Hot Topics in Total Rewards

UPDATED THU, MAR 4 20219:25 AM EST |  Amelia Lucas

KEY POINTS

• Chipotle is tying executive compensation to annual targets aimed at improving the company’s internal diversity and sustainability.
• Investors have been pushing publicly traded companies to make more commitments to improve their environmental, social and corporate governance.
• Chipotle plans to publish its carbon emissions footprint by the end of the year

Chipotle Mexican Grill said Thursday that executive compensation will now be linked to hitting targets tied to the company’s environmental and diversity goals.

The burrito chain is following in the footsteps of Starbucks and McDonald’s, both of which recently announced that performance for racial and gender diversity goals will impact executive compensation plans. Individual investors and large asset managers like BlackRock are increasingly picking stocks with strong environmental, social and corporate governance in mind, pushing companies to make changes to become a more attractive investment.

“I think the increased focus on performance around ESG and investor feedback was definitely behind our decision to go public with this,” said Laurie Schalow, who oversees sustainability and ESG reporting for Chipotle in her role as corporate affairs chief and food safety officer.

Starting this year, 10% of Chipotle executives’ annual incentives will be tied to their progress toward achieving company goals.

“It’s very important for us to be transparent and to be held accountable. We can say a lot of words, but we want to make sure that we have the actions to back it up,” Schalow said.

Those targets include increasing the pounds of organic, local or regeneratively grown or raised food from the previous year. Last year, Chipotle hit 31 million pounds of local produce under this umbrella, and it has set a goal of 37 million pounds by the end of 2021.

The company plans to publish its carbon footprint, including all indirect emissions along its value chain, by the end of the year, faster than its prior expected publication date of 2025. Schalow said the company will announce new sustainability goals stemming from those learnings when the report is released.

Chipotle is also seeking to maintain racial and gender pay equity and promote more women and people of color above the restaurant level. It has created a training academy with online courses that teach a wide range of skills, from conflict resolution to setting goals, with the aim of helping employees of all backgrounds climb the corporate ladder. The company employed nearly 88,000 people, as of Dec. 31.

Shares of Chipotle have risen 91% in the last 12 months, giving it a market value of $39.6 billion.

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Source: CNBC

https://www.cnbc.com/2021/03/04/chipotle-will-link-executive-compensation-to-environmental-and-diversity-goals.html

Being at the forefront of Meeting room hire means that we meet real people from real businesses all the time. And we know when trying to find a new job, one of the biggest frustrations is job adverts missing one of the most important pieces of information: how much you'll get paid. According to some surveys, nearly 7 in every 10 job seekers consider the salary the most important factor when choosing a new job, and it's been found that job ads without a salary get clicked up to 35% less. And yet you still won't always be able to find it when looking at job adverts.

In fact, when Meetingo analyzed US jobs being advertised on job site Indeed.com, less than 3 out of every 10 jobs (29% of jobs advertised in US cities) were advertised with a salary. Of the cities we looked at, adverts were the least transparent in New York, where only 12% of job listings had a salary. Los Angeles (15%) and Boston (17%) didn't fare much better.

At the other end of the scale, the most salary transparent cities were Denver and Colorado Springs, where 68% and 72% of jobs respectively had a completed salary field. This is unsurprising, as both are in the state of Colorado, which has recently passed laws to make the inclusion of salary in job adverts mandatory.

The type of job you're looking for has a big impact on whether a salary will be advertised - the majority of ads in sectors like Personal Service (76%), Transport (67%) and Travel, Attractions & Events (61%) make it clear what you're likely to be paid. At the other end of the scale, less than a fifth of jobs in Technology (16%), Architecture & Engineering (18%), and Healthcare (20%) listed a salary. Only just behind were Marketing, Advertising & PR jobs (23%) and Science & Research jobs (26%).

Of the salaries that were listed, by far the highest were found in tech, where jobs were advertised as paying over $39,000 on average, followed by Architecture and Engineering ($84,111). The lowest-paid sector was Cleaning & Ground Maintenance followed by Food & Beverage (both paying approximately $32,000 on average)

Comparing the average salary and transparency rates showed that lower-paid sectors were more likely to list a salary than higher-paid sectors, though it's hard to say for sure that this is truly the case reality as many job ads in some sectors failed to include salary information.

