As UK Organizations Publish Gender Pay Gaps, Questions Arise Over Enforcement

As UK Organizations Publish Gender Pay Gaps, Questions Arise Over Enforcement

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.

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Judge Presses EEOC to Rewrite Wellness Rules by Next Year

Judge Presses EEOC to Rewrite Wellness Rules by Next Year

When a district court in Washington, DC, ordered the US Equal Employment Opportunity Commission to rewrite its rules governing incentives for employee wellness programs last August, the court declined to vacate the commission’s current rules in order not to create disruptions in businesses that had already implemented programs based on them. The AARP, a lobbying group for older Americans and the plaintiff in the case against the EEOC, petitioned the court to amend its judgment and vacate the rules.

In its latest ruling, issued in late December, the court agreed to do so, but not until January 2019. Labor and employment attorney Jonathan E. O’Connell outlines the latest chapter of this legal drama at SHRM:

Also playing into the court’s decision to modify its prior judgement was the timeline offered by the EEOC for issuing its revised rule. The EEOC indicated that the new rule would not likely be ready until 2021. The court stated that such a lengthy delay was inconsistent with its expectation that the revised versions of the rule would be issued in a timely manner and thus also supported reconsideration of the court’s earlier decision. The court stated that “an agency process that will not generate applicable rules until 2021 is unacceptable” and strongly encouraged the EEOC to take steps to implement revised regulations faster.

Arguing on behalf of the EEOC, the Justice Department pushed back on that decision in a court filing this week, arguing that the court did not have jurisdiction to impose a deadline on the agency or force it to write new rules at all, Erin Mulvaney reports at the National Law Journal:

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How the Workplace Will Change in 2018

How the Workplace Will Change in 2018

Over the past few years, we have witnessed a marked acceleration in the pace of change in the workplace. Each year brings with it new innovations, ideas, and passing fads, as well as social, political, and economic events that affect employers all across the world. 2017 was no exception: Tight labor markets driving competition for talent, concerns over automation and displacement amid the growing embrace of new technologies, the first year of the Trump administration, and the rise of the #MeToo movement were just a few of the many events and trends that impacted the working world last year. In 2018, we anticipate that some of these developments will continue to reverberate, while new challenges and opportunities will arrive.

Here are some of the major developments that employers can expect to see this year, in the US and around the world:

The Sexual Harassment Reckoning Will Only Grow

In the second half of 2017, revelations of sexual harassment, misconduct, and assault poured out of Silicon Valley and Hollywood, sparking a long-overdue conversation about the treatment of women and the harboring of known abusers in these male-dominated industries, as well as in politics, media, and other fields. Powerful men, from Hollywood moguls to tech CEOs to members of the US Congress, were toppled by multiple allegations of sexual misconduct ranging from inappropriate workplace behavior to outright assault. Organizations in all sectors are facing unprecedented public attention to their sexual harassment policies, how diligently they enforce them, and whether they uphold an inclusive and respectful work environment. If the reckoning didn’t come to your industry in the past few months, it likely will this year. Business leaders in corporate America and around the world will have their past and present behavior scrutinized, and some will be exposed as abusers and face strong public and investor pressure to step down. Addressing toxic workplace cultures that enable sexual harassment will become an issue of even greater concern for directors and HR leaders. Companies can ill afford to close their eyes and hope for this problem to go away on its own; time really is up.

The Private Sector Will Lead the Way on Raising the Minimum Wage

Congress is unlikely to take action to increase the federal minimum wage in 2018. Some states will raise their minimum wages, as will some cities, while other states will take action to preempt local hikes. Meanwhile, companies will take it upon themselves to increase their pay floors in order to attract and retain talent in a tight labor market. As large employers of low-wage hourly workers like Walmart and Target increase their own minimum wages, other companies will need to follow suit to remain competitive.

Technology, Social Media, and Journalists Will Continue to Bring Transparency into Company Culture

Companies’ cultures and employer brands are in the spotlight now more than ever before. The decisions, approaches, policies, and beliefs through which companies manage their employees will play a dramatically larger role in how consumers and investors (not just candidates and employees) view the company. In 2018, this will put pressure on companies to manage their employer brands through HR as aggressively as they protect their consumer brands through PR.

CEOs Will Be Forced to Take Stands on Political And Social Issues

Throughout 2018, the political polarization and dysfunction that has prevailed in Washington, D.C. recently will almost certainly persist, while gender equality, diversity, immigration, LGBT rights, and other issues with major workplace implications will remain hot-button topics. While some CEOs have already found their voices when it comes to responding to the news of the day, others will feel pressure this year from customers, employees, and investors alike to be more vocal about their beliefs and to back them up with concrete actions within their companies.

AI Will Play a Bigger Role In Hiring, Raising the Risk of Algorithmic Bias

The use of AI and algorithms in hiring decisions has already grown dramatically. In 2018, companies will continue to adopt these technologies, but many will also begin to recognize the danger of algorithmic bias. While these automated solutions have shown promise in terms of improving quality, efficiency, and even fairness in the recruiting process, they also run the risk of harming diversity in the workforce by replicating biases that already exist within the company.

Adoption of Wearables in the Workplace Will Increase

In 2017, 3 percent of companies introduced wearable technology in the workplace, giving employees smart badges to monitor their behavior in order to track productivity and identify inefficiencies in the use of office space. In 2018, as more companies adopt technology that can track the location and behavioral data of employees, companies will begin to use this data to redesign workspaces, schedules, and workflows to maximize employee productivity. As these technologies become more mainstream, employers may not have to worry as much as they think about employees resisting their implementation, but should think carefully about how much actionable insight they are gaining by monitoring their employees.

