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Looking Ahead
Skill-based Pay. We have already seen how young people, particularly men, are changing the way they are preparing for a career. Instead of the traditional four-year college path, they are choosing more and more to apprentice, get vocational training, and earn certifications. For existing employees, they can be encouraged to gain additional skills, through training and certifications, that are needed in their organization by using a skill-based pay model that places a greater emphasis on skills rather than title, time-in-service, or performance review. As companies need more highly skilled workers at a time when there are not enough of them, organizations can provide pay incentives to reskill the ones they have.
Compression. One result of the spike in pay organizations are using to attract new employees is salary compression. Many new hires are being brought on with significant increases for their position, which creates pay discrepancies between new and existing employees. This can breed resentment among employees who have already been working at the company for years.
Salary Transparency. Several states now have pay transparency laws that require disclosure of a job’s salary range to the applicant in either a job posting, while being assessed, or upon request. It’s too early to tell what impact these laws will have but numerous other states have introduced legislation to implement salary transparency so it will become more widespread. At the very least, the expectation is that it will help women gain greater wage equality.
Bonuses. In a tight labor market, employers look for ways to attract the new workers they need and keep current employees satisfied. One way to do this is with bonuses. Hiring bonuses can be used to attract new hires and to help current employees who may be experiencing financial stress due to high inflation. One advantage to using a bonus, if given in lieu of a salary increase, is that it is not a fixed cost.
Benefits. The pandemic and remote work put the spotlight on benefits that many organizations now understand they need to provide to support a healthy and productive workforce. This includes flexible work hours, increased caregiver benefits, and mental health and wellness support.
Remote work has allowed employees to have a more flexible work schedule and many now expect the same whether they have returned to the office, are on a hybrid schedule, or continue to work from home full-time. The argument for offering flexible schedules, as long as employees are getting their work done without disrupting their co-workers, is the productivity gains that were observed during the pandemic.
Another benefit that has received more attention as the result of the pandemic is caregiver benefits. Employees having to juggle work, caring for their children, elderly parents, and perhaps even a spouse, is not new. But when children were at home and not in school that put even more pressure on working parents and illuminated how stressful working full-time and being a caregiver can be. In response, organizations are looking for more ways to provide support including flexible work schedules, employee assistance programs, stipends to help with caregiver costs, and more flexible use of paid time off.
The isolation, stress, and uncertainties that some people experienced during the pandemic can lead to mental health issues. Even post-pandemic, mental health is a growing concern in the U.S. Organizations are realizing that they need to do more to support their employees with access to mental health resources with an understanding that there is no one-size-fits-all solution.