Thank you for your interest in WorldatWork articles and publications. To order full copies of WorldatWork publications, please contact WorldatWork Customer Relationship Services or call 877-951-9191 (United States and Canada) or +1 480-922-2020 (other countries).
When talking about gender equality in the workplace, there is one area that often comes up: maternity and parental leave.
Women account for at least 40% of the global workforce and 47% of the workforce in the United States, so the issue of maternity leave is big, especially as it pertains to earnings. For example, one study by the National Bureau of Economic Research noted that high-skilled, childbearing women in the U.S. lose as much as $230,000 in wages over their lifetime, as compared to high-skilled women without children. By comparison, there appears to be no loss of wages for men.
And while many countries have moved to adopt maternity and/or parental leave programs, all are not created equal. European countries, for instance, tend to have more progressive programs implemented than some of their Western peers.
Here’s a quick look at some maternity leave programs around the world:
- Each parent receives 240 days of paid parental leave at 80% of their pay.
- One parent can extend their leave for another 90 days, also paid at 80%.
- Parents also have the right to reduce their hours by up to 25% until the child turns eight years old, though they would only be paid for the time worked.
- Parental leave is granted for 49 weeks at 100% of pay or 59 weeks at 80% of pay.
- Mothers receive 20 weeks of maternity leave at 100% of pay.
- An additional year of leave can be granted, though the rate of pay is a sliding scale:
- First 26 weeks: 100%
- Weeks 27 to 39: 60%
- Weeks 40 to 52: 30%
- Paid maternity leave was recently extended to 105 days from six weeks.
- Single working mothers can receive an additional 15 days paid.
- Of the 105 days allowed to mothers, seven days can be transferred to fathers.
- Fathers have seven days of paid paternity leave, 14 if they receive seven from the mother’s leave.
- The primary caregiver of the newborn or adopted child receives 18 weeks of paid leave. However, they are paid at the national minimum wage.
- Under the Family and Medical Leave Act (FMLA), women can receive up to 12 weeks of parental leave. However, it does not guarantee they will be paid.
Global DC Pension Assets Pass DB Assets for First Time
Global institutional pension fund assets in the 22 major markets (P22) dipped in 2018.
This is according to the latest figures in the Global Pension Assets Study conducted by Willis Towers Watson’s Thinking Ahead Institute. The assets fell to $40.1 trillion at year end, which represents a decrease of 3.3% in the 12-month period.
The seven largest markets for pension assets (P7) — Australia, Canada, Japan, the Netherlands, Switzerland, the United Kingdom and the United States — account for 91% of the P22. The U.S. continues to be the largest pension market, representing 61.5% of worldwide pension assets, followed by Japan and the UK, with 7.7% and 7.1%, respectively.
Notably, the report found that defined contribution (DC) assets account for more than 50% of total assets across the seven largest pension markets, for the first time. This continues the trend of DC growing at a faster pace over the past 10 years, with DC assets growing by 8.9%, while defined benefit (DB) assets have grown by 4.6% during the same period.
The average asset allocation of the P7 is 40% equities, 31% bonds, 26% other assets and 3% cash. This marks a decrease of 20% in equity allocations over the past 20 years, while allocations to other assets, such as real estate and other alternatives, have increased by 19%.
Australia and the U.S. continued to have above average equity allocations, with 47% and 43%, respectively. Meanwhile, the Netherlands, UK and Japan have above average exposure to bonds, and Switzerland has the most even allocations across equities, bonds and other assets.
“Pension funds continue to face a range of issues over the next five to 10 years,” said Roger Urwin, global head of investment content at the Thinking Ahead Institute. “These include the shifting focus in pension design toward a DC model; the growing impact of evolved regulations; and further integration of ESG, stewardship and long-horizon investing
Evolving Jobs Complicating Matters for Hiring Managers
The dynamics of business are forcing HR professionals to predict the future while hiring for a current position. A global survey by Korn Ferry found that 57% of more than 600 HR respondents have hired for a specific skill set even if there is not an existing role for the candidate. More than three-quarters (77%) said they are hiring for roles today that didn’t exist a year ago.
“While technological advances are creating new roles in areas such as data analytics and artificial intelligence, other trends, such as an enhanced focus on the customer experience journey, are putting a premium on different skill sets,” said Jacob Zabkowicz, Korn Ferry global vice president and general manager, Recruitment Process Outsourcing. “Businesses increasingly understand that the rapid pace of change means that to thrive in the future, they will need access to skills and expertise that don’t necessarily fit within existing job descriptions.”
The speed of transformation has also meant that 67% of respondents said they have had to lay off people whose roles no longer fit into the organization’s direction.
According to the survey, looking into current employees’ potential is one approach to finding the right talent for emerging roles. Nearly two-thirds (61%) said they invest more on upskilling existing talent than recruiting externally, and nearly half (47%) said they have formal retraining programs for workers whose jobs have changed.
“With the labor market as tight as it has been in decades, it’s critical that employers look inside their own walls to find talented people who could be trained to meet the evolving needs of the organization, today and well into the future,” Zabkowicz said.
Recruiters Feel Need to Embrace Digital Transformation
Recruitment professionals feel an increasing need to embrace digital transformation to remain competitive.
Bullhorn’s 2019 “Global Recruitment Insights and Data” research found that 84% of the almost 2,200 recruitment professionals surveyed feel this way. 55% of respondents believe that artificial intelligence (AI) — one aspect of the digital transformation journey — will help candidate and customer engagement.
While professionals see digital transformation as an opportunity, they also acknowledge it as a challenge: 49% of them rank embracing digital transformation to improve operations as their top operational hurdle, ahead of pricing pressure and margin compression (44%) and increased competition from freelance and gig platforms (27%).
Bullhorn’s research also illuminates overall optimism for 2019, despite persistent concerns and challenges related to tight talent pools, candidate-driven market and economic conditions, and macroeconomics and politics. 79% of respondents expect revenue to increase this year.
61% of the responding recruitment professionals said sourcing and acquiring candidates (61%) is the top priority for 2019, followed by engaging candidates and improving the candidate experience (36%). Top challenges include: tight talent pools and skills shortages and gaps (73%), accelerating pay increases due to candidate-driven market and economic conditions (38%) and higher churn rates due to low unemployment (27%).
Other key findings include:
- Reskilling Workers to Combat Talent Shortages. 74% of global recruitment professionals believe that reskilling workers represents an effective strategy to combat perennial skills shortages because that training helps to create new talent pools, fill key roles and transform lives.
- Understanding the Skills Gap. When asked if skills shortages in certain sectors are better or worse now compared to five years ago, more than half (55%) said they are getting worse.
- Views on Diversity in Recruitment. 59% of professionals agree that diverse organizations are more effective than less diverse organizations.
- Expediting Pay Increases Due to Candidate-Driven Market and Economic Conditions.: 78% of professionals agree that employers must accelerate pay increases in order to compete for qualified candidates, and nearly 40% said it is one of their top challenges for the year ahead.
- Working with Online Talent Platforms — Or Not. 60% of respondents do not have an opinion about whether online talent platforms will be more helpful or harmful in recruiting talent. 26% of professionals think they will be more helpful and 14% think they will be more harmful.
- Navigating the Unpredictable Global Economy. Less than half of professionals said they worry about the uncertain economy and its future growth, though only about a third say they agonize about low unemployment rates. 29% said they stress about local and national legislative changes.
- Focusing on People to Achieve Future Firm Growth. The single biggest issue affecting an agency’s ability to achieve its future growth goals is people. Respondents overwhelmingly say finding quality candidates, working with the right clients and hiring the right staff matters the most for their businesses to flourish in 2019.
“While firms will face another year filled with an unpredictable macroeconomic and political environment, most are confident in their ability to navigate through these challenges as they continue their journey of digital transformation to drive business growth,” said Gordon Burnes, Bullhorn’s chief marketing officer. “Now that most professionals have automated formerly manual workflows, they are beginning to explore artificial intelligence to drive increased productivity to set them up for success in the years ahead.”
Changes Abound for UK Benefits
Amid a highly-competitive labor market, there could be a shift in the benefits United Kingdom employers provide.
This is according to Gallagher's Benefits Strategy & Benchmarking Survey, which found that 45% of the more than 170 U.K.-based HR practitioners surveyed are planning to make changes to their benefits package. The survey shows an increasing number of organizations are fully aware of the measurable impact that benefits have on employee engagement and productivity.
Among HR practitioners planning changes, 72% are seeking to enhance benefits in hopes of improving their employer brand and becoming more competitive in recruitment. The second most popular planned change is improving flexibility in benefits, with 47% attempting to bolster flexible options to extend individual choice.
“While cost is always central to business performance, we are seeing a shift in the market as employers are having to compete for talent in a very diverse workforce,” said Leslie Lemenager, President of Gallagher's International Employee Benefits Consulting and Brokerage. “The fact that 47% of organizations are aiming to enhance flexibility in benefits provisions — despite cost management being their biggest challenge — points to a strong recognition that there is a need to go above and beyond to attract and retain talent.”
Other key findings:
- More than half of respondents (52%) reported that it is difficult to adequately benchmark their benefits offering against the market.
- Employers have been largely receptive to flexible working: 91% offer part-time work or shorter hours, and 69% said they allow workers to personalize their hours within certain parameters.
- 52% of organizations do not allow employees to work from home (i.e., teleworking or telecommuting). Furthermore, other benefits that suit a diverse workforce are uncommon: 43% offer a condensed working week; just 24% offer agile working; and a scant 14% offer term-time only working.
- WorldatWork’s 2018 Inventory of Total Rewards Programs & Practices survey found that 78% of U.S. companies offer telework.
- More than one-third of organizations (36%) identified communications as a barrier to effective benefits, making it the fourth-most commonly cited challenge.
- 84% of organizations do not use total reward statements to communicate the value of their benefits package. Of those using total reward statements, 77% send these communications digitally.
Productivity and Four-day Workweeks Mix Well, New Zealand Firm Finds
Four-day workweeks are not a new idea. But overall, companies have been hesitant to formally adopt the concept, due mainly to concerns about productivity.
One New Zealand financial services company, Perpetual Guardian, decided to test the idea to find out if those concerns were on point. Working with The University of Auckland and Auckland University of Technology, the company did an eight-week trial in which employees worked 30 hours instead of the traditional 37.5 — a tad less than the typical 40-hour workweeks in the United States. The results showed that productivity was the same, if not slightly better. The company also found that employee engagement increased, particularly in the areas of commitment and empowerment.
Furthermore, employees reported an increased sense of work-life effectiveness. Post-trial, 78% said they were better able to juggle the responsibilities of work and home on the shortened week, versus the 54% who gave the same answer prior to the trial. The short week also appeared to have a positive impact on overall stress levels, falling to 38% from 45%.
In response to the positive feedback Perpetual Guardian received, the company decided to formally implement the four-day week on Nov. 1, 2018. However, the company also decided to let each employee decide if they would continue on with the short week, making it an optional program.
According to a report from The Guardian, Perpetual Guardian has received more than 350 requests from companies across the globe, all looking for more information on how they might follow suit. Most came from the United Kingdom, though Australia, the U.S. and Germany were also at the top.
The UK’s interest is notable, as the country’s Labour Party has been considering a four-day workweek option.
About the Authors