How to Get the Most From Investing in Employee Wellbeing

How to Get the Most From Investing in Employee Wellbeing

While organizations have been using health and wellness programs to engage employees for decades, in recent years the rewards space has moved toward a more holistic view of employee wellbeing. Today, companies are feeling pressure from all sides to enhance their employee wellbeing programs. Employees are hearing more about the wellbeing benefits their friends are being offered at other organizations, our peers are innovating in this space, and vendors are constantly coming up with new services to differentiate themselves as they compete for our business.

Facing these combined pressures, companies have greatly expanded their wellbeing offerings in the past five years: Whereas in 2013, the average company had four wellbeing programs, by 2017 that number had quadrupled to 16. In a peer benchmarking session at the CEB ReimagineHR summit in Washington, DC, last Thursday, a plurality of rewards leaders said they expected wellness or wellbeing to be their number one area of change in 2018, more than healthcare or retirement.

Budgets for wellbeing, however, are not growing: Most companies we surveyed at CEB said their wellbeing expenditures were either remaining the same or decreasing from 2016 to 2017. As demand grows while budgets stagnate, many HR functions are being asked to do more with less in their employee wellbeing programs. Here are some facts for total rewards leaders to keep in mind as they try to get the most bang for their wellbeing buck.

Holistic Wellbeing Programs Have a Real Impact on Engagement

The shift in the conversation from wellness to wellbeing reflects a growing awareness that maximizing employee productivity and minimizing health care costs involves not just preventing or managing diseases, or even promoting physical fitness, but also helping to mitigate stress. That’s how psychological, emotional, and even financial wellbeing became part of the more holistic offerings we’re seeing today.

And there’s a good reason for this change, because organizations with well-designed holistic wellbeing programs see levels of employee engagement nearly 10 percent higher than average. Designing a progressive wellbeing program has as much positive impact on engagement as letting employees choose their own hours, and three times as much impact as providing dental and vision benefits.

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5 Things Most Companies Don’t Realize About Pay Equity

5 Things Most Companies Don’t Realize About Pay Equity

Pay equity and pay gaps, especially the gender pay gap, have been drawing greater and greater attention in recent years, both among corporate leaders and in the media. As organizations ramp up their diversity and inclusion strategies, they are feeling a need to close these gaps to demonstrate that the organization is serious about not only hiring for diversity, but also ensuring that compensation is fair for women and minority employees.

However, the coverage of pay gaps in the popular press often misses key details about the problem that compensation leaders need to understand to face this challenge effectively. Here are five things you might not know about pay equity that will make a real difference in your ability to achieve it:

1) Pay Equity Actually Refers to Two Things

Pay equity issues in companies can come from two sources: group-to-group gaps and role-to-role gaps. These terms are often used interchangeably in the media, glossing over an important distinction between gaps among different groups of employees, where pay differences are based on something other than gender or race, and role-to-role gaps, where two employees are paid differently for doing the same job. In the first case, you may have women concentrated in lower-paying roles than men (such as female nurses and male doctors, or male principals and female teachers), which may reflect an unfair distribution of expectations and opportunities, but compensation executives can’t directly and immediately control for those factors (although they can collaborate more broadly to influence them). A role-to-role gender pay gap, on the other hand—male nurses earning more than female nurses—is something compensation leaders can and should address.

Both group-to-group and role-to-role gaps contribute to the pay equity problem as a whole, but it is important to recognize that your compensation strategy alone can’t solve them both.

2) The Problem Is Bigger Than It Looks

In the US, the gender pay gap is often reported at around 20 percent, meaning women earn about 80 cents for every dollar men earn (and women of color earn substantially less). At a large-scale global organization, CEB (now Gartner) research has found, the average gap is even wider: 27 percent. However, that doesn’t all reflect pay discrimination: 9 percent is attributable to choice of occupation; 6 percent to organizational factors like size, industry, or geography; and 5 percent to human capital factors like differences in education and experience.

The gap that remains unexplained is 7.4 percent, and that is the discrepancy that can be ascribed to no other factor than gender. This is the role-to-role gap—and that’s the part that rewards professionals can actually fix. HR owns this gap has an obligation to close it before it becomes a serious problem for the organization.

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