(l-r) Eric Pfoutz, Charles Camp, Leonardo McClarty, Kelly Mitchell, Jeffrey Agnor (not pictured: Barbara Niklas)
impactHR’s Kelly Mitchell has been elected to serve on the Howard County (MD) Chamber of Commerce Board of Directors. Mitchell, who begins three two-year terms of service, was elected to the Board at the Chamber’s 48th Annual Meeting at Turf Valley, May 18, along with M&T Bank’s Charles Camp; The Mall in Columbia’s Barbara Nicklas and Edward Jones Investments’ Eric Pfoutz.
New Directors with the Howard County Chamber Board, which has up to 35 members serving staggered terms, are selected through a nomination process followed by a vote of the full membership.
“I’m tremendously excited and humbled to have this opportunity to serve our Chamber and its dynamic, diverse membership,” says Mitchell. “This position, to be sure, gives me a chance to work directly with fellow Chamber members and leadership to continue the important work of further growing Howard County’s economy and its prosperity. I’m especially eager to join in the effort to support and promote the Chamber’s new theme, DARE, or Diversity, Advocacy, Relevance and Engagement.” Read more
impactAlert: MD Governor Vetoes Paid Leave Bill, Issues Related Exec Orders
MD Governor Larry Hogan (R) last week vetoed the “Maryland Healthy Working Families Act,” a measure approved earlier this year by the MD House and Senate on paid sick and safe leave. The bill, in brief, would require employers with 15 or more employees to provide their employees with 40 hours of paid sick and safe leave annually beginning on January 1, 2018. With the governor’s veto, the General Assembly now must wait until the 2018 session (next January) to consider mounting an override of the veto.
In addition to this action, the governor issued three related Executive Orders that would: create a task force to prepare a report, due this December, with ideas for a new paid sick leave plan; provide paid leave benefits to all contractual employees in the MD executive branch; and authorize all state procurement authorities to begin giving preference to contractors who offer paid sick leave to their employees. Learn more
impactInterview: Dora Daniel on Trends in Compensation and Benefits in the Workplace Today
It’s axiomatic that having a smart compensation strategy is crucial to your organization or company’s business development and employee retention. Yet, for employers, what are the current trends in compensation? It seems safe to say it’s a mixed bag. Overall compensation (such as wages, salaries, benefits) for US private-sector workers has hovered around two percent annual growth since 2008 (down from four percent annual growth in 2001), according to the US Bureau of Labor Statistics.
Contrast this dynamic with new reports, according to SHRM, that show this year’s college graduates stand to make 14 percent more in starting salaries than those who graduated in 2007 (adjusted for inflation). With this in mind, we talked with Dora Daniel, Senior Consultant and compensation expert at impactHR, on compensation trends in the workplace today.
impactnews: Working with executive management teams on compensation, how do you approach compensation studies for a client?
impactHR’s Dora Daniel
DD: There are typically three areas we look at when we conduct a compensation study for a client. First, we encourage them to establish a compensation philosophy. A compensation philosophy statement helps an organization get clear on where they want to be in the marketplace; how they want to use compensation in their organization; and what specific behaviors they are trying to reward.
The second piece is ensuring we have a clear understanding of the responsibilities of the jobs they want to compare to the marketplace. We achieve that by evaluating job descriptions they have prepared, which often are simply short summaries of job duties (not a formal job description) – or we create position descriptions for our clients as needed, which they must review and approve prior to our use.
Accurate job descriptions are essential to the success of a compensation study because, as we make comparisons of our clients’ jobs to those in the marketplace, we find it’s more effective to focus on job content versus job titles, since an organization’s job titles can vary considerably to those in the marketplace.
The third piece is coming to an agreement on what published salary survey sources we’ll use as a part of the study. We go to great lengths to ensure we use survey sources that are reputable and best represent our clients’ industry, revenue size and peer organizations in their marketplace.
The combination of these three elements results in the creation of market composites – a compilation of survey data points we can present to our clients, that we can say, with a high degree of confidence, are an accurate reflection of their standing in the marketplace. Prior to finalizing the market composites from which business decisions will be made, we complete a validation process that allows our clients to review the comparisons we’ve made and request revisions to ensure the best alignment with the marketplace.
Our approach to conducting a compensation study ensures our clients have a high level of comfort with the process. This is an important outcome when study results are shared with management and staff. Compensation is a sensitive subject in organizations, often with high emotion for employees, because there can be differing beliefs among employees about what their job or skills are worth versus what the market data reveal.
impactnews: In a general sense, is it easier now or harder to help employers and employees meet in the middle on compensation and help pave a productive, positive path forward? With an improving economy broadly speaking, is this process any smoother and less contentious?
DD: At impactHR, we operate from a place of neutrality. We can effectively communicate compensation study findings and outcomes in ways that are less emotional because our discussions are grounded in the process and the work we did to ensure the highest level of accuracy possible when we made the marketplace comparisons. We have enough experience with how study outcomes are implemented in organizations to speak effectively about compensation to both managers and employees.
We also help managers create their messaging as they prepare to communicate with their staff about how study outcomes will impact individual employee pay. Our experience has been that both groups are willing to listen and hear us because we don’t have a pony in their particular race.
impactnews: Can you talk about how benefits fit into your work to help clients set compensation levels for their employees? To what extent are salary and benefits mutually exclusive issues?
