The Reward & Analytics market from late 2017 until early 2018 has enjoyed a frenetic period of activity. The annual bonus and salary review cycle along with financial year end saw notable increases within the Interim Reward market, where additional analytical support was needed in volume. Regulatory specialists were also needed to support on Gender Pay reporting projects, GDPR and the never ending quest for predictive analytics. Relative market and economic uncertainty failed to really impact the volume of requirements we received and often we were able to report record vacancies per month. We have put this down to several trends that we feel added genuine stimulus to the R&A market.
Firstly, 2018 will see a number of firms face Reward specific challenges that often require additional resource. Gender Pay Reporting has been a challenging regulatory requirement for many rewards departments, not in the sense of collating the data more about how to report difficult statistics to the wider market and to come up with actual meaningful plans on how to address the gap. In addition, 2018 will see many PLC’s update their remuneration policies in line with the three year vote, and many firms will be working extensively with Remuneration Committees, Institutional Investors and the ISS to secure strong votes of confidence. These two areas have had an impact in hiring numbers and no doubt will continue to do so. The final area to note again focuses on upcoming regulatory change, mainly in the form of extended SMCR which firms are still working through and planning for.
Entry level hires (up to positions requiring 4-5 years’ experience) has been a consistently active area during the last 6 months. Interestingly, over 40% of these were investment hires for firms looking to bolster their Reward offering rather than simply replacing leavers. This has put a significant talent drain on the market, with candidate supply struggling to meet the demand and clients increasingly having to think outside the box to find the right capability. We are seeing candidates from legal, tax, and general finance backgrounds considered for Reward & Analytics hires with little or no experience but the baseline capability to “pick it up as you go”. Clients are becoming more open minded to potential both internally and externally which is welcoming some new blood to the profession. However, the reality is this still remains a very challenging area to hire for, which has inevitably seen salary rises and offers increase sharply. From our analysis over the last 12 months of candidates placed the average increase or a junior level hire is 18% on fixed pay, which is worth considering when looking to hire.
The Manager to Senior Manger market has again been incredibly active. Candidates looking for salaries of between £60-£75k per annum are literally able to choose between 4/5 options at any one time. This is leading to clients panic buying and shortening interview processes to land talent quickly, which is often backfiring as candidates are failing to really be engaged or welcomed by a firm and then struggle to buy in enough to feel comfortable accepting an offer. Whilst the volume of requirements at this level are extensive, we aren’t seeing many firms thinking creatively about the breadth and scope of a role to really sustain and develop candidates for a 3-4 year period. Often we are faced with the immediacy and urgency of the requirement, which often fails to provide us with enough context or insight to create a “career” opportunity. This is perhaps why we also see the highest turnover at this level, with candidates feeling that their skills are underused and undervalued or that they have hit a glass ceiling 18 months to two years into a position, which is arguably a failure somewhere in the hiring process. So whilst salaries continue to increase and the volume of opportunities is plentiful, we are advising candidates with caution to really think about the longevity of the potential move rather than being blinkered by a 16% salary increase.
The Senior market has also seen some good levels of activity and some fascinating and challenging briefs. All work in the past 12 months managed by our exec hiring team has been conducted on a retained basis, with clients opting for an in-depth market search for the right technical skills and culture fit and impact potential. The technical expertise of the requirements have been quite niche and focused; executive compensation, experience of carried interest or Co-investment, and workforce analytics and predictive analytics all being sought after by various clients. Salaries at this level continue to increase, with candidates in the C&I market receiving on average a 31% increase in base for a move and 24% in the Financial and Professional Services arena. The talent remains pocketed and clients are throwing counter offers on the table wherever possible. Whilst often this is not in the best interests of the candidate, the sheer percentage increases offered to stay are turning heads, with savvy HR Director’s realising the cost both financially and in time and resources it takes to hire a good Reward Director in current market.
The upcoming 12 months looks positive and, 6 weeks into the new financial year, we are again at a record number of vacancies with the Reward & Analytics team at Oakleaf (now operating with 8 fee earners). However we can’t ignore March 2019 and its potential implications. With other economic indicators remaining positive we aren’t predicting a significant slowdown, but have to be realistic that market movement may tail slightly with interim hiring increasing at the back end of the year. Reward & Analytics continues to be a high priority area for any business and no doubt this will continue over the coming years, and we are excited to see how the market develops, the new regulatory challenges that lie ahead, and the trends that start to materialise.
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