Demographic Shifts at Workplace and Effective Compensation Strategy

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.Original question-This section discusses important issues that will shape compensation professionals’ work for years to come. Which one of these issues stands to create the greatest uncertainty for compensation professionals? Explain your answer

Student 1Joshua

There are a number of key issues that will shape compensation professionals in the future including increase in the federal minimum wage, strengthening overtime pay protections, rising wages in China, underemployment and workforce demographic shifts (Martocchio, 2013). All of these issues present uncertainty to the compensation profession; however, workforce demographic shifts present the greatest challenge. The baby boomer generation (individuals born between 1946 and 1955) still make up the largest percent of the workforce. However, millennials (individuals born between 1981 and 2000) are starting to anchor an ever-evolving workplace. In Tajlili and Baker’s (2018) article, they stated many millennial college students expect more flexible work hours, more meaningful work experiences and enrichment outside of the workforce. This is a stark contrast from the baby boomer age group. For this group, work was their life. As newer generations enter the workforce and begin taking leadership roles, this trend will continue to present challenges for compensation professionals trying to weigh these new expectations with salaries. In Bourdeau, Oliver and Houlfort’s (2019) article, they stated a number of organizations are investing money, time and energy into offering formal and in-formal work-life policies. In large part, I think employers recognize and understand this shift in mindset between generations but are struggling with effectively implementing work-life benefits that are acceptable to both the employer and millennials. This is because employers benefited from the dedication of baby boomers. Employers must think outside of the box and implement better work-life balance practices.

Unlike baby boomers, millennials are expected to change occupations an average of six times over their career. This is also a stark contrast from previous generations where “job-hopping” was considered taboo. This presents a challenge to the compensation world because employers are consistently competing with one another to recruit employees. In years past, this was not as big of an issue because it was common for an employee to stay with one employer their entire career. This unofficial contract has eroded due to a shift in demographics.

Many emerging issues will shape compensation professionals for years to come. Issues like increase in the federal minimum wage, strengthening overtime pay protections, rising wages in China, underemployment and workforce demographic shifts are all playing a key role. The greatest of these issue is workforce demographic shifts, and this is an issue that will play a large role for companies in the future.

Student2 Terry

One of the major goals of an effective compensation strategy is to attract and retain quality employees. Compensation can be used as a reward for achieving organizational goals. Compensation is also used to focus on organizational strategies. Compensation strategies must be flexible. Compensation initiatives must be able to address future concerns. Compensation professionals must be able to meet the future demands in an uncertain environment.

The writer believes that workforce demographic changes will be the greatest uncertainty for compensation professionals. When a workforce is made up of similar people, then a benefits program will tend to be more effective for their needs will be the same or similar (Marocchio, 2013). Older workers are not retiring at the same rates they were in past years. A 2014 article in Public Management Review magazine states that populations and workforces are ageing. The public service industry is generally older than broader labor markets (Colley, 2014). This situation makes it harder for younger workers to find jobs and creates an older workforce. Older workers are more concerned with retirement and pension issues. The younger workers in an organization are more concerned with job security, higher wages, and paid time off. The differences in motivations create a challenging environment for compensation professionals.

Millennials are defined by those born between 1980 and later. They are characterized as technologically knowledgeable, better educated, and more ethnically diverse than any other generation. As of 2011, around 15 percent of the country's labor force is said to be accounted for by Millennials. They are also expected to drive future economy as employees and consumers (Bannon, Ford, & Meltzer, 2011). Creating a compensation strategy that both attracts Millennial, and retains an older workforce will be the greatest challenge for compensation professionals.

