There are very few talent-related issues that generate as much attention as compensation—in particular, how compensation compares among all the various employees at an organization. Historically, companies have preferred not to share information about compensation out of fear that those who are on the bottom half of the compensation chart will become disappointed and disengaged when they learn that they are earning less than their colleagues. This fear has been a major factor in the business community’s objection to the CEO-employee pay ratio reporting rule that came into force in the US this year: When you publish the salary of the median employee, half your employees inevitably discover that their pay is “below average.”
This idea of hiding compensation for fear of disengaging employees is a relic of the past, however. The reality today is that employees can get a sense of how their compensation stacks up compared to their peers through a growing number of websites that share this information publicly, such as Glassdoor, PayScale, or Salary.com. In other words, employees can already find out how their compensation compares to others and are already talking about it; the question for senior leaders is whether they want to participate in or shape these discussions.
As technology has forced greater transparency in compensation, some companies have decided to actively manage the conversation by proactively revealing to their employees what their co-workers, managers, and senior leaders earn. The New York-based tech company Fog Creek Software is one such organization; eight months ago, it gave its three dozen employees a chance to see what their peers were making. On Bloomberg’s “The Pay Check” podcast this week, Rebecca Greenfield checks in with Fog Creek to see how it went:
Fog Creek’s chief executive officer, Anil Dash, believed … that salary transparency would shine a light on unfair pay practices and ensure things stayed that way. Dash, an entrepreneur, prominent tech blogger and prolific tweeter, is a rare, pro-union, tech CEO who also believes in the old-guard internet principle that information wants to be free. “Transparency is not a cure-all and it’s not the end goal, it’s a step on the way to the goal, which is to be fair in how we compensate everyone,” Dash said. …
The US labor market continues to grow, but hiring slowed slightly in August, with employers adding 156,000 new jobs and the unemployment rate increasing slightly from 4.3 to 4.4 percent, according to the Labor Department’s monthly jobs report. The Associated Press examines the numbers:
Job growth in June and July was revised down by a combined 41,000, leaving an average monthly gain this year of a solid 176,000. Taken as a whole, Friday’s jobs report pointed to an economy that is still steadily generating jobs, though at a slower pace than it did earlier in the recovery from the recession. With fewer people looking for work, fewer jobs are being filled.
One persistent soft spot in the job market is that pay raises remain tepid. Average hourly pay rose just 2.5 percent over the 12 months that ended in August. Wage growth typically averages 3.5 percent to 4 percent annually when unemployment is this low. … Overall, hiring this year has averaged 176,000 a month, roughly in line with 2016’s average of 187,000. August was the 83rd straight month of job gains.
The report does not account for the economic impact of Hurricane Harvey, which came too late in the month to be reflected in the Labor Department’s surveys. Economists tell the AP the effects of the disaster will likely be visible in the months to come, with job growth first weakening and then rebounding as workers who were temporarily laid off are rehired.
Overall, August’s job numbers undershot economists’ expectations, CNBC’s Jeff Cox reports, but not enough to cause concern:
The August Job Openings and Labor Turnover Summary, released by the Bureau of Labor Statistics on Wednesday, shows that nearly 3 million employees quit their jobs voluntarily that month. Economists see this as a sign of labor market strength, Andrew Soergel writes at US News and World Report, indicating that workers feel increasingly sure of getting a new job:
“Optimism continues to build over the near-term hiring outlook,” Sam Bullard, a senior economist and managing director at Wells Fargo Securities, wrote in a research note last month, noting that “labor market conditions have been supportive to the recent increase we have seen in confidence and consumer spending growth.”
Quits have been consistently high all year as the labor market continues its record-setting run of job creation. American employers generated 156,000 new jobs last month, according to a separate report the bureau released Friday, and have ginned up more than 1.6 million additions so far this year. And with more newly created positions and a consistently high number of job openings, domestic employees have plenty of options if they opt to leave their current positions in search of new ones. Job openings fell back slightly in August after coming just shy of an all-time high in July, but employers were still actively recruiting for more than 5.4 million vacancies.