Looking at average salary by city, San Francisco and New York came top (unsurprisingly given the number of tech firms in each) with an average salary listing of over $67,000, followed by Los Angeles ($56,000) and Seattle ($55,000)

The cities with the lowest salaries in their job adverts were El Paso, Texas ($34,000 - about $13,000 less than the US average), then Louisville, Kentucky ($38,000) and Virginia Beach, Virginia ($39,000).

These results show that the US has some way to go in the area of salary transparency - similar research we conducted in the UK found that 71% of jobs ads - more than double the number in the US - featured a salary. But this isn't true across the country, as we can see from the example set by Colorado setting it into law that ads have to include details of pay (one of the few such laws in the world - a similar mandate came into effect in the country of Latvia in 2019). Though the value of salary disclosure is still the subject of much debate for employers, for would-be employees the making pay transparency more common than it currently is in the US could only be a good thing.

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Source: Meetingo

https://www.meetingo.com/en-us/salaries-in-job-ads

Note: On January 24, 2022, the DOL removed Fact Sheet #84 from its website. For more information please see our follow-up Alert. 

The U.S. Department of Labor (DOL) has issued Fact Sheet #84 (available here) addressing the compensability of time spent undergoing COVID-19 health screenings, testing, and vaccinations under the Fair Labor Standards Act (FLSA). The Fact Sheet addresses how the OSHA Vaccination and Testing Emergency Temporary Standard (ETS) factors into the DOL’s analysis of whether such time is compensable under the FLSA. The U.S. Supreme Court has stayed the ETS from going into effect, determining that OSHA likely lacked the authority to impose the ETS.

The DOL stated that employees must be paid for time spent going to, waiting for, and receiving medical attention required by an employer or on the employer’s premises during normal working hours. Specifically, if an employer requires an employee to get a COVID-19 vaccine dose, undergo a COVID-19 test, or engage in a COVID-19 related health screening or temperature check during the employee’s normal working hours, the time the employee spends doing so is compensable. This is the case regardless of where the activity occurs.

The DOL also addressed activities that occur outside of normal working hours. The DOL stated that employers are required to pay employees for time outside of normal working hours if the task employees are required to perform is necessary for the work they are paid to do. Time spent engaged in employer-required activities that are necessary for employees to safely and effectively perform their jobs is “integral and indispensable” to their work and therefore must be paid. As an example, if an employer has implemented a mandatory COVID-19 vaccination policy and requires employees to receive COVID-19 vaccinations after their shifts or on weekends, then the employer must pay employees for the time spent doing so because the vaccine is necessary for them to safely and effectively perform their jobs.

Where an employer has a mandatory COVID-19 vaccination policy, but an employee is unable to receive a vaccination (e.g., due to a disability or sincerely held religious belief) and is required instead to undergo testing, any time spent outside of normal working hours undergoing regular employer-required COVID-19 testing is “integral and indispensable” to the employee’s work and therefore compensable. The employee must be paid for the time spent going to, waiting for, and undergoing the testing.

Where an employee is able to receive the COVID-19 vaccine as an alternative to regular COVID-19 testing but has voluntarily declined to be vaccinated, the employer is not required to pay the employee for time spent undergoing regular COVID-19 testing. Since the employee chose not to get vaccinated, the time spent undergoing testing outside of normal working hours is not “integral and indispensable” to the employee’s job.

Where neither vaccination nor testing is required by an employer, an employee’s choice to engage in such activity outside of normal working hours is generally not compensable.

This Fact Sheet is the most recent guidance by the DOL regarding the compensability of time spent undergoing COVID-19 health screenings, testing, and vaccinations under the FLSA. It should not be considered in the same light as official statements of position contained in regulations. Employers should consult with legal counsel to ensure their COVID-19 related policies and practices comply with the FLSA’s requirements.

