Hiring Reward professionals in the current market, particularly at a senior level, in many ways is similar to watching a Tarantino film; it’s a long drawn out process, involving complex characters, there’s always a twist near the end, and it usually gets bloody! It’s never straight forward and unfortunately I have witnessed client led processes come crashing down in a heap, which in turn has prompted me to put together this latest article to perhaps help clients avoid unnecessary pain.
To put this all into context, over the last 12 months whilst conducting some analysis from our own records, we noted that the average time taken to recruit a Reward hire at a salary of £80,000 - £100,000 was 3.6 months from engagement to offer. From salaries of £100,000 and upwards the average time increases to 5.2 months from engagement to offer. One could argue that this is due to perhaps these positions operating at the more senior end of the market, but actually when looking at salary ranges from £40,000 - £60,000 the average time to hire still sits at 3.1 months, which is quite alarming. These lengthy timescales show that not only is this market talent short, but also that the amount of time clients invest in hiring Reward professionals needs to be used wisely to ensure the right result. Imagine the monetary cost involved in 6 months spent trying to hire a senior Reward professional, only to have the offer turned down or countered at the last minute? You may have had to bring in expensive interim options to hold the fort, you may have to engage an external consulting firm at vast expense, your Reward offering in that time period may be out of date and you may have lost some key staff; the potential consequences here are numerous. Therefore, the key message here is that you don’t want to get the hiring process for Reward professionals wrong and if at all possible, you want to avoid the Tarantino bloodbath at the end!
The key factors to consider are as follows:
Too often when discussing a Reward brief with clients do I hear the phrases, “We need someone to plug the gap”, or “We are really up against it and need someone to get us out of a bind”. Reward hiring often seems to begin with a sense of desperation, which is never an ideal place to start. Having a clear sense of purpose goes beyond identifying what expertise you need as a client and it’s important to think about why this opportunity will appeal to candidates. What are Reward professionals looking for and what ingredients does the role need to contain that will invoke a sense challenge?
Commonly we hear, particularly at the senior end that Reward professionals want exposure to RemCo, an international remit, executive compensation, regulations and governance work, wellness, mindfulness, Reward analytics etc. I appreciate that if some of these elements aren’t applicable to your Reward role then you can’t simply add them in, but any of these areas of responsibility need to be highlighted and drawn out to help a candidate see the breadth of the role. Additionally, it’s not just about owning the above, it’s about having a clear understanding of what the current state of play is and where you envisage it needs to be. No one wants to inherit someone else’s comfortable slippers, and therefore having these elements on their own are not enough. As a client you need to think about what needs to be done better and where there is room for improvement rather than just what each day will hold. Creating a vision and demonstrating that there is both the willingness and the budget to make it happen, will engage prospective Reward professionals and they will view your opportunity as a “challenge”.
I appreciate this is quite a controversial comment and indeed this is not to suggest that HR Director’s don’t appreciate the idiosyncrasies around Reward. However, often hiring a senior Reward professional isn’t viewed with a sense of optimism and an opportunity for the organisation. Unfortunately these hires are often surrounded by negativity. I imagine similar technical disciplines like Compliance and Risk, where talent again is at a premium, also struggle with this perceived negativity surrounding the hiring. There always seems to be a lot of long sighs and down trodden looks when sitting down with a HR Director to discuss replacing the Head of Reward. Let’s get realistic this is simply a recruitment issue, it’s not like the HR Director has been asked to solve the Da’Vinci code! This often becomes apparent at interview, where candidates are left feeling that although there is certainly a good challenge to the role, they didn’t feel that passion and engagement about the Reward agenda to really feel welcomed into the business. We talk often about the “employment deal” and considering a candidate’s needs regarding their total package, however part of this is feeling valued for your role and expertise in the company. It’s well documented that there is a degree of perceived mysticism around Reward across the HR profession, which in many cases is unfair. However this does sometimes come out at interview as a lack of interest in the topic. Imagine you worked for a leading TV broadcaster and you interviewed a prospective candidate who told you that they had little or no interest in TV and rarely watched it; it wouldn’t inspire you to hire that candidate would it? Well this can often be the case when hiring a Reward professional - you don’t need to be a Reward expert to discuss Reward with passion or appreciate its intrinsic link to the future of your staff engagement.
This is a constant debate we have with clients; do you hire individuals that tick every technical box to safeguard yourself, or do you hire someone with high potential who culturally fits the business? Do you hire someone who could do 70% of the role and who would pick up the rest quickly, enjoy the development and the challenge presented and in return deliver 4-5 years of service prior to taking the next step? Or do you hire someone more senior who ticks all the boxes, takes the roll as a sideways move for an uptick in salary, keeps things tight and delivers 2 years prior to moving on for career advancement? Longevity and return on investment must be at the forefront of any clients mind when looking at prospective candidates, however with the Reward market becoming increasingly talent short people often loose perspective and panic buy. I would always advise to hire potential talent but appreciate that there is a risk associated with this and in the current economic climate; risk is not an option to be taken likely. However, should you choose to hire individuals that tick all the boxes, it is worth really thinking about how you are going to manage their career in the future. Thinking about where the Reward function will be in two or three years is important as things will no doubt change and will the Head of Reward role still require someone to operate at the same level you hired them? Arguably over that period the problems should be fixed, the mess cleared up and the function move towards a BAU scenario if possible; therefore what are you going to do with your Head of Reward after this? Discussing the future of the role beyond Reward is a pertinent conversation to have as this shows that as the client you are hiring for the long term.
This is a conversation we have had hundreds of times in the last three years with clients. The market rate for Reward professionals has climbed steadily since 2012 at all levels and is well documented. We have provided benchmarking information in the form of salary surveys and detailed analysis across all sectors to clients but this is a topic that constantly rears its ugly head. The issue is mainly around internal HR parity and the conflict this can, and often has caused by bringing in a Reward professional whose salary eclipses the business partners who often hold more experience. Perhaps this is yet another signal of the shifting sands within the HR department and Reward potentially moving into a hybrid position between finance and HR? In reality, it is a situation that is not easy to rectify as from a business perspective, why should Reward be paid more than the rest of the HR specialisms? I could argue the case for it but perhaps that’s for another article! Ultimately market rate is dictated by the availability of candidates and the skills in demand; there are less Reward Managers than there are HR Business Partners, hence the increased price tag. As mentioned, we discuss this frequently with clients at the outset of the hiring process but it is always a challenge. My advice to clients would be remain realistic about the salary level and remove any personal thoughts on your perceived value of a candidate; focus more about what they bring to your business in technical skills, then look at the price tag after.
There are several other factors I would urge clients to always consider but ultimately these four points are what a successful process hinges on. Other important elements include having a robust and clear interview process, being realistic about the yearly Reward budget and how much the Big Four now charge, to look at commerciality as well as technical skills at interview and finally, accept the fact that as an HR Director the Head of Reward can be your most valuable asset and trusted ally not your competition. All in all hiring Reward professionals does not necessarily need to be a horrendously daunting and challenging task, as long as organisations are clear from the outset about what their offering to the Reward market actually is.