Companies move to overhaul rewards programmes to find the best talents

Financial services, like many business sectors in today’s tech-driven world, are experiencing an acceleration in the rate of digitalisation. The sector is very much at the sharp end. For banks and other financial institutions, adapting is essential for competitive survival.  Many companies are being forced to revamp their rewards strategies in order to attract the required talent and keep them.

Innovative Approaches to Rewards and Incentives Needed

More than 60 per cent of HR executives polled in recent research by Willis Towers Watson say the design of performance management, leadership development and organisational structure will require taking on an innovative “outside-the-box” approach. This will help ensure the challenges of automation and digitalisation are adequately addressed in their organisations.

For tech talent striving to innovate, genuine support from their employer can be highly rewarding. From LinkedIn’s “Incubator” to Apple’s “Blue Sky”, there is no shortage of tech companies that give staff time away to work on their own projects. The logic is that it is better to hire people with great minds, even if you only have 90 per cent of their attention. And besides, “10 per cent of time away” can convert to “110 per cent time at work”.

What really matters is having an innovation-friendly culture that gives tech talent the access to the right facilities, resources, mentors and, more importantly, the assurance that they can try new things and fail without consequences.

For employers, one consequence of today’s dynamic marketplace is that a compensation and benefits programme that would previously have remained relevant within a company for five to seven years now needs to be re-designed and refreshed much more frequently.

Companies need tech talent to help hire and retain tech talent. They need technology to help design and provide differentiated compensation, benefits and talent development projects to attract talent. This may involve more investment in tech tools, such as mobile apps, and social media to meet and engage with the specific needs of a multigenerational, dynamic, mobile using and digitally savvy workforce.

Tech Talent Prefers Next Big Thing to Life-long Career

Research shows digital talent often has little interest in a life-long career, instead preferring to focus on building the “next big thing”. It means companies need the flexibility to create competitive reward programmes at digital start-ups and consider incorporating private equity/venture capital compensation models.

Equity grants are common and often expected as a part of total compensation. New hire equity grants and top talent grants are common for tech companies. There’s a need to consider broadening equity eligibility criteria when hiring decisions are made for this type of talent. That said, granting equity at the parent company level may not be exciting enough; real or phantom equity at business unit level may be what these employees are after, especially as the direct line of sight towards wealth creation is more apparent. In designing appropriate rewards plans, it is important for financial services companies to focus on defining where performance lies and differentiating it based on the evolution of business models.

In traditional companies, managers assess performance against goals set at the beginning of the year, and the company determines pay levels based on the size of the job and market rates – with some variability based on employee performance relative to others. However, for digital companies, such people practices could be informed by every interaction an employee has with all other stakeholders directly.

As an example, imagine a star-rating – common in ride-sharing apps – in which employees get real-time ratings based on daily interactions, progress against milestones and project successes, combined with technology that can adjust for personal biases. Such systems will be able to quantify previously intangible concepts such as reputation, culture, ethics and, indeed, performance management.

Finally, freelancers – or contingent workers – are fast augmenting traditional staffing models, the way work gets done and the fundamental assumptions about well-being and total rewards. It means more tailored and personalised total rewards with increased choice for participants. To retain and engage such talent, companies need to interact with their talent, with the same deference, flexibility, and end-user centricity as they do with their customers.

Shai Ganu

Managing Director, Rewards, Asia Pacific, Willis Towers Watson