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12 Compensating the Flexible Workforce Contingent Employees and Flexible Work Schedules Learning Objectives G When you finish studying this chapter, A you should be able to: 12-1. Describe the four groups ofTcontingent workers. 12-2. Discuss pay and benefits issues for contingent workers. E 12-3. Summarize the three categories of flexible work schedules. S 12-4. Discuss the pay and employee benefits issues for flexible work schedules, , telecommuting arrangements. compressed workweeks, and 12-5. Describe unions’ reactions to contingent work and flexible work schedule arrangements. D 12-6. Identify strategic issues andE choices companies have regarding the use of contingent workers. A N D R CHAPTER WARM-UP! If your professor has assigned this,Ago to the Assignments section of mymanagementlab.com to complete the Chapter Warm-Up! and see what you already know. After reading the chapter, you’ll have a chance to take the Chapter Quiz! and see what you’ve learned. 1 1 Changing business conditions and personal preferences for work–life balance have led to an increase in contingent workers and the use of 2 flexible work schedules in the United States. This chapter looks at compensation issues for contingent 3 workers and demonstrates that compensating contingent workers is a complex proposition. Human resource (HR) and compensation professionals encounter T tremendous challenges in managing pay and benefits for these individuals. Many companies employ both types of individuals, often in theS same jobs. To the casual onlooker, including others in the workplace, there are no visible differences; however, HR and compensation professionals must take many factors into consideration. As we will learn in this chapter, compensation professionals should be aware of the differences between core employees and contingent workers and the complexities of compensating contingent workers, particularly, pertaining to the domain of legally required benefits. 12-1 Describe the four groups of contingent workers. 280 The previous chapters addressed compensation issues for core employees. Core employees have full-time jobs or part-time jobs, and they generally plan long-term or indefinite relationships with their employers. In addition, all core employees were assumed to work standard schedules Strategic Compensation: A Human Resource Management Approach, Ninth Edition, by Joseph J. Martocchio. Published by Pearson. Copyright © 2017 by Pearson Education, Inc. ISBN 1-323-59381-0 THE CONTINGENT WORKFORCE  ;    > ?x (i.e., fixed 8-hour work shifts, 5 days per week). Compensation practices differ somewhat for the flexible workforce. According to the U.S. Bureau of Labor Statistics, contingent workers1 are those who do not have an implicit or explicit contract for ongoing employment. Persons who do not expect to continue in their jobs for such personal reasons as retirement or returning to school are not considered contingent workers, provided that they would have the option of continuing in the job were it not for these reasons. Alternatively, some refer to contingent employment as ‘on-demand’ employment.2 This idea relies on job security as the basis for distinguishing between contingent and noncontingent employment. Figure 12-1 details questions that determine whether workers expect their employment to continue, that is, whether their work arrangement is considered to be contingent. Groups of Contingent Workers There are four distinct groups of contingent workers: G A T E PART-TIME EMPLOYEES The Bureau of Labor Statistics defines S a part-time worker as an individual who works fewer than 35 hours per week.3 The Bureau also distinguishes between two kinds of , part-time employees: voluntary and involuntary. A voluntary part-time employee chooses ISBN 1-323-59381-0 š š š š Part-time employees Temporary and on-call employees Leased employee arrangements Independent contractors, freelancers, and consultants to work fewer than 35 hours per regularly scheduled workweek. In some cases, individuals supplement full-time employment with part-time employment D to meet financial obligations. Some workers, including a small but growing number of professionals, elect to work parttime as a lifestyle choice. These part-timers sacrifice pay, E and possibly career advancement, in exchange for more free time to devote to family, hobbies, and A personal interests. They often have working partners or spouses whose benefits, generally including medical and dental insurance, N extend coverage to family members. Involuntary part-time employees work fewer than D 35 hours per week because they are unable to find full-time employment. Involuntary part-time Rwork represents a substantial share of all part-time employment. There is a commonly held but inaccurate stereotype of involuntary A part-time workers as being low skilled and uninterested in career advancement. To the contrary, many involuntary part-time workers hold entry-level career-track jobs.4 Although we have discussed voluntary and involuntary part-time work as part of 1 the contingent workforce, it is important to emphasize that many core workers negotiate part-time schedules with employers. 1 and the number of individuals who Table 12-1 lists the specific reasons for part-time work 2 each reason. The table also shows work part-time, defined as fewer than 35 hours weekly, for those who usually work on a full-time or part-time basis, for 3 economic reasons, the majority of the workers who were employed on a part-time basis because of slack work or business condiT tions, or they could only find part-time work. We can reasonably say that those individuals are probably working part-time on an involuntary basis. Noneconomic reasons explain approxiS mately 80 percent of those who usually work part-time. Most of those workers indicate that they usually work part-time because they are in school or training, are retirees whose Social Security retirement benefit requirements place a limit on additional earnings. The average weekly hours worked for individuals who usually work part-time based on economic reasons was 22.6 hours and 19.8 hours for noneconomic reasons. Companies may experience advantages and disadvantages from employing part-time workers. Flexibility is the key advantage. Most companies realize a substantial cost savings because they offer few or no discretionary benefits. In addition, companies realize cost savings for benefits that are linked to hours worked (e.g., retirement plan contributions). Table 12-2 shows employers’ costs for providing various discretionary benefits and legally required benefits to Strategic Compensation: A Human Resource Management Approach, Ninth Edition, by Joseph J. Martocchio. Published by Pearson. Copyright © 2017 by Pearson Education, Inc. 281 282   N     >>  24       ) 0          0      )4 )   ‹ 74 0    0   )     +ˆ              0‹ ‰ Š ‰ Š Š
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Original question-This section discusses important issues that will shape compensation
professionals’ work for years to come. Which one of these issues stands to create the
greatest uncertainty for compensation professionals? Explain your answer
Student 1Joshua
There are a number of key issues that will shape compensation professionals in the future
including increase in the federal minimum wage, strengthening overtime pay protections,
rising wages in China, underemployment and workforce demographic shifts (Martocchio,
2013). All of these issues present uncertainty to the compensation profession; however,
workforce demographic shifts present the greatest challenge. The baby boomer
generation (individuals born between 1946 and 1955) still make up the largest percent of
the workforce. However, millennials (individuals born between 1981 and 2000) are
starting to anchor an ever-evolving workplace. In Tajlili and Baker’s (2018) article, they
stated many millennial college students expect more flexible work hours, more
meaningful work experiences and enrichment outside of the workforce. This is a stark
contrast from the baby boomer age group. For this group, work was their life. As newer
generations enter the workforce and begin taking leadership roles, this trend will continue
to present challenges for compensation professionals trying to weigh these new
expectations with salaries. In Bourdeau, Oliver and Houlfort’s (2019) article, they stated
a number of organizations are investing money, time and energy into offering formal and
in-formal work-life policies. In larg...


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