DD: In addition to compensation studies, we do conduct benefit program studies for our clients, which includes recommending benefit options based on their employee demographics or evaluating current benefit programs for competitiveness. Many aspects of employee benefits programs, however, are regulated by federal or state employment law, leaving less room for subjectivity. Conversely, most issues of compensation are not as heavily dictated by employment law, giving clients more latitude with program design, but also more ambiguity.
We like to guide clients towards looking at compensation and benefits from a total rewards perspective. Often at the end of a compensation study, the outcomes are unexpected. For example, staff they thought were underpaid are, in fact, paid competitively to the market or staff they believed they paid competitively are being compensated at levels that outpace the market, creating scenarios where pay may need to be frozen for some period to “right-size” staff compensation for market alignment.
In these instances, we encourage clients to consider the total compensation package, such as the value of salary and benefits combined. Some of our clients have very substantive benefits packages, the details of which they haven’t messaged effectively enough to help employees understand the true value of their total compensation package. The message can be: “Ok, you might not be paid a premium salary at this organization, but when you consider both the value of your pay and benefits, the combined package is attractive and competitive overall when compared to the marketplace.”
impactnews: What are some big issues or trends in compensation that you’re following or are concerned about?
DD: One of the most pressing issues in my mind is the whole idea of “pay for performance.” With this concept, we come back to the need to understand, first, what a particular job is worth in the marketplace. From there, as it relates to performance-based increases, the secondary issue is determining how much an employer is willing to pay an employee to do that job, year after year, based on how they performed in that position within the organization.
The economic crash in 2008 forced many organizations into a period of salary freezes. In fact, many organizations are still in that situation today, where they haven’t given out salary increases in several years or are working with much smaller salary increase budgets.
As a result, their compensation levels significantly lag the market. It can be difficult to administer a true pay-for-performance environment when an organization is faced with dual business issues of lack of competitiveness externally and the inability to reward the strongest performers internally.
In these instances, we encourage our clients to consider alternative ways to compensate and retain their best employees (and recruit new talent). For example, rather than focusing solely on increases to base pay, a combination of modest salary increases coupled with non-cash compensation could be a solution.
We also recommend to clients to talk about performance differently in their organizations. It may be time to move away from the traditional labels of “meets or exceed expectations,” to performance descriptors that focus on their next career move in the organization. In this context, clients can consider alternative compensation mechanisms such as lump sum performance payments tied to the demonstration of a new skill that is of value to the organization, incentive payments tied to specific business outcomes, or non-cash rewards like modified work schedules, telework, professional development incentives, etc.
These reward tools are effective in many ways: they help employees achieve or maintain a healthy work/life balance or they support an employee’s development in preparation for the next step in their career. Overall, these types of reward tools can improve employee morale and create increased commitment to their employers.
OSHA Postpones Rule Requiring Certain Employers to Publicly Post Workplace Injuries
The U.S. Occupational Safety and Health Administration (OSHA) last week announced indefinite postponement of a rule, crafted last year, requiring certain employers to report injuries and illnesses in their workplaces for public posting on OSHA’s website. OSHA has neither provided any reason for the postponement nor information as to whether there will be an upcoming effective date for the rule.
Under this rule, the OSHA reporting requirements were to be phased in over two years (beginning July 1, 2017) for establishments with employees in certain high-risk industries, such as agriculture, construction and manufacturing and large employers (e.g., more than 250 employees). The rule’s original intent was to spur employers to make their workplaces safer for employees via public posting of this data in a similar way public health departments report publicly on restaurant kitchen sanitary conditions. Learn more
New Report Details Road Map for the Evolving Workplace
With a new administration well under way, what are some current big-picture trends that may drive the direction of the human resources field over the next few years? A new report from the HR Policy Association details several ideas HR leaders and policy makers can consider in regard to making the workplace evolve in response to changes in employee needs and wants.
Among their proposals, the report suggests helping millennial-generation employees pay off college debt faster by offering a tax-preferred system similar to the 401(k). The report also notes companies should accelerate employee training and development to bolster retention and minimize turnover. To this end, the study recommends two ideas: closer alignment between companies and federally funded workforce development programs and passage of tax incentives to privately fund education, training and development programs.
In addition, emphasizing the reality of global competition for workers, the report suggests providing foreign students a path to US citizenship if they: 1) acquire advanced degrees in STEM disciplines at US higher education institutions and 2) secure employment in their field in the US rather than return to their countries of origin. Learn more
Court Ruling: Sexual Orientation in Three States Protected in Employment
The Seventh U.S. Circuit Court of Appeals last month ruled that sexual orientation discrimination (now in addition to sex as gender) violates the Civil Rights Act of 1964. While this specific Appeals Court ruling only applies to law in Indiana, Illinois and Wisconsin, legal experts say the decision opens the door for federal courts in other circuits, and possibly the US Supreme Court, to issue similar rulings creating employment protections based on sexual orientation.
As it stands, 20 states, including Maryland (plus the District of Columbia), currently have employment non-discrimination laws that cover sexual orientation and gender identity while two states (New Hampshire, Wisconsin) have laws covering only sexual orientation.
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