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Source:  JD Supra

https://www.jdsupra.com/legalnews/dol-issues-guidance-on-compensability-5545479/

Published Jan. 19, 2022 | by: Ryan Golden

Dive Brief:

• Amid ongoing churn in the U.S. labor market as well as inflation in the broader economy, employers continue to build salary increases into their compensation budgets, according to a recent poll of compensation professionals by WorldatWork.
• The HR management association's more than 200 respondents reported an average salary budget increase of 4% at their organizations, or a median 5%, in 2021. These figures sit below the 5% average, or 6% median, increase that respondents said they would need to retain and attract talent, WorldatWork said. But they exceed the average of 3.3% and median of 3% planned budget increases for 2022 that the organization recorded in a separate survey of CEOs, CFOs and HR professionals.
• Despite more than half of respondents to the compensation professional poll stating that they had increased their organizations' salary budgets in the past six months, 71% said attracting and retaining talent was "somewhat difficult" and 23% said it was "very difficult."

Dive Insight:

All signs point to higher compensation budgets in 2022 for the vast majority of employers. XpertHR's November survey of employers bore similar results to WorldatWork's research; the company found employers planned salary budget increases of 3% this year, with retention, recruitment and economic factors commonly cited to explain the trend.

Earlier 2021 research by advisory firm Willis Towers Watson revealed employers particularly had sought pay increases for those at the executive level, with comparatively smaller increases for management, professional employees and support staff. Across sectors Willis Towers Watson found employees in technology and pharmaceuticals were in line for the largest 2022 pay increases, while those in oil and gas or leisure and hospitality were set for the lowest increases.

Overall, the news may in part represent the reversal of currents impacting U.S. workplaces during the first year of the pandemic, when 45% of employers in a November 2020 Gallagher survey reported that COVID-19 had disrupted their salary increase plans. However — as WorldatWork's researchers noted — 2022's planned increases might not keep pace with inflation, according to a report published in December by HR consulting firm Mercer.

Then there is the worker sentiment piece of the puzzle. Even at the height of the Great Resignation last autumn, nearly half of U.S. workers surveyed by Robert Half between March and April of 2021 said they believed they were earning less than they deserved. Though younger workers and women were the respondent demographics most likely to say they felt underpaid, according to Robert Half, 31% of all respondents said they would consider quitting their jobs by the end of 2021 if they did not receive a raise.

While pay increases land at the top of employee asks in some research, HR teams may need to take a broader perspective at the benefits space in order to gain an advantage in attracting talent. Sources recently told HR Dive about the importance of focusing on topics such as flexibility, caregiver support and mental health throughout 2022.

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Source: HR Dive

https://www.hrdive.com/news/planned-2022-salary-increases-not-enough-to-retain-talent-comp-pros-say/617345/

by Renee Cocchi | December 7, 2021

Want to know what your peers’ top priorities are when it comes to their benefits plans for 2022?

Cost management, new services and offerings, and employee engagement.

Cost management is a top priority because 94% of respondents to a Maestro Health survey believe costs will continue their upward trend as high as 20% more.

Switching providers

OK, so maybe that’s not a huge surprise. But what’s surprising is that 71% of the respondents said they’re contemplating switching health plans or administrators in 2022.

Reason: They’re unhappy with their current plan’s flexibility and customer service. And with costs rising, Benefits pros are looking for ways they can counteract it. Switching to an administrator that is more in tune with their wants and needs is one way to do that.

The report surveyed 600 U.S. HR professionals who manage their company’s health insurance benefits. It revealed Benefits pros are wanting to take back control of their plans.

“It’s not surprising that a majority of HR professionals are looking to change insurers or plan administrators in the new year,” said Brandon Wood, CEO of Maestro Health, a tech-enabled third-party health and benefits administrator. “The demand for flexibility has significantly increased and with companies’ priorities shifting in 2022 as a result of the pandemic, HR-decision makers will be focusing on new cost-saving tactics that provide the best quality of care for their employees.”

Cost savings

Other cost-saving strategies on the table for 2022 are:

• penalties for people who “do not receive proactive COVID-19 care” (52%)
• alternative reimbursement strategies (52%)
• pharmacy benefit management for specialty, mail and retail pharmacies (51%), and
• care access solutions (45%).

