Changing remuneration philosophy in the face of regulatory change
Frazer Jones’ Reward team hosted its Reward Directors’ Circle on the 15th September at our London head office. Heads of Reward from businesses such as Morgan Stanley, BP, Standard Chartered and Close Brothers joined us for an insightful round table discussion.
We were delighted to welcome Laura Thanasse, MD, Reward for Barclays, as our guest speaker. Laura led a thought provoking discussion on how Barclays is revamping its remuneration philosophy following a period of considerable regulatory change.
Laura talked about how Barclays have been redefining their business model since the financial crisis, and highlighted the importance of realigning their HR and reward strategy as part of investing in transforming the business as a whole. Laura believes a refreshed remuneration policy can ‘be a mark of strategic differentiation from Barclays competitors’.
Laura shared her experiences and touched upon the common issues that are facing reward professionals in the financial services industry. The extent and pace of regulatory change in this sector is unprecedented, creating challenges that may not be felt by their counterparts in other organisations. Laura continued to focus on the importance of alignment with corporate strategy in order to best respond to these challenges.
Barclays felt they had lost touch with the wider workforce because the new legislation was actually focussed on such a relatively small number of their employees. They decided to take a step back to simplify and define their remuneration philosophy to help guide a remuneration strategy that would benefit everyone. It began with creating a simple set of guiding principles that could translate into policies and practices, which would in turn respond to their shareholders needs and act as a point of differentiation.
Laura hopes the new philosophy will reduce the turnover of top talent through rewarding sustainable performance and aligning it with risk exposure. Laura also felt it was important all employees support their values and culture by embedding it in each step of the reward and performance management process.
The topic of ‘changing remuneration philosophy in the face of regulatory change’ was extremely engaging and lead to a great discussion on how the industry can cope with the ‘tsunami of legislation’. Although challenging, everyone in attendance agreed the importance of communicating with their workforce and continually reviewing procedures will allow quick responses to change. Everyone also felt that having a clear reward framework that is aligned with corporate strategy will address the common issue of attracting and retaining key talent.
Jonathan Kitterhing, Head of Reward Practice UK said “Personally I found it refreshing to hear how Barclays are addressing the status quo with their reward philosophy to consider their methodology, rather than being so consumed with the onslaught of their annual cycle. In my opinion this has played a key role in the increasing interest from the wider market who want to work for Barclays.
Equally it was fascinating to hear how organisations of all shapes and sizes are approaching the regulatory changes that apply to their business but interesting that so many different avenues are being followed to deal with the ‘tsunami’. “