According to research by the Pensions Management Institute (PMI), one third of pension professionals believe in employers having more power to renegotiate defined benefit (DB) schemes. During their research the PMI surveyed 235 UK pension consultants, in addition to trustees, administrators, actuarial, legal and investment consultants.
At the PMI’s annual conference the president, Kevin LeGrand, stated that those sponsors wishing to see more flexibility were concerned for the security of members. He said, "This is a big issue that has been debated a lot over the past year or so, particularly in regard to the impact on deficit reduction. Not surprisingly, there was a strong majority for not allowing employers to renegotiate DB pensions and accrued benefits. The implications here are to ensure that members' benefits are properly protected."
There is a reluctance to permit DB pensions reviews and this could be explained by the fear - expressed by 94% surveyed - that unscrupulous employers could set up a state of affairs that would enable them to renegotiate accrued DB benefits and reshape or reduce them.
When asked whether the Government should consider a statutory override to allow schemes to move to a different index - provided that they are still protected against inflation - 55% of pension professionals stated that the Government should be allowed to reassess both the preserved benefits and the indexation of benefits in payment. However, 31% stated that it should not be allowed.
Views were equally divided in response to the question of whether schemes should be allowed to suspend indexation in some circumstances, with 57% of pension professionals against. Of the 43% in favour to suspend indexation, 34% would permit it to keep a stressed scheme out of the PPF and 21% would allow it when funding levels fall below a prearranged threshold.
Kevin LeGrand declared,“Defined benefit pensions are often seen as sacrosanct, therefore renegotiating accrued benefits or reducing them is a very controversial issue. They are all too aware of how introducing a degree of flexibility could open Pandora’s box, leading to various unintended consequences or risks, most notably abuse. However, our survey shows that pension professionals are willing to be pragmatic in extreme situations in order to protect benefits and secure the best outcome possible for members.”
New research findings show that providing financial wellness training and tools was expected to be a key workplace trend for 2017. Forty nine percent of employers offer some type of financial advice - which included providing resource materials or referrals; online assessment; advice tools; group instruction and one-on-one advice with a financial counselor.
The Society for Human Resource Management's (SHRM's) 2017 Employee Benefits survey report - based on a survey of SHRM members conducted earlier this year - found that more organizations are offering financial advice compared to 2016 and to five years ago.
SHRM researcher Tanya Mulvey, the survey project leader said, “"This benefit can help employees improve their financial management skills, plan how to manage debt, and hopefully alleviate stress and worry as a result."
Carla Dearing, CEO of SUM180, an online financial wellness service in Louisville, Kentucky, stated, "We are seeing a big jump in the number of companies saying they intend to offer financial wellness support to their employees," She added, "For those employers that 'get it right,' financial wellness has tremendous potential to drive engagement and retention."
“For one company, financial wellness may be managing day-to-day finances," Carla Dearing said. "For another, it may be providing employees with a comprehensive financial plan that includes tax strategy and estate planning." She then advised that a three point action plan should be followed to “cut through the confusion”. This would incorporate defining financial wellness, reviewing current offerings and determining financial wellness goals.
A recent survey by financial services firm Charles Schwab shows that fifty-nine percent of U.S. and Canadian corporate executives say the best way to structure financial wellness programs is to integrate the offering with the rest of the employee benefits package. When discussing the fact that 37% of employers expressed concern over the potential cost of implementing a financial wellness program, Nate Bidner - managing director of workplace financial solutions at Schwab - said, “.......many of the features typically overlap with those already used by employers." He went on to say, “Today's 401(k) and equity compensation plans are already structured to arm participants with knowledge and encourage active engagement, and as such, these plans may be leveraged to build a financial wellness program without adding cost or significant resource demands. Implementing a financial wellness program doesn't need to be disruptive to existing benefits and compensation programs - it should complement them," and added. "Current programs should be evaluated for their effectiveness in meeting the challenges, whether simple or complex, that employees face. Employers can then incorporate additional elements to help educate employees and enable them to make better use of company offerings."
Other research also shows why these benefits are needed - PricewaterhouseCooper's (PwC's) 2016 Employee Financial Wellness Survey, with responses from 1,600 full-time employees, showed that 52% of workers overall are stressed about their finances - and the younger the worker, the more likely they are to be worried; 46 percent of workers spend three or more hours during the workweek dealing with or thinking about financial issues and 45 percent said their finance-related stress had increased over the last 12 months.