The report pointed out that out-of-network repricing management, provider network partnerships, and quality and cost transparency tools are often overlooked when it comes to cost management strategies. But not only do they provide a lot of savings, they also end up expanding and personalizing health services for employees. And since they’re often found in self-funded or level-funded plans we’ll probably see a growth in them in 2022.

As for what services and offerings they’ll be expanding, 59% said telehealth services, 56% said mental health services and 53% said health plan member enrollment.

Unused services

Another cost saving strategy is not paying for services employees aren’t using.

While 94% of the respondents feel they communicate “often enough” with employees about their health benefits, 78% say 11% to 20% of the services they pay for go unused. And 14% said that number is closer to 31% or higher when it comes to unused services.

Reasons for this:

• employees don’t actually need those services
• they might not know about them or understand them, and/or
• Benefits may not have the proper support or tools effectively engage members.

So if you’re administrator isn’t providing the proper tools and support, maybe it is time to switch.

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Source: HR Morning

https://www.hrmorning.com/news/benefits-plans-2022/

Published Dec. 21, 2021 | Kathryn Moody

Dive Brief:

• More employees may receive a cash bonus this year as employers scramble to keep talent on board, a Dec. 9 report from Grant Thornton revealed. Sixty-eight percent of HR leaders surveyed said they increased the number of employees eligible to get a cash bonus.
• More than half of those surveyed said they expected to grant average merit increases of more than 5%. However, a separate Grant Thornton report that surveyed employees noted that more than half of respondents would give up a 10-20% salary increase for better flexibility regarding where and when they work.
• "It's clear that employees value the flexibility they have had since the start of the pandemic," said Tim Glowa, principal at Grant Thornton. "However, not all companies will want or be able to offer 100% flexibility. If flexibility is not an option, it is critical to differentiate your value proposition in a meaningful way."

Dive Insight:

In an attempt to fill jobs, more employers have been turning to bonuses and increased wages to attract talent.

Some of those bonuses come in the form of sign-on and referral bonuses, a November WorldatWork survey noted. The sign-on bonus was the most common form used in recruiting, cited by 79% of those surveyed; only 7% said they used no forms of bonus in recruiting.

Others are offering retention bonuses as a form of appreciation for employees' work during the pandemic. Target, for example, paid its hourly workers $500 in January — the third round of such bonuses the company offered since the start of the pandemic.

But more broadly, signing bonuses may be replaced by higher base salaries, according to a Salary.com survey published in August. While half of employers in that survey said they were offering signing bonuses in 2021, only 20% said they would be doing so by the end of the year.

The bigger question at hand for employers may be the future of flexibility at work, as implied by the Grant Thornton survey. Employers and employees may still be at odds; 76% of employees surveyed by Future Forum said they did not want to return to the office full time, while 68% of executive respondents said they wanted to work in the office all or most of the time.

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Source : HR Dive

https://www.hrdive.com/news/as-employers-scramble-to-keep-talent-cash-bonuses-reign/616420/

DECEMBER 2, 2021 JOANNA KIM-BRUNETTI 

The end of the year is officially here and with it, a whirlwind of ACA responsibilities to tend to for the upcoming filing season.

To assist you with your ACA responsibilities, we’ve curated a list of the most common ACA filing questions and answers. We hope you find these to be helpful as you head into the 2021 tax season and prepare your ACA filings with the IRS and state governments.

What type of organization must comply with the ACA’s Employer Mandate?

Under the ACA’s Employer Mandate, employers with 50 or more full-time employees and full-time equivalent employees are Applicable Large Employers (ALEs) and must:

• Offer Minimum Essential Coverage (MEC) to at least 95% of their full-time employees (and their dependents) whereby such coverage meets Minimum Value (MV); and 
• Ensure that the coverage for the full-time employee is affordable based on one of the IRS-approved methods for calculating affordability.

Do only ACA full-time employees require a 1095-C?

