2022 Q1 Gallagher Better Works℠ Insights

Author: McLee Smith


The new world of work operates under a new set of rules. What employers offer and what employees want have changed, while the rise of remote-hybrid work is further upending conventional workplace dynamics. Yet, within the disorder of the past two years, an opportunity has surfaced to seize the moment by more fully addressing challenges to equity and inclusivity.

Competing successfully for each next generation of workers requires a stronger and steadier focus on equity. A reasonable starting point for many employers is to revisit this concept. Traditionally associated only with pay, this term has taken on an expanded meaning that also defines the organization's culture.

Pay equity is still an important standard for ensuring a fair and legal approach to compensation. Generally, it means compensating employees the same when they perform the same or similar job duties, while accounting for factors such as their experience level, job performance and tenure.1 But beyond the limits of this norm, an opportunity exists to reframe policies and practices within the construct of an equitable and inclusive organizational philosophy. Creating and sustaining a work environment based on guiding principles establishes a deliberate process for enhancing wellbeing — promoting a fairly rewarded work experience for employees and a cultural advantage for employers.

A precise understanding of current and projected workforce demographics is critical to plotting a course of action that supports employees' success in their work and personal lives. Through an analysis, employers often gain insights that inform better decisions about engagement, benefits design and retention strategies, which may also identify suboptimal policies and practices.

Future-proofing organizational and business success with the right talent and policies

Innovation moves through industries at different times and speeds. But to stay competitive, all organizations continually need to have the right people in the right roles. By reexamining the makeup of the workforce and considering how to maximize recruitment efforts, employers may discover their needs have changed. Talent that drove past success is not necessarily the same talent that can deliver this outcome in the future.

As the world has become more digitally connected, geographic proximity has lost some of its luster as a tool for securing talent. The pandemic only accelerated this evolution, straining the capacity of HR and management personnel as they try to cover more territory.

A comparative analysis of essential capabilities, both current and projected, will help define effective targeting strategies. Geographic bias against a prospective employee could cause an employer to miss out on a good — or even ideal — match for the position. Generally, evaluating candidates based on a broader profile will net better results.

Employers with a dispersed workforce are mulling whether or not to make compensation adjustments. For some, a significant number of remote employees work virtually — not just across town but in entirely different regions. Advanced planning informed by benchmarking data helps determine where to set the bar for compensation, now and over the long term.

Recent data shows that many employers have updated their approach to attraction and retention. Changes include revisiting approved geographic locations for potential hires (26%) and examining an expanded set of benchmarking data to keep compensation competitive (39%). From a cultural standpoint, there is a focus on ensuring the engagement strategy is inclusive and helps all employees connect with the organization (46%). More than three in five employers (63%) are also laying the foundation for successful decisions by taking steps to better understand workforce needs.

Updates to attraction and retention: 63% = better understand workforce needs 46% = engagement strategy;  39% = benchmarking data; 26% = revisit approved geographic locations for candidates.

Engaging employees by promoting their health and career wellbeing

Understanding workforce engagement motivators is one of the first steps toward developing an equitable wellbeing strategy and providing programs that serve diverse needs and lifestyles. The more closely they align with employee health risks and wellbeing goals, the better they support physical and emotional health. However, when budgets alone influence decisions, desired outcomes may not be met. Finding true alignment with workforce priorities will improve program inclusivity and likely have a positive effect on health.

In response to the pandemic, employers offer a variety of healthcare options such as additional virtual services (35%) and expanded access to mental and emotional health services (27%). Reminders about the importance of routine preventive care (30%) is another way they boost utilization, helping to prevent or minimize the possibility of greater costs later on.2

In tandem with efforts to maximize physical and emotional wellbeing, access to individual training and support for career growth remain central to any equity discussion. Yet the competencies that will equip leaders to help a first-generation remote workforce achieve defined goals are in their infancy. Many employers also need to retool current approaches to training, development, mentorship and opportunity equity. To succeed, programs must fit new work norms.

Concerns among remote workers about how they stack up against onsite colleagues in the eyes of their managers are fairly new, but women and minorities have long faced barriers to equal footing in the workplace. Employers need to ensure that none of their practices overlooks or underserves any group, including the traditionally marginalized. By onboarding diversity and helping all employees connect to the values and mission of the organization, they stand to gain a critical competitive advantage.

Creating an opportune future through people-first policies and practices

Volatile labor markets raise the importance of work environments as an attraction and retention factor. With more workers now onsite, at least on some days, employers are rethinking how to use the workspace in a way that preserves and promotes culture. It's a misconception that bricks and mortar are a diminished asset  —  remaking this central hub of interaction and social connection can pay dividends.

While the blueprint for change should feature an open environment, an inviting and comfortable space will also meet diverse as well as common needs, including privacy. Surveying employees about their workplace preferences is one way to show the organization values inclusivity  —  and to make better decisions overall. Employees who sense they're in sync with the culture and feel they belong to their work community will be more engaged, productive and loyal.

It may be uncomfortable for organizations to step back and examine where they stand on pay or broader equity values, but there has never been a better time to evolve. Waiting too long to adapt to transformational change carries the risk of being left behind  —  and rushing to catch up.

Proof of corporate citizenship demonstrated by an active commitment to pay equity and inclusion practices can be a competitive game changer for attracting talent. And leaders who invest in innovative equity strategies position themselves more strongly to realize current and long-term business goals.

The metamorphosis of the next-generation workforce, well on its way, will leave much of the past behind. Strategic people-first policies and practices are laying a firmer foundation for effective talent management, enabling more fluid ways of working and a more cohesive workplace culture. Already, equity is evolving to become an operating principle  —  not just for determining pay but for defining a more inclusive employee experience.


Author Information


1SHRM, "The Importance of Pay Equity," February 2020

2Gallagher, "Workforce Trends Pulse Survey 2021 Q4 Infographic," 2022 Q1 Gallagher Better WorksSM Insights Report: Data and Insights to Build a Stronger Organization,January 2022


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