By Blair and Bruce Johanson
PAY EQUITY
WorldatWork and Korn Ferry released results of a 2020 Workplace Equity Study earlier this year. This study includes responses from 964 organizations and based on the study results, WorldatWork and Korn Ferry confirmed that progress was being made toward pay equity and a truly diverse and inclusive U.S. workplace. Specific results include 60% of the organizations saying that they are addressing pay equity in their workplaces, 70% are taking actions to promote diversity, equity and inclusion (DEI) and 73% of the organizations are conducting compensation analyses once per year or more frequently. Pay equity analyses based on several variables are gaining traction for proactive organizations and as a defensive measure for reactive organizations.
COVID-19 Impact on Gender Pay Equity
SHRM published an article on August 10, 2020 titled, “Pandemic Could Worsen the Gender Pay Gap.” This article supports the notion that the pandemic could widen gender pay disparities because women are at a higher risk for pay stagnation or reductions due to being the primary family care giver and taking time off work to care for their children who are being schooled remotely from home. According to a survey by Perceptyx, a business analytics software company, working mothers are nearly twice as likely to carry 100 percent of the child care responsibilities during the workday compared to working fathers. The SHRM article encourages employers to be proactive and look for ways to mitigate the COVID-19 impact on gender pay outcomes and find ways to offer greater workplace flexibility and individualized work plans.
To mark the first International Equal Pay Day, the Equal Pay International Coalition (EPIC) shared a press release about the need for organizations to prioritize pay equity during the COVID-19 recovery period. EPIC stated in their press release, “Women comprise 70 percent of the global health workforce and have been on the frontlines as essential workers, community leaders, care-givers and social workers. Women in the workforce have been disproportionately impacted in the short-term economic fallout of COVID-19.” During the first International Equal Pay Day event held at the United Nations headquarters in New York, global leaders made commitments to implement affirmative measures that will narrow the gender pay gap. The press release stated that EPIC called on governments, employers, workers and their organizations, the private sector, civil society and academia to ensure that integrated policy responses are aimed at mitigating job and income losses, and to ensure that women do not end up disproportionately shouldering job losses and reductions in incomes resulting from the pandemic.
LIVING WAGE AND PAY COMPRESSION
From our experience working with clients and based on recent SHRM and WorldatWork articles, we believe that the “Living Wage” and related pay compression issues will be active compensation decisions during 2021 and subsequent years. We worked with an organization this year that has about 1,300 employees and the President committed to pay a minimum “Living Wage” of $30,000 or $14.42 per hour for all employees below this level of pay. This commitment by the organization’s President impacted approximately 41% of the total employee workforce and it produced a 17% base pay budget increase. A plan to address resulting pay compression due to the Living Wage decision encompassed about 44% of the organization’s employees. The pay compression adjustment expanded the base pay annual budget by an additional 2.6%. The combined living wage and pay compression adjustment represents an 8.3% increase in the organization’s base pay budget and had an impact on 85% of the total workforce. This is a significant investment for this organization, but the ability to attract and retain competent employees will improve with this important and timely compensation decision.
On September 18, 2020, Dacona Smith, Chief Operating Officer of Walmart U.S. made public a company decision to raise pay for 165,000 associates. The press release mentioned that hourly pay for numerous jobs would increase from $11 to $15. An internet search on October 21, 2020 for a Walmart Order-Picker shows a national hourly pay average of $20.20. Several of the larger online retailers and retail big box stores inclusive of Amazon, Costco, Sam’s, Target and Whole Foods are paying between $12 and $20 per hour for store and warehouse positions.
COVID-19 Impact on Living Wage and Pay Compression
There is no doubt that COVID-19 safety precautions have changed our daily lives and they will continue to influence the way consumers shop, receive and pickup groceries and other goods from local, regional and national retailers. Consumers are warming up to or accepting self-service check-out stations, online ordering and pick-up parking lot spaces, home delivery, fast food order and drive-through lanes, call-in and take-out options with national fast food chains and local restaurants and numerous indoor and outdoor retail ordering and receiving options based on COVID-19 pandemic safety considerations. New and more responsible employee positions are increasing as a result of the pandemic. We believe that the rebounding economy along with natural demand and supply economic factors will drive current low-end hourly wages toward a living wage or as Ben and Jerry’s calls it, a “Liveable” wage which, by the way, averages $18.13 for their national company.
COMPENSATION FOR REMOTE WORKERS
During the past few months we have responded to client inquiries about pay differentiation for remote home workers now that the COVID-19 pandemic is showing signs of not letting-up in the United States. Several articles by SHRM, WorldatWork and national and international human capital consulting firms have affirmed the great migration from company/organization office-based work to home office or remote site work via an internet connection. Some organizations have 100% of their employees working remotely with national averages above 50% based on recent surveys and related published articles. The consideration for pay differentiation associated with remote worker seems to be focused mainly in high cost of living or high wage metropolitan areas like San Francisco, New York, Los Angeles, and Chicago. It makes sense that remote work wage discussions would surface in these very expensive work and cost of living metro areas where the cost of housing can decrease considerably by living 15 to 35 miles outside of the city center district.
COVID-19 Impact on Compensation for Remote Workers
The COVID-19 pandemic-forced remote work decision has proven to be productive for most organizations but it has not been accepted as a long-term strategy or acceptable practice by employers and employees. The employers are worried about employee engagement and lost productivity associated with remote work distractions and employees are missing in-person team relations and onsite meetings. Questions about remote worker compensation have fostered responses that include discussions on 1) each employee’s value to the company whether working onsite or from a remote location, 2) the cost of living and/or labor expense between the metro area located office or the employee’s remote location, 3) the employer’s savings or additional expense for an onsite or remote workforce and 4) other tangible and intangible factors associated with in-office or remote workforce.
Bruce and I agree with the general consensus of the professionals who have stated that reducing compensation for remote workers increases the risk for employee turnover and disengagement. Most of the professional consultants have said that the reduction in remote work pay is not worth the increased risk of turnover. Increasing bonus pay for greater productivity by thriving remote workers should generate a better return on investment as opposed to a decrease in pay for remote workers.
NEW POSITIONS RELATED TO VIRTUAL INTERNET MEETINGS AND EVENTS
The COVID-19 pandemic has definitely had an unfathomably negative social and economic impact on in-person meetings, events, conferences, concerts, plays, and other indoor and outdoor group activities. Implementation of federal and state severe public health emergency measures in order to reduce the spreading of this deadly virus through social distancing, donning of facial masks in public, self-imposed or government influenced remote work and schooling and other forms of anti-virus spreading efforts have placed an unimaginable demand on national and international internet usage and band width. This represents a significant economic shift from associated travel, lodging and meeting venue expenses for onsite meeting versus the transition to virtual intranet and internet meetings, conferences and events.
A new category of positions related to virtual intranet and internet meeting and events are increasing at a rapid pace based on workplace and non-workplace needs. New internet related positions inclusive of Internet Meeting Master Facilitator, Virtual Event Producer, Virtual Meeting/Event Moderator/Emcee and Intranet Moderator and Enablement Specialist are some of the position openings advertised on Indeed, Monster, and ZipRecruiter websites. We believe that these positions will be around for the foreseeable future, but the jury is still out on how soon and to what level we will return to our past habits associated with local, regional, national and international in-person meetings, conferences and events and the related travel, lodging and food complimentary services.
The COVID-19 Pandemic is a reminder of how quickly our world and lives can be changed by a deadly virus outbreak. The world and its global marketplace have been disrupted during most of 2020. As we close 2020, and look forward to 2021, we will remember 2020 as the pivotal year that changed us individually and corporately forever.