Yes. ALEs are required to furnish to their ACA full-time employees a 1095-C Form. The same goes for filing to the IRS and most state governments. Oftentimes, employers over-report their ACA information and include employees that didn’t need a 1095-C form. The challenge with overreporting is that it can subject your business to greater ACA penalty risk from the agency. 

If an employer offers a self-insured health plan, the ALE must also report on all individuals who enrolled in the self-insured health plan, including non-full time employees and non-employee individuals, such as spouses and dependents.

Need assistance with ACA filing and furnishing? Contact us to learn about our suite of ACA solutions.

What is the TIN Error Reconciliation Process?

The Taxpayer Identification Number (TIN) error reconciliation process is a system that addresses TIN errors. For example, if the IRS Affordable Care Act Information Returns (AIRS) system indicates that an employer’s filing is “accepted with errors,” a list is provided containing all of the employees with respect to whom a TIN error was noted. This typically occurs due to mismatches in the legal names and social security numbers (i.e., TIN) of those employees. This list should be cross-referenced with the employer’s HR/payroll records, which may be out of date.

Employers should be engaging in the TIN solicitation process to ensure names or social security numbers (SSNs) are up to date. Employers filing 1095-C forms that contain incorrect TINs will not be subject to penalties if they comply with the TIN solicitation requirements. The IRS is currently issuing late filing penalties to employers via Letter 972CG and Letter 5005-A to employees that fail to file altogether.

Once you correct the employee names and SSNs, be sure to use the corrected information for future 1095-C filings. Failing to do so could create future ACA filing issues. Please note that the IRS does not require the filing of corrections to SSN or name errors alone without any corrections to the amounts identified in the 1095-C).

What kind of documentation is necessary for substantiating ACA reporting?

Supporting documentation includes items such as offers of coverage, and important plan information which can be found in Summaries of Benefits of Coverage and Enrollment Guides, Employee Handbook, Summary Plan Documents, Employee Premium Rate Sheets and/or Acknowledgement of Offer of Coverage.

If the question is specifically focused on payroll, supporting documentation could be a spreadsheet on which relevant payroll data was downloaded for use in determining full-time employee status.

When in doubt, hang onto any physical or digital information that communicates health plan information and employee offers of coverage. The IRS is ramping up ACA enforcement efforts and employers should retain all relevant documentation in the event of an inquiry. Trusaic will handle the documentation retention process for you, as well as prepare a defense of any IRS inquiry with its ACA Complete solution.

We hope that the information above proves helpful as you prepare for 2021 ACA filings. If you’re unsure of your current ACA compliance status, we invite you to get your ACA Vitals. This free tool will identify any potential penalty risk areas so that you can proceed accordingly.

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Source: The ACA Times

https://acatimes.com/aca-filing-takeaways-for-the-holiday-season/?utm_campaign=IW&utm_medium=email&_hsenc=p2ANqtz-_M9sF63NGV1jTXi1yWyvMHtTB4uQiNRXbC-As6EMvjIm8Y1OS373u2v0LVtmFxPzJAUMX7pwrPsZI4epUocJC5u9YkFrIpqZjQRuzteEcY5ThQ5Nw&_hsmi=197980998&utm_content=197980998&utm_source=hs_email&hsCtaTracking=48b563e7-1666-40be-94ee-fef24095d55a%7C8317b0c0-267f-4d6f-a1d8-bcfb9af20924

Company also invested $500+ million in wage increases, thank you bonuses over past year

Springdale, Ark. – December 6, 2021 – Tyson Foods (NYSE: TSN) is saying thank you once again to its frontline and hourly team members by giving them approximately $50 million in year-end bonuses for their efforts over the past year. For team members in the U.S., these one-time bonuses will be based on tenure, range from $300 to $700, and be distributed starting this month.

“This is yet another way for us to say thank you and show how grateful we are for our frontline teams’ efforts to keep each other safe, our company strong and our world fed over the past year,” said Donnie King, president and chief executive officer of Tyson Foods. “While 2021 presented many challenges, our entire Tyson team continued to meet them, head on.”

