Ever since Recruit Holdings, the Japanese HR conglomerate that owns Indeed, announced last month that it was acquiring Glassdoor, speculation has run rampant that the parent company would inevitably combine the two properties into an even larger online recruiting behemoth, perhaps as a defensive move against Google’s new job search feature. Matt Charney at Recruiting Daily, in his massive, four part “Requiem for Glassdoor,” concludes that even with their powers combined, Indeed and Glassdoor have no hope of competing with the search engine where 80 percent of job searches begin. With so much control over the front end of the funnel, Google has the power to render its competitors in the job search aggregation market virtually invisible to most users. No matter how much traffic Indeed buys, Charney reasons, “that traffic will ultimately be controlled (and priced) by … Google.”
Still, other observers see the Glassdoor acquisition through a different lens, viewing the site’s impact not so much in terms of volume but rather in how it has mainstreamed transparency and accountability on the part of employers in their interactions with candidates. That’s how the Washington Post’s Jena McGregor described it in her column after the news of the acquisition broke:
Analysts say the $1.2 billion pricetag for Glassdoor reflects a company that sits at the nexus of a number of trends: A tight labor market where many workers have their pick of jobs and employers have to work harder to attract them. A growing demand by recruiters and H.R. departments in an era of big data to back up their decisions with metrics. And a technological and cultural zeitgeist where an appetite for transparency and accountability have only grown
These trends were illustrated in a report Indeed issued just a week after the announcement: How Radical Transparency Is Transforming Job Search and Talent Attraction, based on a survey of 500 US jobseekers, highlighted findings like these: 95 percent of candidates said insight into a prospective employer’s reputation would be somewhat or extremely important in their decision making. Among Millennials, 71 percent said transparency was extremely important, while 84 percent of Millennials aged 25 to 34 said they would automatically distrust a company on which they could find no information (even among Baby Boomers, 55 percent agreed that transparency was crucial). No reviews, Indeed found, are even more harmful to an employer’s reputation than bad reviews, since candidates are at least willing to consider an employer’s response to a bad review.
The growth of online pay information sources like Glassdoor is also a central theme in our upcoming work on pay transparency at CEB, now Gartner.
Organizations today are increasingly compelled to pursue pay equity for a variety of ethical, reputational, and business reasons, and HR is the most essential contributor to that effort, though it is not the only one. In a recent article at Talent Economy, Zenefits Chief People Officer Beth Steinberg outlined some key steps HR leaders and professionals can take to commit their organization to closing pay gaps based on gender or race. Her first piece of advice? “Get the leadership team on board”:
Establishing and promoting pay equity starts with leadership. That doesn’t mean that HR is powerless, but HR is handicapped without support from senior leadership. If leadership isn’t already on board, HR needs to make the case for pay equity and show why it’s important to the bottom line. Fairness, especially fair pay, is a huge factor in employee engagement and motivation. When there is a lack of fairness, people become disengaged.
The takeaway? The CEO and leadership team need to understand the importance of paying employees equally. Cultural tenets and values of a company are no longer intangible benefits that reside in a handbook; people want to work for companies that walk the walk, which necessarily includes, but is not limited to, ensuring fair compensation.
Steinberg’s other key action items for HR are to “do the due diligence” and “create a pay structure that employees understand … rooted in research and solid methodology,” and to be prepared for tougher questions about pay equity from more savvy and better-informed employees: “Around compensation, most people can handle a decision that they don’t agree with as long as they understand that the decision was done in a way that’s fair,” she notes. “And the new generation of employees is going to be more vocal in asking about these things.”
Much of her advice here resonates with the actions our Total Rewards team at CEB, now Gartner, recommends that organizations take based on the findings of our major 2017 study of pay equity.
