Total Reward Evolution
We discuss why attracting, engaging and retaining talent has never been so critical in an ever-changing and saturated market across industries.
Reward professionals have often been viewed as back-office staff, those who add very little value - particularly business facing value - and who are better with spread-sheets than they are with people. Since the turn of the decade, facets of the ‘Total Reward’ agenda have grown exponentially and businesses who have allocated their reward function the necessary funding have flourished, enticing gifted employees to the firm. Although too many to quantify and ultimately write about, I thought it may prove useful to highlight some of the key strategic reward trends that we have witnessed.
An important trend in the market this year has been driven by the (potentially infamous) Gender Pay Gap requirement. As of this year, firms with over 250 employees will have to publish their overall mean and median gender pay gaps from data gathered in 2017, motivating firms to consider their approach to hiring. This has resulted in organisations hiring more reward analysts to facilitate their last pay-review process before the gender pay gap data is collated. Although a fantastic first step, some firms have tried to get to the crux of the problem by engaging, hiring and training more females, particularly from the grassroots up.
Several of my largest clients have introduced recruitment requirements to ensure better gender diversity on their candidate shortlist. Additionally, some of the Big 4 have highlighted that more of their women than ever before have been promoted to Partner, whilst other large banking institutions have held campaigns to increase the quantity of women in the ExCo.
Ben Wood from the Frazer Jones Financial Services Team recently held a breakfast seminar with several Heads of HR of global asset management firms. On the agenda were numerous topics, however most discussed was the importance of the benefits offering for firms. “Gone are the days of standard benefits” was the common cry, particularly since the boom of flexible benefits, generational differences and the health and wellbeing agenda.
With our workforce evolving and being motivated by different drivers, firms have had no choice but to roll out flexible benefits as part of their reward offering. Although costly and not always well understood, flexible benefits packages have increasingly ‘sealed the deal’ for candidates when choosing between multiple firms. On the flip side, we have seen candidates this year turning down roles due to the firm not offering a flexible benefits package, even if the company was offering more in terms of fixed pay.
More organisations have hired Wellness Specialists, splitting up the traditional reward role formerly comprised of both compensation and benefits (and therefore making them notoriously difficult to find!). With over 70 million sick days per annum due to ‘poor mental health’, businesses have tried to adapt their reward offering to not only minimise this number but also encourage employees to speak out before serious problems take their toll. This has been driven by in-house benefits specialists ensuring buy-in from the firm through means such as wellness brochures, hiring specialist consultancies to hold seminars, and improving communications globally.
Technology Enhancements and Agile Working
We have seen an unprecedented growth in business transformation, most notably HRIS and technology enhancements to allow increased flexible working. With competition for talent becoming more competitive, firms have started to pump more money into their technology offering to enable the attraction of different types of candidates. With an increased number of organisations moving to cloud based systems, this has allowed those seeking greater flexibility to work from home outside core hours. Not only has this attracted new talent, but also bolstered engagement levels within the current workforce, therefore increasing motivation and productivity. Interestingly, a number of law firms have increased budgets for HRIS departments to implement streamlined systems and tools to functionalise reporting capabilities which has attracted millennials – often called the more ‘tech focussed generation’ – to buy into the culture and vision of the company.
Although all of the above has positively impacted numerous firms’ hiring trends, organisations have found it increasingly difficult to retain their talented workforce due to a number of factors including inflated wage hikes, increased competition and lack of progression for current staff. More burden has been placed on reward functions to ensure employee engagement is at an all-time high, particularly during economic, social and cultural change. I personally believe that firms will find it necessary to facilitate and encourage agile working for the majority of their desk-based staff on a regular basis in order to engage and retain those with caring responsibilities and/or those with a desire for greater work-life balance.