Andrew Brickman - Wayne, Pa. based director of benefits administration at consultancy Corporate Synergies - noted that PwC's survey found that 14% of employers had a budget for financial education and another 25 percent were looking to add budget dollars for these programs. He said, "But as with health and wellness programs, it can be daunting to encourage upper management to allocate dollars for financial education and support programs and then motivate employees to participate once executives give the nod." He added, "How well your plan is designed can impact employee participation."
Andrew Brickman noted that as with most benefits programs, "an effective financial wellness program won't be one-size-fits-all and will depend heavily on the resources made available to it."
According to a recent survey from CareerBuilder, the percentage of US employers that intend to employ college graduates is at a 10 year high. Seventy four percent of employers say they plan to hire recent college graduates this year, which is up from 67 percent last year. Half of those employers plan to offer recent college graduates higher pay than last year and 39 percent of employers hiring recent college graduates will pay a starting salary of $50,000 or more - this compares to 27 percent last year.
Roberto Angelo, CEO and co-founder of AfterCollege, a student and graduate career network based in San Francisco stated, "I'm hearing employers saying that they're not finding the right people so they are turning to new graduates. You can either poach workers-which is hard-or you can go out and recruit them on campus." He added, "Traditionally, large companies have done a really good job of campus recruiting. I'm hearing that small ones are doing better than in the past."
Heidi Soltis-Berner, evolving workforce talent leader and managing director of Deloitte University for consulting firm Deloitte in Westlake, Texas states, "They're bringing new thinking, new ideas and new ways to innovate." She also remarked that, "We're continuing to look at how and when we visit campuses," and added that she has witnessed that the norm for employers is to approach students "earlier and earlier."
Initial indications are that the classes graduating in 2017 comprise the leading edge of Generation Z, who could possibly differ from the Millennials inasmuch as they would be prepared to remain with a new employer for a decade or more and in addition to receiving a sturdy education, many students have demonstrated - by entering internships and co-op programs - that they have work-ready skills.
The Career Builder survey reports that the IT and customer service functions are those that employers most want to staff with new graduates. Top of the list of functions for which employers are looking to recruit recent college graduates are Information technology (33 percent) and customer service jobs (24 percent). Also, there are opportunities in business development (23 percent), finance and accounting (20 percent) and production (18 percent).
According to a previous college graduate employment study by Accenture, four out of five graduates said they considered the availability of jobs in their field of study before deciding on their major and that pragmatism appeared to have paid off.
The Liberal Democrats have announced their plan to introduce mandatory reporting on the ethnicity pay gap for organisations with 250 employees or more.
Jo Swinson, the former Business Minister, commented: “....the country is failing to make the most of talent in the workplace. Information is powerful, and while organisations are allowed to get away with keeping patchy records, we'll never know the full extent of the gap.” She continued: “Transparent data on the Black and Minority Ethnic pay gap will help employers focus on what they need to do to ensure equal opportunities at work for people of all ethnic backgrounds.”
According to a Fawcett Society report, Pakistani and Bangladeshi women see the biggest overall gender pay gap at 26% and Black African women experience the largest full-time gender pay gap at 19.6%. Black African women have seen virtually no progress since the 1990’s in closing the gender pay gap with White British men, with a full-time pay gap of 21.4% in the 1990’s and 19.6% today. When part-time workers are included, this figure rises to 24%.
The report by the Fawcett Society – the UK’s leading charity for women’s equality and rights at home, at work and in public life - monitors the progress over more than 25 years and the analysis reveals real inequalities. As the data is not routinely collected by the Office for National Statistics, it was calculated using the Labour Force Survey.
The report shows that:
- Pakistani and Bangladeshi women experience the largest aggregate (i.e. including full-time and part-time workers) gender pay gap at 26.2%.
- Indian women experience the biggest pay gap with men in their ethnic group at 16.1%.
- White British women have a larger pay gap than Black Caribbean women, Indian women or those who identify as ‘White Other’.
- Women who identify as ‘White Other’ are the only group who have seen their pay gap widen since the 1990’s from 3.5% to 14% today. This is mainly because the composition of this group has changed over time and today it is largely comprised of central and eastern European migrant women - many of whom are in low paid work.
Sam Smethers, Chief Executive of the Fawcett Society commented, “This analysis reveals a complex picture of gender pay gap inequality” and added “For these groups this is a story of low labour market participation and low pay when they are in work together with high levels of unpaid caring work.”