As an early April deadline draws closer, reports continue to trickle in from organizations in the UK with over 250 employees that are now required to publish their gender pay gaps under rules that came into effect last year. The full list is available for download from the UK government and the press has been busy digging through it to see what the gap looks like at large, household-name brands, as well as to identify the worst offenders. Sky News reported last week that, as expected, most of the reports so far show male employees earning more, including those of some familiar companies:
Government figures show that men are paid nearly 65% more per hour at high street fashion store Phase Eight and nearly 52% more at EasyJet. Organisations with 250 or more workers must publish their figures by April, and so far 527 firms have done so. Nearly half of the organisations pay men at least one tenth more per hour and 426 of them pay men more, on average, per hour. …
Public sector bodies that show a wide divergence in pay per hour include the Royal Orthopaedic Hospital in Birmingham (men paid 34.8% more than women), and the Office for Nuclear Regulation (32.9%). Many of the firms in the top 20 in terms of those with biggest gaps are in financial services, including Virgin Money (32.5%), PriceWaterhouseCoopers (33.1%) and asset management firm Octopus Capital (38.1%).
In addition to financial services, businesses in the construction and information and communication technology sectors are reporting some of the widest gaps, the Financial Times has also reported. They add that a scant 70 employers, or 14.6 percent of those that had released their figures as of earlier this month, reported negative pay gaps as of January 1, most of which are smaller organizations working in health care and education. Nationwide, the median gender pay gap stood at 18.4 percent for all employees and 9.1 percent among full-time employees only.
Several new surveys from the UK illustrate the importance of managing against the pressure and stress employees experience at work. In one study, Marianne Calnan writes at People Management, 20 percent of employees said they had taken time off work to cope with excessive pressure:
A further 18 per cent of the 2,000 employees surveyed by the Chartered Accountants’ Benevolent Association (CABA) said they had cried at least once every fortnight because of their job. More than a third (34 per cent) said they didn’t like their job, citing problems such as not being paid enough (9 per cent) and a lack of development opportunities (8 per cent).
The research, released to mark Stress Awareness Day today (1 November), also found that 35 per cent of workers regularly considered leaving their job. The same proportion also said they often missed family occasions or personal engagements because of work commitments. …
Over the past few years, we have seen a growing number of organizations in the US and around the world introduce or expand parental leave benefits for new fathers in their workforce, as well as new mothers, in response to increasing demand for paternity leave and greater work-life balance for working parents in general, particularly among millennials who are starting families. Recent court cases both in the US and in the UK have advanced the argument that granting more parental leave to mothers than to fathers (beyond the additional medical leave to which women who have just given birth are entitled) constitutes gender discrimination.
These lawsuits point to the increasing importance of paternity leave in employee perceptions of their total rewards packages. Our research at CEB (now Gartner) shows that employees are sensitive to changes in both maternity and paternity leave. However, increasing paternity leave actually has a slightly greater impact on employee perceptions of rewards than increasing maternity leave, likely because paternity leave is rarer and more variable across companies.
As a forthcoming benchmark report on employee rewards preferences will show, employees globally also tend to get more utility out of lower levels of paternity leave than maternity leave. That is, employees are more sensitive to an additional two weeks of paternity leave than they are to the same additional amount of maternity leave.
Yet this does not mean that maternity leave is not valuable or important!
Wages at small businesses in the US are beginning to grow at a pace more common to larger companies, the Wall Street Journal’s Ruth Simon reported last week, driven by increasing demand for talent as well as the impact of pay transparency websites like Glassdoor and PayScale. An analysis of ADP data by Moody’s Analytics found that average raises at companies with fewer than 50 employees stood at 1.07 percent over the past three years, significantly more than the 0.69 percent average increase the analysis found for firms of all sizes.
Small businesses have found it necessary to offer more competitive pay packages both to attract new talent and to keep their current employees from getting poached by larger and wealthier firms. Employees, particularly younger workers, also have a better sense of what kind of compensation they can expect to earn with their skills and experience, and are not shy about demanding the pay they think they deserve.
The problem, Simon adds, is that these smaller companies tend to have fewer resources to work with overall, so increases in employee compensation tend to be balanced by cuts in other investments, such as equipment purchases or upgrades. This likely exacerbates the inequality between smaller and larger firms, as companies with larger war chests are better able to pay top dollar for in-demand talent while also investing in other aspects of the business.