Meanwhile, more than 5.2 million workers were hired in August – which makes it the third-best month for new hires so far this year. Professional and business services brought on more than 1 million new workers, while health care and social assistance outfits accounted for 542,000 additions.
The latest JOLTS data comes amid other encouraging indicators in the US labor market.
Monkey Business Images/Shutterstock
After suffering a shock in the aftermath of June’s Brexit referendum, business confidence in the UK appears to have stabilized. A new report from ManpowerGroup suggests the same, but as Alexandra Gibbs observes at CNBC, there are signs of trouble down the road:
In the latest Manpower Employment Outlook Survey, out of the nine industry sectors surveyed, eight are expected to grow in staffing levels during 2016’s final quarter, highlighting that on the surface, the referendum outcome has “done little to dampen employers’ immediate hiring plans.” … Yet in its survey which looks at U.K. employer responses, despite job prospects having remained relatively stable, Manpower suggests that “cracks in the ice” are starting to appear within the country’s labor market, after six out of nine sectors reported a drop in jobs optimism.
Portrayed as “bellwether sectors”: construction, financial & business services, and utilities showed the biggest declines in confidence, having all reported a four percentage point dip in employer optimism when comparing Britain’s final quarter to its third quarter for 2016. Looking at regions, employers in Yorkshire & the Humber and Northern Ireland expect staffing levels to fall. On top of that, the Manpower outlook survey revealed that sentiment around hiring in the public sector had tumbled to its weakest level in over four years. A sector that according to Manpower, accounts for close to one in 10 U.K. jobs.
I still don’t think the optimistic August numbers are enough to ward off concerns about the future of the UK’s labor market. The sectors showing the biggest increase, according to Manpower, are agriculture and hotels/retail. The agriculture sector depends heavily on seasonal migrant workers from Europe, and just this week, British farmers called on the government to make sure they still have access to that vital labor pool after the UK exits the EU.
In their latest research, management scholars András Tilcsik and Juan Almandoz looked at whether a board of directors packed with domain experts was actually better at steering an organization than one with a more diverse composition in terms of backgrounds. An overabundance of experts, they found, might actually be a bad thing. Discussing their findings at the Harvard Business Review, the authors identify three factors that may result in making expert-dominated boards less effective:
The first factor is what psychologists call “cognitive entrenchment.” As we gain deeper expertise in an area, we acquire more accurate and detailed knowledge but also become less flexible in our thinking and less likely to change our perspective. So expert-dominated boards might be less effective in responding to new information or unfamiliar situations. Indeed, related research shows that executive teams made up of many industry experts are less flexible in responding to changes in the competitive environment. …
US News and World Report’s Lauren Camera recently highlighted a new paper from Colorado State that finds “calculus is 1.5 times more likely to discourage women than men from continuing on in their chosen STEM field—not because of their ability, but because of confidence in their ability”:
Before taking Calculus I and after finishing the class, researchers asked roughly 5,000 students from across the country about their interest in and intention to pursue a STEM degree, their test scores, preparation, learning experience, plans and backgrounds. Those who continued on to Calculus II were considered to “persist” in the STEM track.
Of the students who switched out after Calculus I, when asked why they decided against taking Calculus II, most of the possible explanations – including reasons like “too many classes” or “not needed for their major” – fell equally across the genders except for one reason. Of those who had been planning to major in a STEM area, 14 percent of men who switched out listed “I do not believe I understand the ideas of Calculus I well enough to take Calculus II” as a reason compared to 35 percent of women. But in reality, the researchers found, fewer than one in five of the departing students of either gender received grades that would have prohibited them from continuing to Calculus II.
To be sure, interest in STEM careers at early ages is about equal, with about two-thirds of fourth grade boys and girls stating an interest in science. However, of graduates entering careers in STEM, only one quarter of them are women.
Ugh! Another study with results blaming women’s confidence for gender inequalities. First of all, I think it’s crazy that we’re in a place where we’re still having conversations along the lines of: “Surprise! It’s not women’s ability that blocks them from the STEM pipeline; it’s something else!” That people still question women’s ability to excel in calculus, in STEM careers, or really in anything, is honestly fairly depressing.