However, the report also reveals some women experiencing real progress. Black Caribbean women in full-time work have overtaken Black Caribbean men so that they now have a reverse pay gap of -8.8%. They also fare better than White British women when compared with White British men (a 5.5% versus 13.9% pay gap).
Gender Pay Gap by Ethnicity in Britain calls for the gender pay gap ethnicity to be routinely measured and, after calculation, the ONS should release figures on a regular basis. In addition they say, pay for the lowest paid should be increased - as many of those women experiencing the largest ethic gender pay gaps are working in some of the lowest paid jobs.
As part of their manifesto, the Labour Party is stating that they would introduce a civil enforcement system to ensure compliance with gender pay gap reporting and the Conservative Party have also pledged to introduce ethnicity pay gap reporting if they come to power in June.
Dr. Jill Miller, diversity and inclusion adviser at the CIPD, states that a Tory or Lib Dem government would inevitably consult with the HR community to ensure that race pay gap reporting proposals were “fit for purpose”. If they were not, Dr. Miller fears that “pay reporting could end up being seen as a burdensome tick box exercise that’s another cost of doing business, rather than a driver of workplace, economic and societal change”.
The CIPD - professional body for HR and people development - maintain that the General Election 2017 is an opportunity for them to underline their views on what should be addressed by the next, and future, governments. They state that the HR profession can play a significant role in debating this issue as they are experts on people, work and change. Championing good work will involve everyone making a commitment to encourage accountability, good principles and behaviour, as well as sustainable practice in the workplace.
Work plays a fundamental role in success and prosperity as individuals; in organisations and collectively as a society and as such, the wider HR profession is being encouraged to challenge their local candidates to encourage better work and working lives.
Workers' rights protections have been promised by the Tories with Theresa May assuring what she says would be the biggest expansion of workers' rights by any Conservative government, if the party retains power. The manifesto releases 11 pledges of workplace reforms - promising to solidify laws currently guaranteed by the EU, after Brexit is finalised. It is also claimed that pensions will be protected and provision made for employee rights to training.
Proposals announced by the Labour Party are also hailed, but it is thought that more clarity is required on skills policy and plans to modernise employment rights.
Ben Willmott, Head of Public Policy at the CIPD said: “The strong focus on skills and lifelong learning is welcome, given the challenges the UK’s ageing workforce faces in terms of skills and investment in training, as well as the impact of technology on jobs and the labour market. Plans to boost investment in further education and improve the quality of skills advice and guidance are also positive”. He added, “To further boost skills in the UK we would call on the next government to pilot revised Individual Learning Accounts to provide people with more opportunities to invest in their skills development. We would also urge them to reframe the Apprenticeship Levy as a more flexible Training Levy, so the funds can be used for a much wider range of training opportunities that include more people in the workforce.”
The CIPD have produced a manifesto setting out proposals which will improve corporate governance; the quality of people management; investment in and better use of skills and ultimately how a future of work can be created that will enable people to return the best value to themselves, their organisations and society as a whole.
Katerina Rudiger, CIPD Chief Community Officer, commented:
“We’re encouraging and equipping the HR community to take social action both as good citizens and on behalf of the organisations they work for. Campaigning for better work and working lives during the run up to the Election is a great way for people to share their voice on issues that are important to them and the toolkit we’ve created makes it as easy as possible to do this”.
Following an Employment Appeal Tribunal decision, an applicant with Asperger’s syndrome was found to have been unfairly disadvantaged by an online multiple-choice psychometric test and in future, persons recruiting for employees will have to – where necessary – make adjustments to the format of recruitment assessments for the disabled.
The claim was brought by an aspiring lawyer, Ms Brookes - who has Asperger’s syndrome and who applied for a job as a trainee solicitor with the government Legal Service (GLS), having successfully completed her university law degree.
To test candidates’ ability to make effective decisions, the very competitive recruitment process - with several thousand applicants a year applying for just 35 places - starts with an online situational judgment test (SJT), which uses multiple-choice questions. Because of her condition, Ms Brookes asked the GLS if she could submit her answers in a short narrative form, but she was informed that an alternative format was not available. However, GLS did inform Ms Brookes that provision could be made for an extension of time to complete the SJT. She completed the SJT in its multiple-choice format, but she only scored 12 out of 22 and the pass mark to enable her progression to the next stage of the recruitment process was 14.
