I had the pleasure of interviewing my client, Frank-Jan de Leeuw, Global Head Performance & Reward for ING, on his journey within HR & reward. Frank-Jan has been working at ING for many years and has had an interesting career, one that I was keen to interview him on and share. I hope you enjoy reading it!
1) What advice would you give to people who are aiming to get to your level of seniority?
Make sure you are passionate about what you are doing, because without passion you will not be able to develop a vision. You need a vision if you want to be able to attract, motivate and retain top talent in your team and lead them to a point-on-the-horizon. Moreover, make sure you stay on top of your profession and that does not just mean the technical side, but make sure you are well plugged into the business and willing and able to understand the (financial) dynamics in the organisation and the world around you.
2) Why did you choose to specialise in reward and what do you like about it?
I started my career as an assistant to a CHRO, a role that is now known as business manager. In this role I gradually gained exposure to international mobility and the international reward, tax and social security aspects of it. This gradually evolved into designing local incentive plans for specific overseas offices and groups of employees. Working in financial services for so long means that you simply have to be very knowledgeable about reward in order to build up credibility within the business. This is true in the many generalist HR roles I have also had over the years. Having alternated between generalist and specialist roles has been very instrumental in getting me to where I am.
3) What was a career defining moment for you?
I would have to say that this is the period I worked in London in the mid-to-late-nineties, firstly to help set up a small investment bank from scratch for ING, my then employer, and secondly as part of the acquisition team, as HR Director for ING Barings, the combined Corporate and Investment Banking business that was created after ING’s acquisition of the bankrupt Barings business. This comprised of more than 10.000 employees in more than 40 countries. The sheer number of issues I was then confronted with in the aftermath of the acquisition has greatly accelerated my personal and professional development and allowed me to get involved in activities that an HR Director would not typically get involved in.
4) What is the ‘one’ tip you would give to reward specialists?
Make sure the CFO or the Head of Finance is your best friend because if you understand how the finances work of the organisation you support, you will gain tremendous credibility in the eyes of business leaders and senior managers. Remember, total cost of employment constitutes typically between 60-70% of the total cost of an organisation and therefor any changes to reward design will have a significant impact on the P&L and the success of the organisation. Position yourself way above the market and the P&L will suffer. Position yourself too low and you may struggle to attract and retain talent.
5) Have there been any big changes in reward since you started?
Within financial services, the major changes have to do with the regulations that have been introduced in response to the financial crisis some 10 years ago. Over the years both national and European regulation and legislation has been put into place that has a direct impact on how much we can pay and how pay needs to be structured. Strict governance and more direct oversight by Non-Executive Directors are also part of that. It has meant that HR, and in particular the Reward function, has had to step up to the plate and become more of a “Control Function”, adopting a more independent mindset whilst becoming constructive challengers to the business. At the same time, all listed companies, both financial and non-financial have been subject to a whole range of Corporate Governance Codes in different countries, which prescribe, mostly on a ‘comply or explain’ basis, the rules on remuneration and governance they need to abide by. Finally, I would like to add as a major change the increased transparency in executive pay, the increased rights of shareholders and works councils in this area and also the more intense public and political scrutiny of executive pay.
6) Are there any big trends you are noticing now?
Big trends now are around personalising the reward offering to meet individual needs. The old fashioned ‘one-size-fits-all’ approach no longer works in today’s gig-economy. Interestingly, we are now seeing for the first time ever four different generations in the workforce and each of these have different needs and wants. It is down to employers to gauge what these are and how best to serve them. Another new trend is the increased focus non-financial recognition to complement the traditional financial instruments managers have always had available. Actually, research shows that the power of non-financial recognition should not be underestimated and can, in many instances, outweigh the importance of financial recognition. Lastly, the emergence of People Analytics is helping organisations to underpin their reward designs and decisions with robust data and analysis in an effort to optimise the outcome of the total reward spend.
7) What are your predictions in the reward landscape?
I think reward decisions are one of the areas where more prominence can be given to automation, artificial intelligence and machine learning. If I imagine the future, I see a future where on Monday 18 January 2021 a manager logs onto their device and sees a message saying “your pre-allocated fixed and variable remuneration pool is ready for your management discretion, please submit by the close of business on Friday”. This would reduce the Annual Compensation Review from a complex, arduous 5-month long process to a simple and easy, 5-day process that will help to deliver a differentiating manager and employee experience. In order for this to work, the HRIS in the background needs to have complete and accurate people data, performance data and market data (both absolute and relative) for all employees within the team, including an understanding of the size of the fixed and variable pool available, based on past and forecasted business performance. A cleverly designed algorithm can pre-allocate 80% of that pool looking at all these components, thereby eliminating any gender or other bias, whilst still allowing 20% management discretion so that the end decision is always a management decision and not a machine decision.
If you would like to share your reward story, it would be great to hear from you, please do get in touch.