

Under the expanded policy, all new parents in the US and Puerto Rico will receive 16 weeks of paid leave, including those who adopted or had children through surrogacy, according to an internal memo seen by Bloomberg News. Birth parents will receive an additional paid recovery time of as much as eight weeks, reaching a potential total of 24 weeks.

In addition, Citigroup will now allow colleagues two weeks of paid leave annually to care for an immediate family member who’s seriously ill and incapable of self-care. Previously, it offered only unpaid leave. Some rivals already offer as much as four weeks of paid leave for that purpose.

While the new family-leave allowances help make the firm even more competitive with US peers, they’re less than policies in other parts of the world, bolstered by stronger cultural demands for parental leave as well as statutory mandates. In the UK, Citigroup employees are entitled to 26 weeks’ leave at base pay and more time at a lower-paid or unpaid status.

In India, where women comprise less than a quarter of the work force, banks have expanded their policies for female employees in a race to hire more. HSBC Holdings pays for bankers’ nannies in the country, while Citigroup allows new mothers to work from home for a year after their maternity leave ends. 

***** ***** ***** ***** ***** 

Source: The Business Times

https://www.businesstimes.com.sg/companies-markets/banking-finance/citi-boosts-us-parental-leave-compete-wall-street-rivals

March 20, 2024 09:00 ET | Source: Payscale

• Pay transparency is officially a best practice as the majority of organizations (60%) now publish salary ranges in job ads, up 15% over last year.
• More organizations are ditching degree requirements and embracing skills-based hiring strategies.
• Compensation is considered the biggest challenge facing organizations in 2024, ahead of recruiting, retention, and engagement.
  

SEATTLE, March 20, 2024 (GLOBE NEWSWIRE) -- Today, Payscale Inc., the leading provider of compensation data, software and services, released its flagship report, the 2024 Compensation Best Practices Report (CBPR). Now in its 15th year, data and insights from the company’s annual survey of compensation professionals and HR leaders are distilled into the largest report of its kind, revealing the latest workplace and compensation trends in the wake of high inflation, pay transparency legislation, and slowed economic growth.

“This year’s report tells us that while the economy may be in flux, employee expectations have not swayed. Transparent pay practices and meaningful raises are now table stakes to attract and retain top talent, but many organizations are falling behind as legislation is only accelerating,” said Payscale’s Chief People Officer Lexi Clarke. “Half of employers don’t yet have a compensation strategy or pay communications in place, but employee engagement hinges on workers understanding the ‘what’ and ‘why’ behind their pay.”

Key takeaways from CBPR include:

Pay Increases and the Job Market: Competitive raises that exceed inflation are a priority, even in a sluggish economy — but fewer organizations are planning to hand them out.

• Organizations predict an average base pay increase of 4.5% in 2024, compared to the average of 4.8% actually given last year. This increases to as high as 6% for some industries.
• This year, only 79% of organizations plan to give pay increases, which is a drop from 86% in 2023, and the lowest it has been in years. However, 14% are unsure, which means this could end up looking similar to last year.
• Reported voluntary turnover is 21% in 2023, down 4% from 2022 (25%) and much lower than 2021 (36%) — evidence that it’s an employer’s market, at least temporarily.
  

Pay Transparency and Fair Pay: Posting pay ranges in job ads is now the norm, prompting underpaid employees to resign — yet some employers are still gambling with unaddressed pay inequities.

• The majority of organizations (60%) are publishing pay ranges in job postings in 2024, compared to 45% in 2023. However, there has also been a slight uptick in organizations resisting pay transparency (from 11% to 13%).
• In response to pay transparency, 27% of organizations say employees are asking more questions about their pay, 14% have had employees quit because they saw job ads with higher pay elsewhere, and 11% have had employees see an internal job posting for a similar role and realize they were being paid less. More encouragingly, 14% say that employees have expressed appreciation for transparent pay practices.
• Pay equity analysis is a planned or current initiative for 62% of organizations — but over a quarter (27%) admit they do not address severely underpaid employees unless the employee or their manager asks.
  

Compensation Strategy and Pay Communications: While progress has been made, almost half of organizations need to get serious about strategic compensation management.

• HR leaders rank compensation as their biggest challenge this year (50%), over recruiting (44%), retention (42%), and engagement (37%).
• While only 53% of organizations have a formal compensation strategy in place, 21% are planning to build a compensation strategy for the first time in 2024.
• Only half of organizations (51%) train managers on how to have pay conversations with employees, which is still a first-time majority in 2024.
  

AI Adoption: Although forms of artificial intelligence (AI) have been used reliably for years in compensation, organizations are approaching the technology with caution.

• Almost half of HR leaders and compensation professionals (49%) are optimistic about AI; most (63%) believe that AI will reduce unfulfilling work. Meanwhile, 17% are pessimistic; their top concern (56%) is that AI will extend bias rather than mitigate it.
• The practical application of using AI for compensation decisions is viewed more cautiously by organizations, with only 7% of respondents being totally on board and 50% undecided.
• Currently, 21% of organizations are using or developing AI for managing or generating job descriptions, 18% to parse resumes and identify candidates, and 17% to create or support learning and development or standard HR documents.
  

Remote Work and Skills-based Pay: Modern approaches to work, like valuing skills over degrees or productivity over office mandates, are paying off for forward-thinking companies.