Ms Brookes represented herself successfully throughout the tribunal. She brought claims against GLS for indirect disability discrimination; discrimination arising from a disability and failure to comply with the duty to make reasonable adjustments.
The employment tribunal accepted that the multiple-choice format put her at a particular disadvantage because of her condition. Ms Brookes provided the ET with extensive medical evidence that her Asperger’s meant she "lacked social imagination and so had difficulties in imaginative and counter-factual reasoning in hypothetical scenarios". This is an essential requirement for success in the multiple-choice SJT.
The employment tribunal accepted that GLS’s testing for core competencies in an efficient manner was a legitimate aim, but decided that it was not ‘a proportionate means of achieving that aim’, as there are other less discriminatory methods of testing. GLS’s actions were also found to amount to ‘discrimination arising in consequence of Ms Brookes’ disability’. By refusing to allow Ms Brookes to provide answers in an alternative format to multiple-choice selection, the employment tribunal found GLS to have failed in its duty to make ‘reasonable adjustments’.
The employment tribunal recommended that GLS issue Ms Brookes with a formal written apology and review its recruitment procedures in relation to disabled job applicants. Ms Brookes was also made a compensation award.
GLS appealed the decision, but the Employment Appeal Tribunal agreed with the employment tribunal assessment that the adjustments suggested by Ms Brookes had been reasonable, and GLS’s unwillingness to implement them amounted to a failure to comply with the duty to make reasonable adjustments.
This case shows the dangers of rigid thinking by employers when it comes to recruitment, and the importance of considering reasonable adjustments for disabled applicants. A willingness to be flexible and to consider potential alternative methods for such assessments is essential to avoiding successful claims of disability discrimination
A proposed health law sparked concerns about further Medicaid reductions, as some providers say the proposed American Health Care Act would jeopardize their ability to provide care.
Local and statewide health care groups joined their national counterparts late in slamming the U.S. House of Representatives, which voted 217-213 to narrowly pass the American Health Care Act as a replacement for the Affordable Care Act.
The American Diabetes Association states that they are deeply concerned with the AHCA.
The most alarming last minute changes to the bill will allow states to waive the requirement for essential health benefits and health status rating. Weakening these rules will give insurers the ability to charge people with pre-existing conditions - such as diabetes - higher prices. It will also allow insurers to deny people with diabetes coverage for the care and services they need to treat the disease.
Although states that waive these protections would be required to set up a risk sharing program, which could include a high-risk pool, historically high-risk pools have resulted in higher premiums plus long waiting lists and inadequate coverage.
Charlie Baker, Governor of Massachusetts, stated that it would drastically reduce federal funding to MassHealth, a program that covers 1.9 million mostly low-income people.
He added, “Massachusetts leads the nation in health care coverage and I am disappointed by today’s vote as this bill would significantly reduce critical funds for the Commonwealth’s health care system. As the U.S. Senate takes up this bill, we will continue to advocate for the Commonwealth’s priorities so that all residents have access to the health coverage they need. Maintaining flexibility through the Medicaid program is critical to the Commonwealth’s ability to provide coverage for the needy and I urge Congress to reject this bill in its current form.”
The non-partisan Congressional Budget Office (CBO) anticipates that up to 24 million people would lose their coverage should the AHCA become law. This would leave vulnerable Americans stripped of their health insurance. According to the Washington Post, it is planning to release - during the week of May 22 - an assessment of how the health-care legislation that the House just passed, will impact federal spending but it is not known whether the analysis of the Republicans’ Affordable Health Care Act will include a forecast of how the bill would affect the number of Americans with health insurance.
Every business has valuable knowledge and confidential information - for example, knowledge of clients and contracts or technology - that it considers invaluable to its success. If an employer wishes to protect the use of this information both during and after a period of employment, restrictive covenants may be included in an employee’s contract.
The standard types of covenants are where restrictions are placed on a former employee being able to work in similar employment for a competitor. This is to prevent poaching of clients or customers of the former employer, or to prevent a former employee from dealing with former clients or customers, regardless of which party approached the other. Where employee poaching is concerned, a non-poaching covenant can also be used, which prevents an employee poaching former colleagues.
Restrictive covenants can be introduced as part of specified employment contracts before commencement of work but should not be used for all staff as this would only be frowned upon if it was later taken to court.
It will be largely applicable to the more senior staff - those in contact with the sensitive information that it is necessary to protect. Having such clauses set out in the contract from the outset may help to deter employees from joining competitors and may warn off potential new employers.