Tyson Foods has also invested more than $500 million in wage increases and thank you bonuses for frontline workers over the past year. With average hourly pay of more than $18, plus the value of medical, dental and vision insurance, vacation and other benefits, the average total compensation for hourly team members has increased to more than $24 an hour, or an annual value of more than $50,000. This does not include overtime, an option many team members choose, or other incentives. For example, as part of the company’s efforts to protect its U.S. workforce against COVID-19, the company paid $200 to frontline team members who were fully vaccinated.

Tyson is looking at other ways to better support its frontline workforce. In addition to pay increases and signing bonuses, it is offering more flexible work schedules at some facilities and, starting January 1, 2022, paid sick leave. The company has opened seven health centers to give frontline team members and their families easier access to high-quality healthcare at, in most cases, no cost. Tyson is also addressing childcare needs. For example, the company recently launched a pilot to offer access to high-quality childcare for late-shift workers at its Amarillo, Texas, beef production complex.

“Tyson wants to be the most sought-after place to work, period,” said King. “Our frontline team members tell us higher pay is important, but that’s only a part of the story—they also want more flexibility and more say over their time. In rural parts of the country, they don’t want to have to drive miles to see the doctor. Everything we’re doing is because our team members are the heart of our business and its future success.”

Tyson also provides training and development opportunities so frontline team members can further their career and personal goals. The company’s Upward Academy program, which marked its fifth anniversary in 2021, helps team members develop life skills, offering free and accessible classes in English as a Second Language (ESL), High School Equivalency (HSE), U.S. citizenship, financial literacy and digital literacy. Earlier this year, the company launched Upward Pathways, an in-plant career development program that provides frontline team members with free job skills training and workforce certifications. A third program, 1+2 Maintenance Training, is an “earn while you learn” education and career opportunity for team members interested in highly skilled, high-paying maintenance jobs. Tyson offers the program in collaboration with local community colleges in many locations, and also pays two-thirds of the tuition.  

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Source: Tyson 

https://www.tysonfoods.com/news/news-releases/2021/12/tyson-foods-give-frontline-hourly-team-members-approximately-50-million

Heading into the holiday seasons means one thing for compensation professionals — gearing up for the 2022 compensation cycles. And, a big part of that is establishing the budget for annual pay increases.

 

Over the last several years, this has been largely a “rinse and repeat” process for compensation teams as budgets have remained steady at 2.5% to 3% — and early indicators based on the August Pulse of the market indicate that is likely to be the case again. But pressures have continued to mount over the past several months with both inflation and quit rates being at 20-year highs. This has resulted in many employers taking a harder look at compensation plans for 2022. 

So, are compensation budgets trending up?

 

Based on insights from more than 950 employers, compensation budgets are going up, but only slightly. Merit increase budgets are tracking at 3.2%*, while total increase budgets, which also include other types of budgeted base pay increases, such as promotion awards, are tracking at 3.5%. This is up just slightly from 2022 projections of 3% and 3.3%*, respectively, from our August Pulse — and an increase over 2021 actual increases of 2.8% merit and 3%* total increase budgets. While still representing a minority of employers, the percentage of employers providing increases of 3.5% or more doubled between the August and November pulses – from 13% to 27%.

 

It’s worth noting that incentive payouts are looking to be strong relative to last year, as 1 in 4 employers say they will have an overall bonus pool more than 10% higher than last year. Nearly half of employers say the bonus pool will be comparable to that of last year (within ± 10%), while only 7% say it will be more than 10% less than last year, 19% say they aren’t sure, and 1% say they will not pay bonuses.

Source: 2021 Compensation Planning Pulse Survey

 

So, back to 3% and we’re all set, right?

 

The reality is that budgets are not yet baked. The majority of employers do not provide increases until March or April, and as we saw during earlier stages of the pandemic, employers are going to defer decisions until the latest point possible. Of more than 950 respondents, nearly half of employers said their budgets are still preliminary, a third of employers have proposed their budget to leadership and only 20% say they have been approved by leadership. So the reality is that these numbers may still change, particularly with the economic uncertainty surrounding Omicron.

 

While this data is useful to understand the expected broad market movement, compensation budgets should be handled the same as any other multi-year strategic investment — and require a deeper examination of the organization’s circumstances.