• One in three organizations (34%) have removed degree requirements for salaried positions. Overall, only a minority (22%) still require a college degree for all salaried positions in 2024.
• The majority of organizations (58%) compensate for competitive skills.
• While only 11% of employers offer a fully remote work environment (unchanged from last year), the voluntary turnover rate for remote companies is 13%, compared to 30% for traditional in-person work, 23% for work environments split by job type, and 16% for hybrid.
  

Labor Unions and the Minimum Wage: Worker rights will continue to be a major focus in 2024, as employees continue to organize and pay floors increase in almost half of states.

• HR leaders view unions significantly more positively (62%) compared to executives (38%).
• Almost a quarter (22%) of employers bargain with a union, with 18% having done so for many years and 4% just in the last few years. While not a large number, the 4% includes organizations of all sizes and industries.
• Minimum wage increases will impact compensation strategy for 27% of organizations.
• Almost three-quarters (73%) of employers are in favor of raising the federal minimum wage.

“Fair pay is the bedrock of compensation strategy, yet alarmingly, more than a quarter of employers are not proactive about correcting pay disparities,” said Ruth Thomas, pay equity strategist at Payscale. “We’re seeing forward-thinking companies, on the other hand, make adjustments for external and internal pay equity, pay compression, and competitive skills — while diversifying their workforce by removing barriers to entry like degree requirements.”

Payscale’s 2024 Compensation Best Practices Report analyzes survey data from 5,735 respondents gathered between October 2023 and December 2023. Nearly 100 pages long, the report includes cuts of the data across organization size, performance, industry, and location. The full report and its methodology can be accessed in its entirety at Payscale.com/research-and-insights/CBPR.

About Payscale
As the industry leader in compensation management, Payscale is on a mission to help job seekers, employees, and businesses get pay right and to make sustainable fair pay a reality. Empowering more than 50% of the Fortune 500 in 198 countries, Payscale provides a combination of diverse and dynamic data sources, experienced compensation services, and scalable software to enable organizations such as Angel City Football Club, Target, Gainsight, and eBay to make fair and appropriate pay decisions.

***** ***** ***** ***** ***** 

Source: GlobeNewswire

https://www.globenewswire.com/news-release/2024/03/20/2849394/0/en/Worker-Expectations-Clash-with-Economic-Realities-Payscale-s-2024-Compensation-Best-Practices-Report-Reveals.html

Survey: Pay structures are changing to suit equity, transparency needs

Organizations have become more transparent about pay, according to Payscale, but generally only disclose data to individual employees and only when required to do so.

Published June 6, 2024

Traditional pay grades remained the most common form of pay structure for organizations entering 2024, but many were considering market-based pay ranges — segmented either by individual jobs or by groups of comparable jobs — to meet equity and transparency goals, according to a recent Payscale report.

The vendor’s late 2023 survey of more than 5,700 compensation professionals, most of them from the U.S. and Canada, found that more than half said their organizations targeted pay ranges either presently or in the future. Another pay structure model, the step structure, was cited by 31% of respondents as a future target for their organizations and by 22% as both a current and future target.

Most employers’ pay strategies target middle of market or are job-specific

“Which of the following best describes your organization’s market strategy?”

A plurality of respondents said their organizations priced pay by targeting the middle of the market, but Payscale said it found that top-performing organizations were more likely than their lower-performing counterparts to pay above-market. Paying above-market rates was also more common among smaller organizations with fewer than 100 employees.

Employers are making those changes against a backdrop of shifting compliance demands. Jurisdictions in at least 13 U.S. states and Washington, D.C., now have laws requiring some form of pay transparency, such as the inclusion of pay ranges in job postings. Minnesota is the most recent state to join that list with a law set to take effect in 2025.

The trend toward disclosure has been observed even where such laws are not in place, a recently published National Women’s Law Center analysis of Glassdoor data between 2022 and 2023 found.

Generally, most respondents to Payscale’s survey said they were posting pay ranges either to comply with applicable laws or had done so regardless of legal requirements. In 2023, only 15% said they were not posting or advertising jobs in locations that mandated pay transparency, and 11% said they had refrained from doing so while they worked on their pay practices. Both percentages declined when respondents were asked about their 2024 plans.

While transparency has grown thanks in part to legislation, the manner in which organizations approached the subject varied, Payscale found. For example, nearly 70% of organizations said that they shared individual pay with employees only, and only when required to do so. Only 6% said individual pay was shared within departments, and even fewer shared this information organization-wide or publicly.

“While the prevalent method centers on sharing pay ranges only with affected employees, as pay transparency becomes more ubiquitous, it is important to think about the impact publishing ranges can have on employee retention — both positive and negative,” Payscale said. “Even more critical is the importance of empowering managers to have proactive conversations with employees about pay and the organization’s approach to it through pay communications.”

Sometimes the newfound availability of pay information can increase employee conversations about the subject — leading to sometimes awkward interactions between co-workers or between managers and their reports. But over time, familiarity with pay conversations will help normalize the topic and support discussions about pay and career progression, Payscale said.

When setting pay, 63% of respondents to Payscale said they use between two to four sources, with over one-third of organizations with more than 5,000 employees stating they used more than five sources.

Salary survey data from traditional publishers, HR-reported aggregate market data in compensation software and closed-network HR-reported data ranked highest on the list of data sources that respondents trusted most when setting pay policies. “Free or open online data” and salary data from job board postings were among the least trusted sources, according to Payscale, although they remain commonly used.

***** ***** ***** ***** ***** 

Source: HR Dive

https://www.hrdive.com/news/pay-structures-change-to-suit-equity-transparency-needs/718228/