However, it can also be put into operation at a later date if an employee accepts promotion, or if their duties have changed. In this case, negotiation may be required as some will not willingly agree to the restrictions being introduced and it could be crucial to be able to prove that the employee agreed to the clause.
In order for a restrictive covenant to be enforced it must be considered to be reasonable and necessary to protect the business interests. Therefore, it is important that a restrictive covenant is carefully drafted and regularly checked to ensure that it is updated if necessary.
When invoking restrictive clauses, employers should consider what they want to achieve and the commercial repercussions of taking a particular stance in relation to publicity, client relationships, management time and cost, etc. Legal action in this area can involve a substantial amount of time and money.
Recently released research has revealed that nearly a quarter (23%) of employees are concerned that at least part of their job could soon be automated, as employers flock towards the latest technology.
Analysis suggests that up to 30% of UK jobs could potentially be at risk of automation by the 2030’s - lower than the US or Germany, but higher than Japan. More than 10 million UK workers are at high risk of being replaced by robots within 15 years as the automation of routine tasks gathers pace in a new machine age. However, in many cases the nature of jobs will change rather than disappear.
Those with the highest risk are male workers and certain industries, such as transport, retail and manufacturing. Education, health and social care are not likely to be as affected, as it is difficult to automate tasks undertaken in those areas.
Jon Andrews, the head of technology and investments at PwC, said: “There’s no doubt that AI and robotics will rebalance what jobs look like in the future, and that some are more susceptible than others.”
He went on to say, “What’s important is making sure that the potential gains from automation are shared more widely across society and no one gets left behind. Responsible employers need to ensure they encourage flexibility and adaptability in their people so we are all ready for the change. In the future, knowledge will be a commodity so we need to shift our thinking on how we skill and up skill future generations. Creative and critical thinking will be highly valued, as will emotional intelligence.”
The report predicted that automation would boost productivity and create fresh job opportunities, but it also stated that action was needed to prevent the widening of inequality that would result from robots increasingly being used for low-skill tasks, such as in the construction industry.
Robots that can lay six times as many bricks a day as humans have already replaced humans on a handful of sites in America. The firm who developed the robots - called SAM (Semi-Automated Mason) plan to introduce them into the UK within the next two years.
Scott Peters, president of Construction Robotics, told The Times, “We are going to be going over to the UK in the coming months to meet with some companies and see if we can find a home for Sam there.”
According to Construction Robotics, SAM has the ability to pick up bricks, apply mortar and lay the bricks but humans will still need to set up the robot and supervise.
Australian company Fastbrick Robotics has also developed a proof of concept for a commercial bricklaying machine called Hadrian X which can, from the computer aided design of a house structure handle the automatic loading, cutting, routing and placement of all bricks to build a complete house in two days. Delivery of the first commercial prototype of Hadrian X is due later this year.
Some of Britain's biggest construction firms have warned that the automation of the industry is likely to result in mass layoffs and Alison Carnwath, chairwoman of Land Securities, stated at the Institute of Directors' annual convention, “Five years ago I'd have smiled wryly if somebody had said to me that robots would be able to put up buildings in the City of London. I tell you we're not that far off, and that has huge implications."
From time to time, employees sustain injuries - either occupational or non-occupational - which involve them having a prolonged absence from work.
Often, a number of these employees have major difficulty in recovering enough to be able to return to their former jobs within a suitable time-scale. As a result, employers must consider how to terminate the relationship without infringing federal or state law.
Most employees want to get back to work as soon as possible after an injury. No one expects to be fired from work after returning from a painful recovery. State and federal laws protect workers from unjust and illegal firings based on breach of contract, various forms of discrimination, employer retaliation and disability.
In most states, any employee is liable to be terminated at the will of the employer, provided it is not for a reason prohibited by law, public policy or a contract right. An employer cannot terminate an employee because the employee has filed a workers’ compensation claim, or has a health condition that constitutes a disability; has taken a qualified leave of absence for a serious health condition, or has rights under a labor agreement or employee handbook. Montana is the only state which requires an employer to have just cause to fire an employee, once the employee has completed a probationary period.
The U.S. District Court for the District of Kansas recently ruled that a railroad employee with carpal tunnel syndrome who re-injured his hands at work could pursue his wrongful discharge claim even though he chose not to return to work when instructed.