 

Most organizations are struggling to attract and retain the talent they need. With extensive media coverage about the labor market and inflation, employee expectations are still running high. And, with 10.4 million open jobs, the tough reality is, at the moment, most employees would likely have no trouble finding a new role – and likely command a premium for job switching. 

So what can you do?

 

1.       Prioritize your hourly workforce

 

Our research has shown that this is the segment of the workforce driving the continued attrition in the workforce — and wages are moving fast. Keep in mind that annual merit budgets do not take into consideration other types of increases. Of employers reporting, 37% have increased their internal minimum wage since March 1 for at least some positions and another 5% are considering doing so before the end of 2021. BLS data shows year-over-year average hourly earnings have increased by 4.9% — so if you haven’t already addressed your starting wages for your hourly workforce, now is the time.

 

2.       Seal the cracks

 

Merit budgets have a tendency to be spread like peanut butter. This often means that gaps in pay competitiveness are not addressed and there are pockets within the organization at the employee, job, or function level where pay is falling short.

 

Below-market compensation presents a talent-retention risk in a hot job market. It also means that organizations may be more likely to resort to off-cycle increases outside of the merit process — for which 3 out of 4 organizations do not budget. Failure to proactively address these gaps in competitiveness can lead to increased turnover, higher spending, and potential pay equity concerns when increases are distributed outside the process (and generally to those who make the most noise).

 

Organizations should ensure that their merit budgets are sufficient enough to close gaps in competitiveness — and also ensure that the budget is distributed where it’s most needed. That may mean a segmented approach that considers critical business segments, high performers, and/or those below market.

 

3.       Don’t forget the broader employee experience

 

While pay matters, a lot, in many cases it’s when the broader employee experience falls short that employees will start to shop their options. Employees are feeling exhausted and burnt out from the pandemic, and that is leading to a great reckoning about work. While pay is important, don’t lose sight of the bigger picture. Examine ways you can support your workforce with their unmet needs, deliver higher quality jobs, and create more supportive flexible environments.

 

As we continue to navigate this unprecedented labor market, the pressure will be on for compensation departments. Now is the time to double-down on your strategy and target your investments where they will deliver the most value to your business. 

* All data reported represent averages and include zeros (i.e., companies that did not provide merit, or are not planning to provide merit, are included in the totals). 

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Source: Mercer

https://www.mercer.us/our-thinking/career/compensation-is-going-up-but-is-it-enough.html

Dec 13 (Reuters) - Health insurance costs for employers rose the most in over a decade this year as Americans resumed non-urgent procedures delayed earlier due to the COVID-19 pandemic, according to a survey published on Monday.

The survey by benefits company Mercer of firms that employ about 118 million people showed the average cost of employer-sponsored health insurance per employee jumped 6.3% this year to $14,542 - the largest rise since 2010.

The increase was just 3.4% in 2020 when the pandemic had strained hospital capacity and forced people to put off elective procedures.

"I think that's (catch-up care) certainly part of the cost driver," Kate Brown, Mercer's Center for Health Innovation Leader, told Reuters.

Brown said several other factors, including claims related to the treatment of long-term effects of COVID-19 and specialty drug pricing, could also be driving the cost rise and may continue into 2022.

The survey, which included 1,745 public and private employers, showed firms expect a "fairly typical" cost increase of 4.4% next year.

But most of them were unwilling to try to reduce the cost increase as they double down on making physical and mental healthcare more affordable for employees dealing with the stress of the nearly two-year-long pandemic.

Tracy Watts, national leader for U.S. health policy at Mercer, said generous health benefits could help companies in attracting and retaining staff in the tight labor market.

Adding or expanding programs to increase access to behavioral healthcare was among the top three priorities for all large employers, the survey showed.

"It's clearly become very salient throughout the pandemic that mental health is a critical need for all people and it's become really more top of mind for most employers over the last two years," Brown said.

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Source: Reuters

https://www.reuters.com/legal/government/employers-health-insurance-costs-surge-2021-elective-procedures-resume-survey-2021-12-13/