The latest analysis by the left-leaning Economic Policy Institute calculates that the CEOs of the largest 350 companies in the US out-earned their employees by a factor of 312:1 last year, the Guardian reported on Thursday:
The rise came after the bosses of America’s largest companies got an average pay rise of 17.6% in 2017, taking home an average of $18.9m in compensation while their employees’ wages stalled, rising just 0.3% over the year. The pay gap has risen dramatically, with some fluctuations, since the 1990s. In 1965 the ratio of CEO to worker pay was 20-to-one; that figure had risen to 58-to-one by in 1989 and peaked in 2000 when CEOs earned 344 times the wage of their average worker. …
The astronomical gap between the remuneration of workers and bosses has been brought into sharper focus by a new financial disclosure rule that forces companies to publish the ratio of CEO to worker pay. Last year, McDonald’s boss Steve Easterbrook earned $21.7m while the McDonald’s workers earned a median wage of just $7,017 – a CEO to worker pay ratio of 3,101-to-one. The average Walmart worker earned $19,177 in 2017 while CEO Doug McMillon took home $22.8m – a ratio of 1,188-to-one.
In the UK, meanwhile, new research by the CIPD and the High Pay Centre finds that the median CEO-employee pay ratio for FTSE 100 companies stood at 167:1 in 2017, rising from 153:1 the previous year:
“With more informed buyers to contend with and data as their most powerful sales weapon, sales teams are incorporating more STEM backgrounds within their ranks,” Jared Lindzon writes at Fast Company, in a piece exploring how data and technology skills are becoming as important as interpersonal skills for sales professionals, if not more so:
According to a 2017 study by the Bureau of Labor Statistics, the seventh most popular career for STEM graduates in the United States and most popular noncomputer related role is in sales. … “We are seeing thousands of jobs across the United States in which sales teams are looking for people with STEM related skill sets,” says Glassdoor community expert Scott Dobroski. According to Dobroski the job listing and recruiting website has seen a huge spike in postings for positions that blend sales with STEM skills. …
The demand for STEM skills within sales teams is representative of a seismic shift in sales strategy. This transition has been enabled by technology and the availability of information, both on behalf of the buyer and seller. While the salesperson used to be the primary source of information for their products or services, buyers increasingly have access to specs, samples, and independent reviews. At the same time sellers are able to access information and insights about prospective buyers that would have previously been only accessible through personal interactions.
The nature of the sales role has indeed changed in today’s business environment, especially in B2B sales, where the typical buyer is now most of the way through their decision-making process before engaging with a supplier. This means salespeople need to be comfortable wielding more facts and figures, but also must be adept at managing relationships.
The California legislature is considering a bill that would make it the first state in the US to require women’s representation on the boards of companies headquartered there, but the business community is pushing back, saying the proposed mandate is unconstitutional and counterproductive, Antoinette Siu reports at TechCrunch:
SB 826, which won Senate approval with only Democratic votes and has until the end of August to clear the Assembly, would require publicly held companies headquartered in California to have at least one woman on their boards of directors by end of next year. By 2021, companies with boards of five directors must have at least two women, and companies with six-member boards must have at least three women. Firms failing to comply would face a fine. …
Yet critics of the bill say it violates the federal and state constitutions. Business associations say the rule would require companies to discriminate against men wanting to serve on boards, as well as conflict with corporate law that says the internal affairs of a corporation should be governed by the state law in which it is incorporated. This bill would apply to companies headquartered in California. … Similarly, a legislative analysis of the bill cautioned that it could get challenged on equal protection grounds, and that it would be difficult to defend, requiring the state to prove a compelling government interest in such a quota system for a private corporation.
Legislative mandates or quotas for women on corporate boards are rare, with only a few European countries having adopted them. Norway was the first to do so, introducing a 40 percent quota in 2003, while France, Germany, Iceland, and Spain have since introduced their own mandates. Sweden had an opportunity to join this group but declined it early last year, when the parliament voted down a proposal to fine listed companies where women make up less than 40 percent of directors. In these countries, quotas have proven effective at driving gender equality on boards; critics acknowledge this, but argue that making women’s representation a matter of compliance isn’t changing corporate cultures to really value women in leadership.
Massachusetts State House (Keith J Finks/Shutterstock)
After several years of legislative wrangling, Massachusetts Governor Charlie Baker on Friday signed a bill into law that will limit the conditions under which employers in the state can enforce non-compete agreements on their employees. The law goes into effect on October 1 and will apply to all non-compete agreements signed after that date. Lisa Nagele-Piazza outlines the law’s provisions at SHRM:
The Massachusetts law aims to prevent overuse of such agreements by prohibiting noncompetes with employees who are:
- Nonexempt under the Fair Labor Standards Act.
- Under age 18.
- Part-time college or graduate student workers.
For a noncompete to be valid, it must be:
- Limited to 12 months in duration (with some exceptions).
- Presented to new hires either with an offer letter or 10 days prior to an employee’s start date, whichever is earlier.
- Signed by the employer and the worker.
The agreement must also inform employees of their right to consult legal counsel before signing it. If employers want existing staff to sign noncompetes, they will need to offer “fair and reasonable” consideration beyond continued employment for the agreements to be valid.