Millennium Rail Inc. employed Danny Smith in February 2012 as a repairman/welder to fix rail cars. According to Millennium Rail, Smith was an inefficient worker and during the twelve months from January 2013 the company wrote him up three times for being inefficient - and suspended him for three days. The next month, he took approved leave under the Family and Medical Leave Act (FMLA) to have carpal tunnel surgery and returned from this leave with the same pay, title and responsibilities as before. Soon after returning to work, he fell and re-injured his hands. Smith's workers' compensation attorney sent Millennium Rail a letter seeking coverage for surgery related to the fall. Smith's doctor sent Millennium Rail a note stating that until Smith had surgery, he would be unable to use the tools essential to performing his duties. At this time, Smith and another employee - Lee Davis - applied for a switchman position with the company. Millennium Rail selected Davis for the position and Smith was left in a job that he was not able to do.
Smith submitted FMLA paperwork to take leave to have the surgery but did not confirm that the paperwork was approved. Millennium Rail had Smith assessed by another physician, who was of the opinion that she could not detect any sign of pain or weakness in his hands and that Smith could work without any restrictions. No third assessment was undertaken.
On April 1, 2014, Smith attempted to take FMLA leave. He moved to Oklahoma to stay with his brother as he could not afford housing while not working - and his FMLA paperwork was never processed, although it was apparently discussed internally at Millennium Rail. The company's compliance and claims specialist wrote that Millennium Rail's doctor believed Smith could return to work and that the company either needed to bring him back to work or terminate him.
On April 10, Smith was sent a letter instructing him to return to work on April 16 or he would have voluntarily resigned. Smith did not receive the letter until April 15 and as he realized that he could not return to work he did not respond to the request, so therefore was deemed to have resigned. He filed claims against Millennium Rail under the Americans with Disabilities Act (ADA) and the FMLA and under Kansas law for workers' compensation retaliation and violations of OSHA and also sued his supervisor under the FMLA. Millennium Rail sought summary judgment against Smith's claims and to bar Smith from receiving damages.
The court granted summary judgment against Smith's ADA claim for failure to accommodate him by promoting him to the switchman position, finding that Millennium Rail legitimately believed Davis to be more qualified. They also dismissed Smith's OSHA retaliation claim, finding that he had not submitted an OSHA claim before his termination.
However, the court denied summary judgment as to the remaining claims. They found that Smith could establish that he was constructively discharged by Millennium Rail as Millennium Rail's requirement that he return or quit was not clearly supported by medical evidence and supported a potential claim of constructive discharge.
As some of the larger businesses begin to publish pay ratios, many executives will fail to receive a pay increase this year. A new analysis by PwC shows that the pay of senior executives is actually falling for the first time in recent history.
In one fifth of the cases reported, CEO’s decided to voluntarily waive their salary increase. However, it would appear that most companies have introduced best practice remuneration as a result of shareholder activism, rather than the decision being made by the CEO of the company.
Tom Gosling, head of PwC Reward Practice says, “There’s no doubt the new voting rules introduced last year have given shareholders more power and helped to bring stability to executive pay.”
The report goes on to state that 98% of companies have introduced ‘clawback’ which is a measure to reduce or recover bonuses and long term incentive plans in certain circumstances.
The Investment Association Executive Remuneration Working Group and the BIS Committee have both recommended significant changes to pay design, but FTSE 100 companies are showing no signs of making a fundamental change. Whilst 63% of the forty FTSE 100 companies evaluated are proposing new remuneration policies, there is very limited structural change in pay arrangements with conventional long-term incentive plans remaining the usual.
Tom Gosling states, “Pay is getting harder to earn, with almost all companies introducing the ability to claw back bonuses and many lengthening the time executives have to hold on the shares they get from long term incentives. Remuneration committees are really raising the bar for executive pay.”
There is also increased attention to fairness in pay policies, as shown by four of the forty companies covered by PwC’s report, disclosing a ‘CEO to average employee’ ratio.
This month, the Business, Energy and Industrial Strategy Committee said businesses needed to improve corporate governance and tackle excessive executive pay to restore public trust. It highlighted the damage done at Sports Direct and BHS and the extreme executive salaries paid in recent years despite no wage increase for many workers. It continued by suggesting that employees should sit on remuneration committees.
Tom Gosling - of PwC - added, “Although we don’t think pay ratios are the answer, it’s good to see companies taking steps to address the fairness question. This is an area where business will need to do more to rebuild trust with the public and we’re likely to see proposals from the government to encourage this in due course.”