Keeping employees happy in their jobs while drawing in new talent has rarely been more difficult than it is in today’s tight labor market, but a group of human resources experts said following best practices can help.
Rolling Meadows, Illinois-based insurance, risk management and consulting firm Arthur J. Gallagher & Co. recently published its 2019 Organizational Wellbeing and Talent Insights Report to help CEOs, CFOs and HR leaders challenge themselves on how to manage pressing challenges in the workplace to gain and keep good talent.
The Business Journal recently spoke to Marina Galatro, senior consultant from AJG’s human resources and compensation consulting practice, about the HR section of the fourth annual report, which formerly was called the Human Capital Insights Report.
Topics explored in the HR section include, among others, paid time off, pay equity and total compensation strategy, culture/diversity and inclusion, corporate social responsibility and financial education for employees.
Galatro has more than 25 years of HR experience and has provided consultation, recommendations and support to companies on topics such as compensation, compliance, leaves of absence, PTO, performance management, policy and procedure development, total rewards, and training and development.
Galatro’s portion of the 44-page report was geared toward how HR and benefits leaders can stay on top of fast-changing absence management requirements, as recent studies have found time away from work has climbed to the second-most important benefit to employees behind health care.
Some employers have responded to the demand by offering unlimited PTO, instituting a voluntary PTO donation program to help those in extraordinary circumstances or giving employees the opportunity to buy extra PTO from the company.
“When programs that support time away from work are strategically integrated with other benefits — absence management becomes part of a broader, stronger employee engagement and productivity initiative,” Galatro and her colleagues wrote in the report.
Still, she recommends companies consult with legal counsel or a tax adviser before implementing any outside-the-box PTO plans because there likely are tax liability issues to consider.
Pay equity and total compensation
The report stresses there is a heightened focus on pay equity because of the fact multiple jurisdictions in the U.S. have introduced legislation to bolster the Equal Pay Act of 1963.
HR departments for companies that stretch across country, state and province lines will find themselves responsible for compliance to laws in different places that don’t quite synchronize, and it behooves them to do their homework.
Regarding total compensation, the report notes, “HR teams are under constant pressure to keep fishing for prize talent in a persistently shallow pond,” so work-life benefits need to be paired with a competitive salary to keep workers from swimming to new waters.
Those benefits include flexible work arrangements, rewards programs, incentive compensation, tailored health benefits and more.
Culture/diversity and inclusion
Diversity and inclusion is a vital component of workplace culture for employers and HR teams to address, Galatro said.
“The key thing when it comes to diversity and inclusion, which is embedded in the company culture, is all about respect in the workplace,” she said.
“We’re talking a lot more to companies about that word ‘respect.’ In addition to educating employees on harassment prevention, it’s important to send that strong message about respect and treating people fairly — and that diversity is not just about race. It’s about gender, gender identity, religion, sexual orientation and, of course, the company culture.”
She said organizations’ HR departments can improve diversity, equity and inclusion not just through workplace trainings but by adding diversity committees; paying attention to the ratio of women and minorities in management positions and adopting equitable hiring and promotion practices; setting goals and developing strategies to meet those goals; working with legal counsel to ensure the organization is compliant with federal, state and local laws; putting up posters and notices regarding DE&I in the workplace, and more.
One more hot-button aspect of DE&I needs to be considered, she said.
“We’re seeing a lot of states now that are saying that you have to have information regarding transgender individuals and bathroom practices, etc.,” she said.
The report lists other aspects of workplace culture, including communication practices and valuing the voices of employees, flexible dress codes, trust and autonomy, and more.
Corporate social responsibility
This topic has been on employers’ minds increasingly as the millennial generation has come of age, according to the report.
“Younger workers elevate the need for a defined corporate social responsibility policy — something that was largely on the back burner just 15 years ago,” the authors said. “In today’s environment of information sharing and media use, what the law doesn’t regulate, customers will.”
Galatro said this isn’t just about giving or corporate volunteer initiatives; it’s about the triple bottom line.
“When you’ve got a socially responsible company, that can help attract investors, customers and then, of course, top talent,” she said.
“And it’s not only good for profit; it demonstrates that the profit was made not at the expense of the employees or the environment or society.”
Financial education for employees
Providing employees with financial education and tools to improve saving and spending habits is not just a nice perk, the report said. It’s a way to impact employee-related costs.
“The government shutdown of 2018-19 highlighted the fragile state of employee financial wellbeing. Research has found that 78% of workers live paycheck to paycheck and more than 1 in 4 don’t set aside any savings each month,” the report said, citing a CareerBuilder study.
“Compounded financial woes create stress that often accompanies employees to their worksite, where it negatively affects productivity and promotes absenteeism. Prolonged anxiety can also lead to health concerns and even work conflicts.”
Galatro said in the past, employers provided financial benefits such as tuition reimbursement and retirement plans, but given today’s realities, many companies have added loan repayment and/or refinancing programs for college graduates entering the workforce with high loan payments.
“As companies look at their total reward strategy, deciding on what they’re going to offer to their employees because they value their employees and that’s what some of the employees value, I do believe there’s going to be more of a trend in offering this loan repayment program,” she said.
Galatro said employers can assess their competitive edge in the talent war by conducting “stay interviews” — the opposite of exit interviews — to find out why employees at certain tenure levels have decided to stay however many years they’ve been there. That way, they can focus their efforts on what employees value.
“There are a lot of things that employers can do to make them an attractive place to work,” she said.