The new law is also the first in the U.S. to require that employers offer “garden leave” pay to former employees bound by non-competes. The law requires to pay these employees 50 percent of the highest base salary they earned in the prior two years for one year after their departure, or some other “mutually agreed upon consideration.”
That alternative represents a huge loophole in the law, Michael Elkon, an attorney with Fisher Phillips in Atlanta, tells Nagele-Piazza. What sort of “consideration” counts as valid for the purposes of this law will likely be hashed out in court in the coming years, but Elkon notes that employers will expose themselves to a risk of litigation (before an unsympathetic judge) if they attempt to get around this provision by offering an employee a “consideration” that undercuts the law’s guidelines.
A newly-published study from scholars at Oxford University investigates the situation of the estimated 70 million people around the world who make their living in the gig economy through freelancing platforms like Freelancer.com and Fiverr. Through a combination of face-to-face interviews and a remote survey of digital freelancers in Southeast Asia and Sub-Saharan Africa, the authors gauged how workers in this substantial segment of the global economy felt about the advantages and disadvantages of this kind of work. TechCrunch’s Natasha Lomas outlines the study’s key findings:
The study paints a mixed picture, with — on the one hand — gig workers reporting feeling they can remotely access stimulating and challenging work, and experiencing perceived autonomy and discretion over how they get a job done: A large majority (72 percent) of respondents said they felt able to choose and change the order in which they undertook online tasks, and 74 percent said they were able to choose or change their methods of work.
At the same time — and here the negatives pile in — workers on the platforms lack collective bargaining so are simultaneously experiencing a hothouse of competitive marketplace and algorithmic management pressure, combined with feelings of social isolation (with most working from home), and the risk of overwork and exhaustion as a result of a lack of regulations and support systems, as well as their own economic needs to get tasks done to earn money.
Augmenting the competitive nature of the digital gig economy, the study found, is an imbalance of supply and demand for these workers’ labor: More than half the workers surveyed said there was not enough work available to them. People performing low-skilled tasks on these platforms must take a large number of gigs to earn an adequate income through them.
As digital technologies become more prominent in how organizations work, employers are balancing the need for employees with digital and other hard skills with the need for employees with “soft” social, interpersonal, and communication skills. In fact, employers are increasingly prioritizing social and emotional skills; McKinsey, for example, predicts that skills such as communication, pattern recognition, logical reasoning, and creativity will be in high demand in the coming decades.
With these soft skills in high demand, Jake Bullinger proposed in a recent article at Fast Company that for-profit organizations consider hiring trained social workers to fill that need. Bullinger talks to Michàlle Mor Barak, a University of Southern California social work professor, who notes that companies today require expertise in societal good as they are increasingly under pressure to prioritize things like corporate social responsibility, work-life balance, and diversity and inclusion which weren’t on their radar a few decades ago. Social workers and other experts in social and emotional issues could be particularly helpful in people management and community engagement, Bullinger writes:
A human resources department staffed with therapists could better handle harassment claims, and recruiters working with social scientists could better target minority candidates. Corporate philanthropy arms would benefit, one can surmise, from case workers who understand a community’s greatest needs. The people best suited to run diversity and inclusion efforts might be those who study diversity and inclusion for a living.
I graduated with a master’s degree in social work in 2005 and have spent most of my career working in for-profit organizations. From my vantage point, social workers can provide an array of benefits, but organizations need to be realistic about what they can and can’t do.
Andy Mettler/Wikimedia Commons
After 12 years at the helm of the multinational food and beverage conglomerate, PepsiCo CEO Indra Nooyi announced on Monday that she would retire from her position in October. Nooyi will be succeeded by Ramon Laguarta, the head of PepsiCo’s Europe and sub-Saharan Africa business, who has been with the company for 22 years. In an interview with the New York Times, the 62-year-old departing CEO said she was stepping down now in part to spend more time with her 86-year-old mother:
“You reach a point where you get tired,” Ms. Nooyi said. “Physically tired. And your family starts to demand more time of you. I’ve reached that point.” Inside PepsiCo, Ms. Nooyi was known for working incredibly long hours — as many as 20 hours a day, often seven days a week. When asked Monday whether she felt that made her a good role model for other women, Ms. Nooyi said, “probably not.”
“But you have to remember when I started working in this corporate world, there were hardly any women in the jobs I was in. At that time, 30 or 40 years ago, expectations for women were unreasonable. We had to produce a better product and do everything much better than the men in order to move ahead,” Ms. Nooyi said.
Nooyi’s departure will leave just 24 women leading S&P 500 companies, according to the non-profit organization Catalyst, though that number will bounce back up to 25 again when Kathy Warden takes up her new post as CEO of Northrop Grumman next January. Other women have stepped down from CEO roles at big companies this year, however, including Denise Morrison of Campbell Soup and Irene Rosenfeld of the snack food maker Mondelez International, so the gender balance of this exclusive club is on a downward trend.
Nooyi has discussed her remarkable path to corporate leadership in a number of interviews, as well as why more women don’t make it to the top. In her view, the dearth of women in the C-suite has less to do with sexist conceptions of what leadership looks like and more to do with a pipeline problem, Vauhini Vara explains at the Atlantic, pointing to an interview she gave on the Freakonomics podcast earlier this year. That’s because the critical point in many professionals’ careers coincides with the time in their lives when they become parents and raise their children—a responsibility that still falls primarily on women: