Stay Vigilant, CFOs: Your Compensation Strategy Matters More Than Ever

https://www.forbes.com/sites/paulmcdonald/2022/06/15/stay-vigilant-cfos-your-compensation-strategy-matters-more-than-ever/?sh=697b638f18f7

There’s been some speculation in the news lately that wage growth in the United States might be topping out. This could be the case for some employers, especially smaller companies that don’t have much more give in their current staffing budget. However, don’t think for a moment that compensation is suddenly losing its power as a tool to help secure top talent in a market where unemployment is low, the quits rate is high, and there are nearly twice as many open jobs as there are available workers.

The suggestion that employers are becoming more conservative in their salary offers also might be hopeful thinking for those trying to control rising inflation. Federal Reserve Chair Jerome Powell, for example, recently referred to the labor market as “unsustainably hot.”

While some big companies may be considering cooling down on hiring, some are paying higher wages to median-salaried employees than they did before the pandemic. (Significantly so, in some cases — think six figures.) And although the U.S. economy has seen some job-shedding in recent months, layoffs overall are at their lowest level on record.

The takeaway for chief financial officers (CFOs) is that you can’t afford to sit back and wait on wages. You can never really be sure when or if it will “top out,” especially in this unusual economy and candidate-driven hiring market. Your business needs to be prepared to provide standout compensation packages to hire stellar candidates — and keep your best people, too.

Compensation remains the not-so-secret weapon for besting competitors targeting the same talent, including the high performers who are already part of your organization. The trick is to use compensation as an offensive strategy that gives you more control. Following are three ways to help your organization make that pivot:

1. Review Current Employees’ Compensation Levels Now

While its name has been overexposed in the media, the Great Resignation is real and still in motion. Some are even referring to the phenomenon now as the “Forever Resignation”— a cycle of voluntary turnover that may never end. Buzzy labels aside, the pandemic has fundamentally changed the way people look at work, and what it means to them. They aren’t as willing to put up with things they don’t like about their job — like a low rate of pay. They know they have options, and they will seek them out.

Nearly two-thirds of U.S. workers who left their jobs in 2021 cited insufficient compensation as a reason for quitting, according to a Pew Research Center survey. To avoid turning your company’s valued staff into part of the “Class of 2022,” don’t wait for them to ask for a raise. Make sure to review their current compensation and if needed, bump it up, or extend another financial perk, like a spot bonus or paid time off.

And, if you find that employees are beating you to the punch, encourage an open discussion about pay. For example, if this person’s job responsibilities recently expanded or they’ve gained new skills, an immediate raise (or the promise of one soon) may be in order. If the employee is just feeling the crunch from inflation, offering a flexible work arrangement to reduce the burden of a costly commute might be an alternative solution for in-office workers.

2. Designate an Expert to Oversee the Compensation Process

In addition to taking stock of staff compensation levels as soon as possible, consider putting a formal process in place to ensure these levels will be monitored and adjusted proactively.

Compensation analysis will require, among other things, keeping tabs on the latest salary research and market trends, analyzing and updating job descriptions, and setting pay ranges and communicating them to staff. Look for someone in your human resources organization who could take the lead on managing this critical process. Because the market has changed so fast, it’s critical to keep continual tabs on what’s happening with pay rates and hiring dynamics for your company’s most mission-critical roles.

3. Watch Out for Pay Compression

The need to pay higher salaries to top candidates is in many cases resulting in new hires earning more than existing staff. Even small differences in pay between employees who are performing the same job, regardless of their skills or experience, can turn into big staffing headaches — namely, turnover. Feelings of resentment and disengagement can especially rise in the workforce when new hires with less experience are paid the same as, or more than, tenured employees in the same positions, or when individual contributors are paid more than their managers.

Inflation, competition for in-demand talent and the company’s failure to keep up with current market rates for compensation can all lead to pay compression. Conducting regular pay audits as described above and quickly bringing up the base salary of underpaid employees are solutions for resolving and, ideally, preventing, pay compression.

When raises aren’t an option, consider offering compelling non-monetary perks such as upskilling opportunities, better benefits, health and wellness programs, a more welcoming corporate culture, or all of the above.

That said, you can be sure that, no matter what, leading employers will continue to pay salaries that will attract the top talent they need to drive innovation and stay competitive.

More Americans are quitting — and job openings hit record high

Across industries, 4.54 million Americans quit or changed jobs in March, the highest level since December 2000, according to seasonally adjusted data released May 3 by the Bureau of Labor Statistics.

The count is up from 4.38 million in February. In the healthcare and social assistance sector, 542,000 Americans left their jobs in March, compared to 561,000 the previous month, according to the bureau.

The number of job openings in the U.S. also hit a record high of 11.55 million in March, up from 11.34 million in February, according to the bureau. Job openings in the healthcare and social assistance sector remained similar in February and March, at around 2 million.

During the pandemic, hospital CEOs are among those who have joined the list of workers quitting. Additionally, older, tenured employees in America are part of the trend.

Although there continues to be churn in the labor market, Fitch Ratings projects the U.S. labor market will recover jobs lost during the pandemic by the end of August.

Snapshot Analysis Shows ‘Unprecedented’ Decline in RN Workforce

https://www.medpagetoday.com/nursing/nursing/98372?fbclid=IwAR0OCJM60DEXvvSlP48nqYbh7jIynIq0CrPNAB6rsFztxNQyb7oAyXnKOzc

The number of registered nurses plunged by 100,000 in 2021, representing the steepest drop in the RN workforce in 4 decades, according to a new analysis.

From 2019 to 2021, the total workforce size declined by 1.8%, including a 4% drop in the number of RNs under the age of 35, a 0.5% drop in the number of those ages 35 to 49, and a 1.0% drop in the number of those over 50, reported David Auerbach, PhD, of the Center for Interdisciplinary Health Workforce Studies at Montana State University College of Nursing, and colleagues in Health Affairs Forefront.

“The numbers really are unprecedented,” Auerbach told MedPage Today.

“But … given all that we’ve been hearing about burnout, retirement, job switching, and shifting,” and all of the ways the pandemic disrupted the labor market, including healthcare, “I am not super surprised either,” he added.

While Auerbach said he and his co-authors can’t definitively say what caused this shift, he does not think it’s merely a problem of “entry and education” — in other words, fewer people choosing nursing as a career.

There have been no “major changes” in the enrollment and graduation rates reported by the American Association of Colleges of Nursing (AACN), and the number of RNs completing the National Council Licensure Examination actually increased in 2020 versus 2019, according to the National Council of State Boards of Nursing, Auerbach said.

This suggests that the decline in younger RNs is more likely due to nurses “either pausing or leaving nursing. What we really don’t know is whether this is a temporary or more permanent phenomenon,” he added.

The overall decline was not spread evenly across sites, but instead was “entirely due” to a 3.9% reduction in hospital employment, offset by a 1.6% increase in nursing employment in other settings, the authors said.

For decades, the RN workforce grew steadily, from 1 million nurses in 1982 to 3.2 million in 2020. Though the profession saw a rocky period in the late 1990s, during which growth looked less certain, millennials reversed this temporary downward trend in the early 2000s, Auerbach and team explained.

In a prior Health Affairs analysis, Auerbach and colleagues found that the labor market for nurses had “plateaued” during the first 15 months of the pandemic.

Auerbach’s team had previously projected that the supply of nurses would grow 4.4% from 2019 to 2021.

The data may reflect a mix of RNs leaving “outright” and those shifting to non-hospital jobs. The authors were unable to follow the same people from pre-pandemic to now, Auerbach noted. “Based on taking a snapshot of the world in 2019 and then taking another snapshot of the world in 2021, we’re inferring from what we see what we think might have happened.”

Auerbach said that he and his colleagues are close to ruling out childcare problems as a core reason for younger nurses departing. “We didn’t see some huge reduction in nurses with kids at home,” he explained.

However, if that had been the case, then the decline might be seen as something temporary that could be “ironed out,” compared to more deeply rooted structural problems, like poor working conditions, he said.

Auerbach and colleagues stressed that more needs to be done to help early-career nurses who have endured a “trial by fire” during the pandemic, and that “more effective strategies” must be leveraged to reward nurses who have stayed on the front lines and to bring back those who have left.

On a hopeful note, Auerbach pointed to recent AACN data, which showed a “big jump” in the number of applications to nursing schools. Additionally, prior research found that “times of natural disaster or health crisis could increase interest in RN careers,” the authors noted.

“That doesn’t sound like people are just going to abandon nursing altogether,” Auerbach said.

Viewpoint: It’s the Great Aspiration, not Resignation

Those who left their jobs during the Great Resignation did so out of more than just frustration, but instead used it as an opportunity to follow their dreams and aspirations, writes Whitney Johnson, CEO of Disruption Advisors, a talent development company, in the Harvard Business Review April 6.

The pandemic forced many people to reevaluate many facets of their lives, from where to live to how to spend more time with family. Ms. Johnson argues that workers’ thoughts on changing the way they work is a good thing, giving workers agency to discover new aspirations and proactively seek them. 

“The Great Resignation appellation is, I believe, mistaken. Most workers are not simply quitting. They are following a dream refined in pandemic adversity. They are aspiring to grow in the ways most important to them,” she writes.

Even for those who have been forced out of the workforce, like working mothers and caregivers, Ms. Johnson argues that it will lead to a boom of innovative new businesses, created by those resourceful workers who find another way to work outside the realms of traditional industry. 

She also states that this “great aspiration” is beneficial for employers too, who can make the most of a fresh pool of talent, full of newly motivated employees who are dedicated and searching for meaning. 

Hospital CEOs are joining the Great Resignation

The number of departing hospital CEOs is on the rise as C-level executives are grappling with challenges tied to the COVID-19 pandemic. 

Twelve hospital CEOs exited their roles in January, double the number who stepped down from their positions in the same month a year earlier, according to a report from Challenger, Gray & Christmas, an executive outplacement and coaching firm. 

While some hospital and health system CEOs are retiring, others are stepping down from their posts into C-level roles at other organizations. At least eight hospital and health system CEOs have stepped down from their positions since mid-February. 

The increase in CEO departures isn’t unique to healthcare. More than 100 CEOs of U.S.-based companies left their posts in January, up from 89 in the same month a year earlier, according to the Challenger, Gray & Christmas report.  

The uptick in executive exits shouldn’t be surprising given the challenges presented by the COVID-19 pandemic, experts told NBC News. CEOs and other executives aren’t immune to the pressures that are prompting people to leave their jobs.

It’s many factors — the burnout, the pandemic, the school closures, the need to take stock of life,” Julia Pollack, chief economist at ZipRecruiter, told NBC News in January. “It’s a whole wide range of shocks.”

Nursing home staff shortages are worsening problems at overwhelmed hospitals

https://www.washingtonpost.com/health/2021/12/28/nursing-home-hospital-staff-shortages/

Nursing home staff shortages are worsening problems at overwhelmed hospitals  - The Washington Post

At the 390-bed Terrace View nursing home on the east side of Buffalo, 22 beds are shut down. There isn’t enough staff to care for a full house, safely or legally.

That means some fully recovered patients in the adjacent Erie County Medical Center must stay in their hospital rooms, waiting for a bed in the nursing home. Which means some patients in the emergency department, who should be admitted to the hospital, must stay there until a hospital bed opens up. The emergency department becomes stretched so thin that 10 to 20 percent of arrivals leave without seeing a caregiver — after an average wait of six to eight hours, according to the hospital’s data.

“We used to get upset when our ‘left without being seen’ went above 3 percent,” said Thomas Quatroche, president and chief executive of the Erie County Medical Center Corp., which runs the 590-bed public safety net hospital.

Nursing home bed and staff shortages were problems in the United States before the coronavirus pandemic. But the departure of 425,000 employees over the past two years has narrowed the bottleneck at nursing homes and other long-term care facilities at the same time that acute care hospitals are facing unending demand for services due to a persistent pandemic and staff shortages of their own.

With the omicron variant raising fears of even more hospitalizations, the problems faced by nursing homes are taking on even more importance. Several states have sent National Guard members to help with caregiving and other chores.

Hospitalizations, which peaked at higher than 142,000 in January, are rising again as well, reaching more than 71,000 nationally on Thursday, according to data tracked by The Washington Post. In some places, there is little room left in hospitals or ICUs.

About 58 percent of the nation’s 14,000 nursing homes are limiting admissions, according to a voluntary survey conducted by the American Health Care Association, which represents them. According to the U.S. Bureau of Labor Statistics, 425,000 employees, many of them low-paid certified nursing assistants who are the backbone of the nursing home workforce, have left since February 2020.

“What we’re seeing on the hospital side is a reflection of that,” said Rob Shipp, vice president for population health and clinical affairs at the Hospital Association of Pennsylvania, which represents medical providers in that state. The backups are not just for traditional medical inpatients ready for follow-up care, he said, but psychiatric and other patients as well.

A handful of developmentally disabled patients at Erie County Medical Center waited as long as a year for placement in a group setting, Quatroche said. Medical patients recovered from illness and surgery who cannot go home safely may wait days or weeks for a bed, he said.

“I don’t know if everyone understands how serious the situation is,” Quatroche said. “You really don’t know until you need care. And then you know immediately.”

Remarkably, despite the horrific incidents of death and illness in nursing homes at the outset of the pandemic, more staff departures have come during the economic recovery. As restaurants and shops reopened and hiring set records, nursing homes continued to bleed workers, even as residents returned.

Nursing home staff shortages are worsening problems at overwhelmed hospitals  - The Washington Post

Nearly 237,000 workers left during the recovery, data through November show. No other industry suffered anything close to those losses over the same period, according to the Bureau of Labor Statistics.

Workers in the broader health-care industry have been quitting in record numbers for most of the pandemic, plagued by burnout, vulnerability to the coronavirus and poaching by competitors. Low-wage workers tend to quit at the highest rates, Labor Department data show, and nursing home workers are the lowest paid in the health sector, with nonmanagerial earnings averaging between $17.45 an hour for assisted living to $21.19 an hour for skilled nursing facilities, according to the BLS.

Nursing home occupancy fell sharply at the start of the pandemic, but inched back upward in 2021, according to the nonprofit National Investment Center for Seniors Housing and Care. One major force that held it back was worker shortages.

“Operators in the business have said we could admit more patients, but we cannot find the staff to allow that to happen,” said Bill Kauffman, senior principal at the organization.

Shortages have spawned fierce talent wars in the industry, Brookdale Senior Living Chief Executive Officer Cindy Baier said in a recent earnings call. When they don’t have enough workers, restaurants can reduce service hours and hospitals can cut elective surgeries, but nursing homes don’t have the option of eliminating critical services, she said. They must close beds.

“We are in the ‘people taking care of people’ business around-the-clock, 365 days a year,” she said.

Nursing homes tend to gain workers during a recession but can struggle to hire during expansions, according to an analysis of county-level data from the Great Recession recently published in the health care provision and financing journal Inquiry.

Steady income from their resident population and government programs such as Medicaid makes them recession-proof, and their low pay and challenging work conditions mean they’re chronically understaffed, said one of the study’s authors, Indiana University health-care economist Kosali Simon.

When recessions occur, nursing homes go on a hiring spree, filling holes in their staff with qualified workers laid off elsewhere.

“People during a recession may lose their construction jobs or jobs in retail sectors, and then look for entry-level positions at places like nursing homes where there is always demand,” Simon said.

Now, amid the Great Resignation” and the hot job market, the opposite is happening. In sparsely populated areas and regions where pay is lower, the problem is even worse.

The Diakonos Group, which operates 26 nursing homes, assisted-living facilities and group homes in Oklahoma, closed an 84-bed location for seniors with mental health needs in May “simply because we couldn’t staff it any longer,” said Chief Executive Officer Scott Pilgrim. Patients were transferred elsewhere, including Tulsa and Oklahoma City, he said.

The home in rural Medford, which depended entirely on Medicaid payments, “was never easy to staff, but once we started through covid and everything, our staff was just burned out.”

Diakonos boosted certified nursing assistants’ pay from $12 an hour and licensed practical nurses’ pay from $20 an hour, used federal and state assistance to offer bonuses and employed overtime, but workers kept leaving for better health-care jobs and positions in other industries, he said.

“I’ve never been able to pay what we ought to pay,” Pilgrim said. Eventually he began to limit admissions and eventually was forced to close.

“The hospitals are backed up,” he said. “They’re trying to find anywhere to send people. We get referrals from states all around us. The hospitals are desperate to find places to send people.”

In south central Pennsylvania, SpiriTrust Lutheran is not filling 61 of its 344 beds in six facilities because of the worker shortage, said Carol Hess, the company’s senior vice president.

“I have nurses who went to become real estate agents,” she said. “They were just burned out.”

Pay raises of $1 to $1.50 an hour and bonuses brought the lowest-paid workers to about $15 an hour, Hess said, and the company is planning a recruiting drive after Jan. 1. But the prognosis is still grim.

“We’re competing with restaurants for our dining team members,” Hess said. “We’re competing with other folks for cleaning and laundry and others.” In the area around Harrisburg where SpiriTrust employees live, some schools that turned out certified nurse assistants closed during the pandemic and haven’t reopened.

The nursing homes have begun borrowing licensed practical nurses from WellSpan Health, the nearby hospital system that discharges many of its patients to SpriTrust after they recover. About 15 have began their orientations this month, she said, and the two systems are collaborating to pay them.

The bed shortage is causing backups that can average several days in the hospital, said Michael Seim, the hospital system’s chief quality officer. That gives the hospitals an interest in helping any way they can, he said.

“We have between 80 and 100 patients waiting for some type of skilled care,” Seim said this month. The hospital has begun caring for more people at home, enrolling 400 people so far in a program that sends clinicians to check on them there. More than 90 percent have said they are happy with the program.

“I think the future of hospital-based care is partnerships,” Seim said. “It’s going to be health systems partnering across their service areas … to disrupt the model we have.”

New jobless claims totaled 184,000 last week, reaching lowest since 1969

https://finance.yahoo.com/news/weekly-unemployment-claims-week-ended-dec-4-2021-192034644.html

Weekly U.S. jobless claims fell to 184,000, lowest level since 1969

New initial jobless claims improved much more than expected last week to reach the lowest level in more than five decades, further pointing to the tightness of the present labor market as many employers seek to retain workers. 

The Labor Department released its weekly jobless claims report on Thursday. Here were the main metrics from the print, compared to consensus estimates compiled by Bloomberg:

  • Initial unemployment claims, week ended Dec. 4: 184,000 vs. 220,000 expected and an upwardly revised 227,000 during prior week 
  • Continuing claims, week ended Nov. 27: 1.992 million vs. 1.910 million expected and a downwardly revised 1.954 million during prior week

Jobless claims decreased once more after a brief tick higher in late November. At 184,000, initial jobless claims were at their lowest level since Sept. 1969. 

“The consensus always looked a bit timid, in light of the behavior of unadjusted claims in the week after Thanksgiving in previous years when the holiday fell on the 25th, but the drop this time was much bigger than in those years, and bigger than implied by the recent trend,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in an email Thursday morning. “A correction next week seems likely, but the trend in claims clearly is falling rapidly, reflecting the extreme tightness of the labor market and the rebound in GDP growth now underway.”

After more than a year-and-a-half of the COVID-19 pandemic in the U.S., jobless claims have begun to hover below even their pre-pandemic levels. New claims were averaging about 220,000 per week throughout 2019. At the height of the pandemic and stay-in-place restrictions, new claims had come in at more than 6.1 million during the week ended April 3, 2020. 

Continuing claims, which track the number of those still receiving unemployment benefits via regular state programs, have also come down sharply from pandemic-era highs, and held below 2 million last week. 

“Beyond weekly moves, the overall trend in filings remains downward and confirms that businesses facing labor shortages are holding onto workers,” wrote Rubeela Farooqi, chief U.S. economist for High Frequency Economics, in a note on Wednesday. 

Farooqi added, however, that “the decline in layoffs is not translating into faster job growth on a consistent basis, which was evident in a modest gain in non-farm payrolls in November.” 

“For now, labor supply remains constrained and will likely continue to see pandemic effects as the health backdrop and a lack of safe and affordable child care keeps people out of the workforce,” she added. 

Other recent data on the labor market have also affirmed these lingering pressures. The November jobs report released from the Labor Department last Friday reflected a smaller number of jobs returned than expected last month, with payrolls growing by the least since December 2020 at just 210,000. And the labor force participation rate came in at 61.8%, still coming in markedly below its pre-pandemic February 2020 level of 63.3%. 

And meanwhile, the Labor Department on Wednesday reported that job openings rose more than expected in October to top 11 million, coming in just marginally below July’s all-time high of nearly 11.1 million. The quits rate eased slightly to 2.8% from September’s record 3.0% rate. 

“There is a massive shortage of labor out there in the country that couldn’t come at a worst time now that employers need workers like they have never needed them before. This is a permanent upward demand shift in the economy that won’t be alleviated by companies offering greater incentives to their new hires,” Chris Rupkey, FWDBONDS chief economist, wrote in a note Wednesday. “Wage inflation will continue to keep inflation running hot as businesses fall all over themselves in a bidding war for talent.”

Signs of a High-Trust Environment

In the era of great awakening, leaders have to step up and be conscious about building trust with people they work with.

The old rules and hierarchies, that were already becoming obsolete, have now been thrown out of the window. People look for integration of work and well-being knowing that work is what you do, not a place you go to.

Opportunities are abound and excellent people have ample choices (they always had). It is high time that organizations and leaders think this through carefully to first align their own mindset to this new reality and then take conscious actions to build teams, practices and processes that are not just high-performing but also have a strong fabric of trust woven in.

Employees, after all, are volunteers who exercise their choice of working with you. Effective leadership is about making it worth for them.

Building high-trust environment means putting the human back at the center of how a business functions and building everything – purpose, culture, processes, structures, rituals, systems, tools and mindsets – around it.

How would we know if we are working in an environment where we can trust others and that we are trusted? We can always answer this based on our intrinsic feeling but if you are a leader who is working hard to build trust, here are a few vital signs that you need to look for.

The Great Resignation has burdened those left behind 

Forbes India - Jobs: What Is Fuelling The Great Resignation In America?

The workers who have stayed on at their jobs amid the Great Resignation are struggling to fill the gaps left by former colleagues, CNBC reported Nov. 2. 

The effects of the Great Resignation continue to be felt by companies after a record high of 4.3 million workers quit their jobs in August alone. The workers who remained in their roles, though, are struggling with their new increased workload.

A report by the Society for Human Resource Management that surveyed 1,150 employed Americans in July as well as 220 executives illuminated some of the challenges of the workers who stayed. 

It found that 52 percent of workers who stayed with their companies have taken on more responsibilities, with 30 percent of remaining employees stating they struggle to complete necessary tasks. A majority of workers are questioning whether their pay is high enough, and 27 percent feel less loyalty to their company. 

This worker dissatisfaction opens up a vicious cycle, Johnny Taylor Jr., president and CEO of the Society for Human Resource Management, told CNBC.

“The employees who remain now say, ‘I’m working too hard, I don’t have balance in my life, etc.’ And so then they want to leave and thus a vicious cycle continues” Mr. Taylor told CNBC

Thus, it’s more important now than ever for employers to exercise empathy and listen to what their employees are experiencing in the wake of workplace shifts. 

“Invest in them today,” Alex Durand, a career transition and leadership coach, told CNBC. “Show them you care before they tell you they are leaving.”