More Employees Will Change Jobs Due to a Lack of Respect

While compensation continues to be the top driver of attraction for candidates globally, respect was the the fourth most important driver in our Global Talent Monitor Report for Q3 2017. In 2018, the labor market will continue to remain tight and employees will feel that they have enough control to speak openly about the lack of respect or appreciation. If companies aren’t able to provide increased compensation or opportunities for growth, they should look at ways to improve employees’ sense of respect in order to retain talent.

Citigroup Finds Small Pay Gaps, Pledges to Close Them

Citigroup Finds Small Pay Gaps, Pledges to Close Them

In response to pressure from activist investors, Citigroup recently conducted a pay survey of its workforce in the US, UK, and Germany, which found very small (1%) pay gaps based on gender and race. In response to these findings, the company announced on Monday that it would adjust salaries to close these gaps, becoming the first major US financial institution to do so, Reuters reports:

On average, Citi found, women and minorities are paid 99 percent of what men and non-minorities are paid, respectively. Compensation would be raised based on the pay gaps identified in the survey, Citi spokeswoman Jennifer Lowney said. …

[Activist investor Arjuna Capital] asked Citi’s shareholders last year to vote in favor of a proposal requiring the bank to address the gender pay gap. But on Monday, Arjuna withdrew that proposal, saying that Citi’s announcement represented a major shift for U.S. banks and credit card companies.

Arjuna Capital, the activist arm of investment firm Baldwin Brothers Inc, has been using shareholder resolutions to push for action to address gender pay gaps at a number of large US companies, including other big names in finance and tech. Last year, Arjuna succeeded at pressuring Amazon into conducting a pay gap study, which found that women earned 99.9 cents for every dollar that men earned in the same jobs.

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Video: Why Employees’ Perceptions of Pay Equity Matter

In our recent pay equity research at CEB, now Gartner, one of our key findings was that employees tend to perceive pay inequities based on gender or race as larger than they really are. These perceptions have a direct and significant negative effect on retention and morale, creating a bottom-line reason for organizations to communicate more openly with their employees about pay gaps that exist within their workforce, what they mean, and what the organization is doing to address them. Our Total Rewards team has produced the above video to help employers better understand the importance of pay equity perceptions.

Our own Ania Krasniewska also highlighted this subject in her recent overview of the five things most companies don’t realize about pay equity:

[T]he gender pay gap and pay inequality are often conflated in the public consciousness, and most employees don’t have the same nuanced understanding of group-to-group and role-to-role gaps as compensation leaders do. That means they often think pay gaps are larger than they really are or that they exist in places they don’t. In our research, we’ve found that employees tend to overestimate these role-to-role gaps and that women tend to overestimate them more than men.

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Walmart Raises Entry-Level Wages, Expands Parental Leave

Walmart Raises Entry-Level Wages, Expands Parental Leave

Walmart, the world’s largest private employer, announced on Thursday that it was raising its starting hourly wage from $9 to $11 per hour, introducing a more generous parental leave policy, and offering one-time cash bonuses based on length of service for its US workforce. CEO Doug McMillon revealed the changes in a note to employees:

[W]e’re raising our starting wage to $11 an hour for Walmart U.S., Sam’s Club, Supply Chain, eCommerce and Home Office hourly associates effective in February. We’re also providing a one-time bonus to hourly associates that pays a larger amount the longer you’ve been with our company. Associates that don’t benefit from the new starting wage increase are eligible for the bonus and it will range from $200 to $1,000 depending on your length of service. …

I’m also excited to tell you that we’re making an important change to benefits by expanding our paid leave policy to provide full-time hourly associates with 10 weeks of paid maternity leave and six weeks of paid parental leave. This expanded parental leave also applies to salaried associates and to parents who adopt. We will also contribute $5,000 to the cost of adoption.

McMillon cited the corporate tax cut passed by the US Congress in December as part of what prompted the company’s decision. Several other major US employers, including AT&T, Wells Fargo, and Boeing, have also announced plans to invest part of their tax savings in raises or bonuses, though most companies have said these savings will mainly be spent on debt repayment, dividends, and stock buybacks.

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PayScale Study Highlights Engagement Value of Appreciation, Company Outlook

PayScale Study Highlights Engagement Value of Appreciation, Company Outlook

Chris Martin, Director of Research at PayScale, showcases the findings of a recent study his company conducted based on survey responses from more than 500,000 US employees. The study sought to gauge the impact of various criteria on employee engagement and intent to stay in their current jobs:

Two variables stood out from the pack for both outcomes: whether an employee feels appreciated at work, and whether they feel their organization has a bright future. Employees who feel unappreciated or who think their organization isn’t going anywhere are less likely to feel satisfied at work and more likely to plan on seeking a new job in the next six months.

Although they don’t align precisely, PayScale’s findings here underline a key insight from our Global Talent Monitor at CEB, now Gartner. This quarterly report provides workforce insights on global and country-level changes about what attracts, engages, and retains employees, based on data from more than 22,000 employees in over 40 countries. (CEB Corporate Leadership Council members can peruse the full set of insights from Global Talent Monitor.)

What our latest global data show is that while compensation is the most common driver of talent attraction both worldwide and in the US, other factors are nearly as important to employees in deciding whether to take a job, including stability (related to the future prospects of the organization) and respect. Indeed, respect has been growing in importance as a talent attraction driver over time, especially in the US, Southeast Asia, and India. When it comes to drivers of attrition (what compels employees to quit), compensation is outranked both globally and in the US by future career opportunity, while people management problems and a lack of opportunities for development are also common factors in employee attrition.

The other interesting finding Martin highlights from PayScale’s study concerns employees’ perceptions of pay practices:

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